Hey everybody welcome back to whiteboard Finance my name is Marco and I'm here to Help you master your money and build Your wealth thanks to Kudos for Sponsoring today's video but more on That later in today's video I'm going to Teach you how to pick the best credit Card for you and your situation based on Your needs there are a few people that Say credit cards are the devil and that You should stay away from them Completely but for anyone with common Sense and financial self-discipline Credit cards can be an excellent way to Build your credit score and also get Some rewards back for spending money on Things you're going to buy anyway stay Tuned okay step one is to check your Credit score and understand where you Are from a credit worthiness standpoint Some credit cards will simply decline You because of this so it's important to Understand where you're at before you Even begin the credit application Process this step isn't 100 necessary But it's important to understand your Credit score regardless of whether You're applying for a credit card or not Most of the best credit cards require a Somewhat decent credit history but there Are also cards created specifically for People with not so great credit or with A limited credit history if you're in College or if you're young for example
The reason it doesn't make sense to just Apply for a million credit cards and see Which ones accept you or reject you is Because every time you apply for a line Of credit this is what's considered a Hard pull okay and this goes on your Credit score or your credit report these Hard pools can actually hurt your credit Score and some of them stay on your Credit report for up to two years when I Used to sell cars I would see this every So often from people getting their Credit pulled multiple times from Multiple dealerships because they were Shopping for the best rate for multiple Different cars if you keep doing this There's a chance that this could hurt Your chances in getting approved for Cards or any type of loan in the near Future so there are a few different ways To check your credit score but the Easiest one that I found is just to Actually use your current savings Account or bank if they offer it I use Capital One 360 and I'm literally one Mouse click away from being told my Credit score at the time of this Recording you can see that I'm a 800 and 21 credit score this specific service May not be one of the three major credit Major credit bureaus such as Experian Equifax or TransUnion but this at least Gives you an idea of where you're at in General this doesn't have to be NASA
Precise it can just be a ballpark score Okay so if you don't have this feature In your bank account you can easily go To Experian Equifax or Transunion and Get your credit report directly from Them once you've done this let's move on To step two and figure out what you want Out of a credit card or what you want a Credit card to do for you okay step Number two is to understand what you Need or why you're even getting a credit Card in the first place are you trying To build your credit score are you Trying to earn rewards typically credit Cards fall into a few specific Categories there are secured and Unsecured credit cards and there's Different types of each so a secured Credit card is just like a typical Credit card except that you need to put Down a security deposit in order to Become a card holder this is typically An amount of money equal to your credit Limit so if your credit limit is two Thousand dollars these issuers will Typically have you put down two thousand Dollars in cash up front once you become Eligible to upgrade to an unsecured card Your two thousand dollar or security Deposit will be given back to you by the Card issuer the second type of card is What we all think of when we think of a Credit card is called an unsecured Credit card this is literally a loan or
Credit without having to put money down Or up front it's a loan however these Need to be paid off with a within a Certain time usually one month or they Will start to accrue interest which is The bank's way of charging you for Borrowing their money there are a few Different types of unsecured credit Cards so let's talk about those you may Have credit cards that improve your Credit score you have credit cards that Could save you money on interest and Most commonly you have cards that help You earn rewards for using them if You're trying to pay off a debt you Typically want to look at a balanced Transfer credit card this allows you to Take your existing balance months from One credit card or debt and transfer it To a new card which may be a Significantly lower interest rate or Usually zero percent introductory rate So this will allow you to take a balance That is costing you money every month in Interest because you're not able to pay It off in full and you're able to Transfer that to a card the balance Transfer card that isn't charging you Any or significantly lower interest this Typically lasts a few months then they Begin to start charging you interest Just like any other credit card the Entire point of signing up for a balance Transfer card is to pay off the amount
That you owe before the interest kicks In now if you are someone who doesn't Carry a balance and pays off their Credit cards in full no matter what then You would most likely fall into the Category of someone who is ready to earn Points miles or cash back on their Purchases this is where you want to look Into a rewards credit card these are Typically the cards that are pickier When it comes to credit scores and they Typically look for people with good to Excellent credit if you're someone who Carries a balance or is irresponsible With credit cards I would not recommend You go this route because then you're Just going to keep buying stuff thinking That you're beating the system when in Fact you're just spending more money Than you need to if we break down the Rewards cards there are typically three Categories for for rewards cards we have Cash back cards that will pay you back a Percentage of your spending that you can Then redeem for a cash amount in the Future so for example for every dollar That you spend you may get a few Percentage back in terms of cash so These are typically good for purchases That you know you're always going to Make such as gas bills or recurring Expenses that are outside of your Ordinary spending the second category Are earnings cards that accumulate
Points instead of dollars these are Similar to chips at a casino in my Opinion uh points are just another way Of representing dollars without actually Using dollar bills if that analogy makes Sense to you you can typically redeem These points for cash back which we just Talked about or you can redeem them for Travel which there's usually a discount Associated with that at if you book Through the credit card itself that's What I do with my Chase Sapphire Reserve Card and then there's also gift cards And physical items such as merchandise As well and then finally for the third Category in rewards cards we have miles Earning cards which are similar to my Poker chip analogy these miles are just A made-up metric or marketing uh I don't Want to say scheme but marketing term They're tied to a certain amount of Money you get off for specific flights With a specific brand so for example my Close friend hasn't paid for United Flight in years and he usually ends up Flying business class just using his Airline miles or points so when it's all Said and done all of these rewards are Just simply a percentage of every dollar You spend with some categories rewarding You more at the end of the day do the Math figure out how much you're going to Spend per year with a credit card with All your recurring bills and gas and
