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One of my friends (in addition to many others) had been trying to convince me for years to just open a credit card, so I could establish credit. The whole idea of establishing credit had no appeal to me. I own a house and have several cars (all older preowned, but I love them), to me it seemed there was just no point to it.
More recently my friend and I were discussing net worth and budget apps like Mint. My friend also hadn't believed me when I told her I had no credit score. I went online to Credit Karma and checked "my score" as usual it just said "file to thin to establish score", she was in shock. She had been of the mind set you get some credit by just being alive an paying bills. That is not how it works. Utility companies only report if you don't pay and go into collections, I use a pre pay cell phone, and the only other non utility bills are my internet which is in my boyfriends name (he also had no credit and has had this bill in his name for probably a decade), and car insurance.
During this discussion my friend brought up rewards and points that you can earn from credit cards. While mildly intrigued by the thought of free money I mostly blew off her suggestion and also figured I wouldn't be able to get approved any card that had rewards. Fast forward maybe a month later. I went into the bank to deposit a check, something I rarely do, I usually just deposit it at the ATM, but there was a long line so I just decided to go in.
I'm at the counter and get my check deposited. The clerk proceeds to tell me that I am pre-approved for a Chase credit card. I'm in shock and quite baffled. I ask if any of them happen to be rewards cards and she says they have several. I decide to sit down with someone and fill out the application. It came back immediately and I was approved. I assumed it would be for some small amount like $500 or something, nope I was approved for $1,700. I found this quite interesting because I had tried to apply for PayPal credit quite some time ago because there was some special promotion which would have made my purchase nearly free, but I wasn't approved, and the item I was buying was under $100.
Now a bit of back story on my banking history. I have had an account with chase for probably close to 10 years now. I have also maintained very stable balances in my checkings and savings for most of that time. I had nearly $35,000 or better prior to purchasing my house for $28,5000 in 2013, and never let my savings drop below $5000 after that purchase I have since built my savings back up to around $25,000. I also usually maintain between $1200-$2000 in my checking account.
Given my balance history I would have to assume this is part of why I was approved. I'm guessing the amount I was approved for might be based off of my typical checking account balance. I tried to search for information about this type of situation but couldn't find anything in regards to better odds of opening a credit card with the bank you use.
The card I got approved for was the Chase Freedom Unlimited. The Freedom Unlimited card gives 1.5% cash back on all purchases. In addition to the 1.5% cash back, after you spend $500 in the first 3 months you get $150. You can also earn $50 for referring friends if they are approved, right now they are doing a special and it's raised to $100. Chase also offers the Chase Freedom card, which I wasn't offered at the time, but found out about later. However, after doing some research the Freedom Unlimited is the better option for me. The Chase Freedom offers the same introductory offers, but 1% cash back with 5% cash back in revolving categories up to $1500. If you don't spend the full $1500 in the bonus category you will earn more through the Freedom Unlimited with the constant 1.5%.
Now the first thing I did when I got my credit card other than register it so I could use it, was set up auto pay to pay the full amount each month. I have been using the card for all my regular purchases to maximize cash back. Now when I log into my Chase account I see what I owe on my Freedom Unlimited card, when I see the balance I tend to not like seeing that I own on anything so I usually pay off my balance any time I login so probably once a week or so.
I've only had my Chase Unlimited Freedom card for about a month now and I have already went from no credit whatsoever to 684 which I believe is about average. If you are like me and have never had any credit but have a decent banking history with you bank you might want to try to apply for a card with your bank if you are interested in either establishing credit, or just getting cash back or points.
Now I think my interest rate is on the higher side, but I have no plans to actually accrue interest on what I spend on the card. I am only using the card to get the rewards so I 'm only using it for my regular spending and only buying things I can afford. The interest aspect of credit had always confused me because I think for a long time I didn't understand that if you pay it off every month you aren't paying any extra on fees or interest.
Also if you want to earn cash back or other free money, but don't want to deal with the credit card route, there are tons of apps and websites out there that you can also earn money and points from. Most of these work just by taking photos of your receipts. Here's a list of what I use.
Yaarlo $5 free when you use my referral link
Ibotta- rebate app
MobiSave- rebate app
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