How to open a credit card

They say there are two kinds of people: those who pay interest and those who earn interest…. and there are those who know to open a credit card and those who don’t.

The above was just a general reminder not to forget as one thinks about opening a new line of credit. Below I will lay out the steps I follow when I open a new credit card.

By the way, I was going to title this “How I open a credit card” since the this is just how I do it but I thought “How TO open…” would be more SEO friendly and attact more traffic…

How to open a credit card

1. Think about what is the objective
   Idieally the objective is not to use the credit. Ideally one would open a credit card to get something “extra” from it. This extra is usually a bonus offer for opening the account…:
   -airline miles
   -cash
   -a long period of 0% interest (running a big balance will hurt your credit score a little bit, even if it is free…)
   In my case, it is mostly airline miles, preferably American or United miles.
   If you don’t have any option like this it would be probably best to stop here and not even go to step 2.
2. Go to www.annualcreditreport.com and get a copy of your credit report from one of the three big reporting “agencies” (companies?). Make sure everything looks OK (no bankrupcies -haha- etc).
3. Go online (I’ve always opened my cards online, I suppose one could call a number but that sounds complicated) and fill out the application. This includes all the obvious information, the only thing to point out here is that adding the frequent flyer number as early as possible makes things a lot easier. If not possible here then do it while setting up the account online
4. Fill out a spreadsheet with all relevant data (some can be added right away and some will have to wait to have the information):
   -network (Visa, Mastercard, etc)
   -bank
   -brand name (the fancy card name)
   -last 4 digits of the card
   -whether is personal or business
   -cardholder’s name (if one is tracking a spouses’s accounts or other family member’s)
   -authorized user(s)
   -limit
   -date opened
   -bonus (how many miles or how much cash)
   -minimum spending required to get the bonus (such as $500)
   -time allowed to make such spending (3 months)
   -annual fee (and fee after the first year if different)
   Here is a link to a draft of this list in a Google Sheet
5. Setup online access (user ID, password, etc)
   Many cards allow you to setup access even before you receive the physical card. Ideally you could also get the card number but this is not common. If you get the card number you can start using it online to get a head start on that required minimum spending
6. Setup autopay
   Ideally, to pay the whole statement amout monthly. If one is getting a nice 0% interest offer, then the minimum required amount.
   I’ve had some trouble trying to do this before getting the first statement, for some reason some credit card companies want to make things complicated. This can cause you to forget (so setup a reminder somewhere)
7. Go paperless
   Save the planet!
   There is really no point in receiving anything on paper anymore. Actually things that I want to keep and receive on paper I scan and upload to my Google Drive.
8. Add authorized users (optional)
   Sometimes you can do this during the initial application. Remember that if this is a personal card adding someone as a user will cause a bit of a hit in their own credit report…
9. Setup a reminder in Google Calendar (or your personal choice) for the date when you run out of time to complete the required spending
10. Setup a reminder in Google Calendar (or your personal choice) for the date when the card renews, in a year. This is so you can decide whether you want to keep the card before they charge you for the renewal
11. Activate the card
    This you can only do when you receive the physical card and you will need the three-digit number on the back of the card to do it, usually either online or calling a specific number.
    
    This may not always be the right order, or rather the possible order one does things but this is the most typical. As a rule of thumb, as I said earlier, do things the first time you are presented with the opportunity (i.e. if you can add an authorized user while applying then do it; same for the frequent flyer number).

I think that’s all. What did I forget?

This is the first time I write about credit cards, I will write more soon. Here.

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