Last year, the Fed released a report (then analyzed by the New York Times) that said for Americans under the age of 35, their credit card debt had fallen to its lowest level since 1989. Continuing:
Some older Americans have also been shedding credit card debt since the financial crisis that began in 2008. But for no other age group has the decline in the proportion holding credit card debt been more rapid than it has been for young Americans — who are often referred to as millennials — the data from the Survey of Consumer Finances shows.
This doesn’t mean that millennials are shying away from credit cards necessarily, rather they have much less credit card debt, but the two are sort of connected.
To me, credit cards are a great tool and everyone (everyone!) should have one, as long as you follow the two golden rules:
- Don’t buy things you don’t need just because you can
- Always pay your statement balance EVERY MONTH — don’t ever pay interest
If you’ve never had a credit card, signing up for one (and all the power that comes with it) can be daunting. And choosing one? Even more daunting, as there are hundreds of options out there. When people ask me “what credit card should I get if I’m just starting out,” I will almost always recommend the Chase Freedom, and here’s why:
Reason 1: No annual fee and a good sign-up bonus
People are often wary of cards that charge them for the “privilege” of using them, and I totally get that! With the Chase Freedom, you’ll never pay an annual fee. To me, your first credit card should always be fee-free.
You’ll also get a great “welcome perk” when you sign up: spend $500 in three months, and Chase will give you 15,000 Ultimate Rewards points. Those points are worth $150 in cash back!
Reason 2: One dollar doesn’t always mean one point
Lots of cards offer a very simple earning structure: one point for every dollar you spend. The Chase Freedom does that for most purchases, but every quarter, some purchases are earn you FIVE point per dollar. Here’s the 2017 calendar:
Every quarter, you can earn up to 7,500 “extra” points by maxing out the rotating category. Living in NYC, spending $1,500 in groceries over three months ($125 a week) is not unheard of!
The best part about Chase Ultimate Rewards points? They never expire!
Reason 3: Cash back or travel? You decide!
When you earn points, you can use them as a statement credit against your bill, use them to buy gift cards, or even use them for travel!
Points are worth one cent each, so in the screenshot above, I have $225.46 to use in any of the above mentioned areas. The possibilities are endless!
For me, this is a great card for those who have never had a credit card before, or are looking to dip their toes in the “miles and points” game. It has no annual fee, the sign up bonus is great, and points can be used for a myriad of experiences. Just remember the two golden rules of credit card ownership, and you’ll be on your way in no time!
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