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What if you don’t have any credit cards?
Today’s post is in response to an Email I received today from a reader located in Colombia. It’s a great question and I thought I would actually answer the email as a post because I think it could be valuable to a lot of people. I will disclose that I’m not an expert on Colombian credit cards or even the ways that Colombian banks issue cards so I will answer the email as best I can and relate it to the USA. The title of the email is “What if you don’t have any credit cards?”
Here is the body of the email
Hey you! I’m from Colombia and I’m very interested in learning how to travel cheaper. I really haven’t started reading your tips properly but for what I’ve seen credit cards are a big part of it. I don’t have any. I don’t like to be in debt so I got used to just spend what I own (I’m good at saving money). Anyway, when I have to buy tickets I just look for someone with a credit card to do the purchase for me and I pay them right away. Is there a way to get the most of it giving my situation?
3 things I love about your email
- Love that you’re looking for ways to travel cheaper
- You’re right, a lot of my tips relate in some way to credit cards
- Love that you are financially responsible and don’t want to go in debt
But I want to say: Credit Cards aren’t bad, but how you use them could be.
If you have a penchant to spend more than you make, then perhaps this isn’t the right sort of thing for you. However, if you’re responsible like this reader…there isn’t a reason not to get a credit card.
Credit cards are a big way to earn miles, but they don’t mean you have to go into debt. In fact, you shouldn’t ever carry a balance.
Just because a bank will give you a large credit line doesn’t mean you should go out and use it. In fact, you should only spend what you can afford to pay off every single month. A credit card should merely be a different instrument to pay your bills with, not an excuse to live beyond your means. When you do this, you won’t be paying any fees and wouldn’t be in debt to anyone. You could be using your every day purchases to earn points to send you on your next trip!
Here in the States your credit score is actually shaped by several factors, and your length of credit history counts for 15% of your score. As you can see in the chart below
The longer you’ve shown yourself a reliable person, the higher your score will be.
At some point you will want to buy a house, lease a car, buy a car, etc, etc. You will need to have a credit history to get the best rates, and credit cards are the perfect way to do this.
My advice to my reader and anyone who asks me, “What do I do if I don’t have any credit cards?” Get one!
Don’t go crazy, but get a card that earns you flexible points and will create a relationship with a bank that has other great products. This way, if you start feeling more comfortable and haven’t built up any debt, you will be in a good position to get another credit card with that bank that offers attractive benefits. It will also position you well when it comes time to take a loan out for something in the future. If you have a proven track record with that bank, it can help you get approved down the road.
The three cards I would recommend:
- American Express Everyday/Everyday Preferred
- Chase Sapphire Preferred
- Citi Thank You Premier
Any of those three cards will give you access to the 3 best transferrable point programs out there.
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Chase Sapphire Preferred® Card
Welcome Offer
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Annual Fee
$95
Points Earned
Transferrable Chase Ultimate Rewards
- 5x on all travel purchased through Chase Travel℠
- 3x on dining, including eligible delivery services for takeout & dining out
- 3x on select streaming services
- 3x on online grocery purchases
- (excluding Target, Walmart and wholesale clubs)
- $50 Annual Chase Travel Hotel Credit via Chase Travel℠
- The begins immediately for new cardmembers and after your account anniversary for existing cardmembers
- 2x on all other travel
- 10% Anniversary Bonus
- Every year you keep the card, your total spend will yield a 10% points bonus. If you spend $10k in a year, you’ll get 1k bonus points
- Chase Sapphire Preferred continues to redeem at 1.25c in the Chase Travel℠ and the slew of other benefits remain in tact including Auto Rental Collision Damage Waiver ( primary ), purchase protections, etc.
- Points are transferrable to 14 Ultimate Rewards partners
- Redeem in Chase Travel℠ for 1.25 cents per point
- No foreign transaction fees
- Suite of Travel and Purchase Coverage
- Auto Rental Collision Damage Waiver is my favorite
- Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027.
- $95 Annual Fee
We keep an up to date spreadsheet that lists the best ever offers: You can find that spreadsheet here.
Historically 80k is a very, very good offer and hit in both 2022 and 2023. In 2021, we saw the offer hit an all time high of 100k. Who knows if that will ever come back.
Main Cast:
Cards that earn flexible points and should be used on the bulk of your purchases.
Supporting Cast:
Cards that earn fixed points in the currency of the airline/hotel and can not be transferred at attractive rates. These cards yield benefits that make it worth keeping, but not necessarily worth putting a lot of your everyday spend on.
The Chase Sapphire Preferred® is exceptional starter card and offers transferrable Ultimate Rewards, and pairs well with other Chase cards.
If you carry this card alongside Chase’s cashback cards like the Chase Freedom Flex® and Chase Freedom Unlimited® or the business versions: Ink Business Cash® , Ink Business Unlimited® you can combine the points into Preferred account and transfer into hotel and airline partners
Annual fee is quite low at $95 a year + you get a 10% anniversary bonus on points + $50 hotel credit in Chase travel.
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