So as I have said in an earlier post, I've been looking around to get my first credit card.

First off, I had no knowledge of how credit cards work besides knowing that swiping it is similar to borrowing money, instantly, and that I had to pay it back with interest. They seemed confusing to me and so I was sort of determined to never deal with credit cards. All these perplex terms, numbers, percentages, and offers have definitely drove me away from understanding them.

Now, I see that credit cards are not as frightening. They can be very beneficial to boosting my credit score and some provide specific discounts and offers that can also help save money. Before jumping to the process of filling out credit card applications, here are the steps I took to choosing the right card for me:

  1. Learn the terms and the numbers. I've spent some time researching the terms online at the Federal Trade Commision, CreditCards.com, and Bankrate.com. Those are some of the best places to find information about credit cards. After looking through the sites, I had a much more educated know-how of the credit card industry. It felt great to be able to be able to understand the Terms and Conditions of my credit card offers. I try to pick up the tricks the issuers use to lure in customers - it helps to find right card for me.
  2. Check my credit report. I visited AnnualCreditReport.com and requested my free credit report from only one of the three major credit agencies, I'll save the other two for the rest of the year. This procedure is a checkup of my credibility and to make sure that I was not already a victim of identity fraud. Seeing that my credit report claims that I am clean besides my subsidized loans for school, I'm cleared to continue.
  3. Do a self-evaluation of my financial habits. I am not an impulsive spender. Besides shopping for groceries once a week, rarely do I shop for other things. Since I look at my financial situation pretty much everyday, I would always be aware of my balances and know to pay it off.
  4. Know what I am looking for in a credit card. Based on the self-evaluation, I know that the standard APR on purchases would have very little effect on me since I'll most likely pay the balance quickly. I'm looking to SAVE money so I definitely would hunt for a rewards or rebates card. Here is criteria that I decided to choose a card from:
    • A rewards/rebates card (preferably a Cash Rebate card)
    • No annual fee
    • Identity theft protection
    • $0 liability on unauthorized purchases
    • Online account management
    • A photo card
  5. Find the right card. Looking at the offers I get in the mail, none fulfill the offers I want so I once again turned to CreditCards.com. From there, I reduced the favorable card issuers down to Capital One® and Citi®. Then, one specific card caught my eye - the Citi® Dividend Platinum Select® Card for College Students. It completely meets all my requirements.
Result: I applied for the perfect card for me: Citi® Dividend Platinum Select® Card for College Students. I've read many satisfying reviews of the protection that Citi® and this student card also comes with educational information and tips that I'm sure will be useful for a rookie like me. This is a great start to improving my credit.

Maybe, after I feel that I've become acquainted with the system and have increased my credit limit, I'll start to look into making money by borrowing and putting the money into my high-yield savings account as the author of My Money Blog had successfully done. Here is his guide for How To Make Money From 0% APR Balance Transfers.


fitcat said... @ January 8, 2008 at 9:57 PM

I just read your comment on the Get Rich Slowly competition about saving shower water in buckets and using them for the toilet and garden. That's actually a really common practice where I live (Brisbane, Australia) as we are in the middle of a prolonged drought and the target is for every person to use 140L per day or less (about 37 gallons per day I believe??). So for us it's not cheap but an everyday part of life!

I thought you might just find that an interesting tidbit :)

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