Credit From Cred-ible to Cred-it: Getting the Credentials to Own a Credit Card

Growing up, I have always been aware of the benefits that getting a credit card and building credit can have. Building credit allows you to make larger purchases later in your life. When I was 18, I decided to set out and get a credit card and start building credit for myself. I scheduled an appointment with my bank, Wells Fargo, so I could start this financial journey.

Wells Fargo went through the specifics of applying for a credit card and building credit with me, but the difficulty with getting a credit card is that you typically need to have credit to apply for one. Wells Fargo assured me this paradox wouldn’t be an issue because there are several credit cards that don’t require you to have credit to apply. An assistant at Wells Fargo showed me my options and the differences between the types of cards I was offered. There were two that caught my eye and I went online and started applying for them. I was denied for my first option; however, my second option accepted me. I was now the proud owner of a Discover credit card. Now I had to decide how to use it so I could build credit.

There are two strategies of managing credit I had heard of: using a credit card for a specific use or for a reoccurring membership fee. The first option seemed to be the most popular - only use your credit card whenever you are buying groceries or gas (for example). The point of this method is to use your credit often, but not on items that are particularly pricey. For example, I would spend my money on a gas station snack once a week. That said, my bank informed me that this method can lead to issues since groceries and gas are varied expenses. They presented the method of using the credit card on a membership fee that I use. This allows for the payments to be the same every month and I just have to make sure I have the money to pay it off. They explained the fee didn’t even have to be a lot, just enough to show that I can pay off debt.

I started off hoping to use the membership fee method, but I didn’t have any memberships to use my credit card on. Any membership I had access to was part of a family plan paid off by my father. As a result, I decided to find my own membership to pay for. Duolingo Plus was my choice of membership because it was decently cheap and for educational purposes. As I was trying to pay for the membership on my phone, I realized my phone was under my dad’s card, so I was unable to pay for it myself without getting off of the family plan and losing benefits. I ended up giving up on using the membership fee method and didn’t use my card for months on end.

Months later, I realized I needed to build my credit any way I could. I started buying items here and there with my credit card rather than my debit card and would pay it off immediately after purchasing the item. I was slowly building credit in a way that fit me best. I learned that credit-building methods suit people differently. There is no “one size fits all” method.  To limit my credit card usage, I only buy things if I really need or want them and if I have the money for them in my savings account. I don’t spend money if I don’t have it.

As of now, I have two credit cards that my name is tied to. One is for my everyday purchases and I am an authorized user of one of my grandma’s account just in case I need to purchase anything well above my credit limit. In the near future, I want to understand the benefits of having multiple credit cards and see if that a something I want to have. If any other inquires come up about credit, or my finance, I will ask my coworkers here at Financial Wellness because they are well trained to answer questions on finance. If you have questions about anything related to finance, I advise coming to Financial Wellness to discuss them or going to the bank you bank at.