Things like that and you'll get an idea Of how many rewards you'll end up with Coming your way there are so many more Benefits to using credit cards such as Travel protection car insurance and a Plethora of other things which is what Today's sponsor Kudos will help you Realize unlock without any additional Effort let's talk about that Kudos is a Smart wallet browser extension that Works on both Chrome desktop and Safari Mobile it helps the average users save Over 750 dollars per year by picking the Card that maximizes credit card rewards And hidden card benefits like purchase Protection and travel insurance at Checkout users just need to pick the Cards they have from the 3 000 cards That Kudos supports no card numbers are Required getting started is simple just Click on the link in the description Below and add the Kudos Chrome or Safari Extension to your device you then choose What credit cards you have pin kudos to Your browser extensions and start Maximizing your credit card benefits and Rewards for users who also choose to Store their card numbers with Kudos Kudos also streamlines the purchasing Experience with a secure and seamless Autofill experience that works on over 1 Million sites on desktop and mobile Devices Kudos uses the the same bank Level 256-bit encryption used by all
Major Banks Kudos has also a card Explorer tool that lets you discover new Cards that fill gaps in your wallet Based on how you spend Kudos is Currently us only and is giving a 10 Amazon gift card towards Black Friday Weekend shopping for us users all you Have to do is sign up before December 5th using my link in the description Below enter the code Marco underscore BF During onboarding and make your first Autofill purchase using Kudos a 10 Amazon gift card will be delivered to The email address you signed up with Within 72 hours of your first autofill Purchase using Kudos use kudos to start Earning and saving more with your credit Card today step 3 is knowing what Criteria to look for and what questions To ask outside of just the interest rate Rewards things like that here are some Important questions that I would ask Before I signed up for any credit card If you're new to credit cards you should Be asking if this card will help build Your credit I know that sounds sounds Crazy but make sure that they actually Report your credit payments to the three Major credit bureaus so that you are Getting credit Pun intended for all of your disciplined And diligent payments the next important Question that goes overlooked a lot of The times is what is the annual fee of
This credit card some credit cards cost Nothing every year to open and maintain Other cards such as certain American Express credit cards cost roughly 695 Dollars a year just to keep open at this Point you need to do some simple math That we talked about earlier and figure Out if the rewards outweigh the fees if You're looking at a balanced transfer Card with zero percent introductory Rates or any introductory rate you need To understand how long is that zero Percent rate good for for example so What does the rate become after the Introductory rate what is the card's Balance transfer policy and find out What types of debt you can or can't Transfer when you're opening up one of These cards because you may realize After the fact that you weren't able to Even transfer a certain type of debt to This card so if you're looking at Rewards cards you need to understand What categories you spend the most Amount of money with because certain Cards may be more advantageous towards Spending on gas compared to spending on Restaurants for example so I would also Be asking what types of introductory Bonuses a lot of these cards have with My Chase Sapphire Reserve I get a ton of Money back after I spend a certain Amount of money within the first three Months or so I knew that I was already
Going to spend this amount of money so For me it was a no-brainer and it was Literally free money so these are the Types of questions you should be asking Before you apply for and start using a Credit card for the long term and step Number four isn't really about the Credit card itself but it's just about Understanding what you're getting Yourself into you need to know thyself AKA know yourself you need to understand How much it's going to cost you an Interest if you don't pay off a balance In full again this is what whiteboard Finance is all about we need to Understand the numbers behind our Decisions not just pressing the apply Now button and mindlessly so how much Are late fees going to cost how much are Foreign transaction fees going to cost What is a cash advance fee going to cost You if you use your credit card to take Money out of an ATM for example only you Can understand yourself the best in Answering these questions honestly so You don't end up getting in trouble I Honestly wouldn't recommend using more Than one credit card unless you Absolutely have to finance should be Simple and in order for things to be Simple less is more if you only have one Credit card to focus on you're going to Be more likely to track it and pay it Off in full without incurring interests
I'm 34 years old and I have never paid One penny in interest In credit card debt in my entire life And I've been using them since College If you know you're someone who can't Handle a credit card or who just clicks The Buy It Now button and swipes Aimlessly at the store with no budget or Plan a credit card isn't for you however If you're someone who knows yourself Well and knows you can handle a credit Card it is a double-edged sword it to Help you just as much as it can hurt you My wife and I have a lot of rewards that Come from credit card points every year But this is because we tie our bills gas And other regular expenses to our credit Cards I rarely use cash because I have a Good understanding of how much I spend Versus how much I make every month again You need to know thyself okay so if you Listen to people I have a video about This I made it like two or three years Ago about why Dave Ramsey is wrong about Credit cards because he thinks everyone Is an irresponsible child right they Don't know what to do you're going to Spend more studies show this this and This yes that is true if you're Undisciplined if you are disciplined a Credit card is just an extension of your Cash okay if you pay them off every week If you pay them off every month if you Don't pay any interest on them you're
Only getting money back for the Purchases you already make now if you Are spending more because of the credit Card then that's on you okay so again There's always a balance this channel is Always about the golden middle don't go Crazy with them don't not use them just Use them it's just a tool in your Toolbox so as always I hope you got Value out of this video if so please hit The like button subscribe share the Video with your friends and family on Social media I would greatly appreciate It thank you so much and have a Prosperous day hey not ending this video On a funny note I just forgot to ask This in the video itself who are you Supporting in the World Cup uh let me Know down in the comments below thank You and good luck to all the teams Playing Foreign
