How to Manage Multiple Credit Cards for Millennials

Todd Baldwin has enough credit card airline miles to travel from Seattle to Europe for free. The 28-year-old millennial millionaire likes to open new credit cards, especially with sign-up bonuses, airline miles and cash back.

But Baldwin, who estimates today that he opens about two new cards per year, did not start as a credit card adapter. Growing up, Baldwin was raised by a mother who did many things to feed the three children. Seeing this, he was inspired to realize that he never had to worry about money.

Baldwin told CNBC Select, “That way I had a fire under me because I knew I didn’t want conflict when I was growing up.”

In his younger years, Baldwin associated credit cards with debt. But he quickly learned how useful he could be after receiving his first credit card (a secured card) during his Somporum year at Western Washington University.

Photo courtesy of Todd Baldwin

His number-one piece of credit history for young adults is to begin construction as soon as possible. This will come in handy when you want to apply for a loan or mortgage in the future.

“I didn’t know credit cards had a good side until I started doing more research,” Baldwin says. When you charge expenses on your credit card, pay them in full by the due date. This way you avoid any interest charges while working to improve your credit score.

While promising himself that he could never pay more, Baldwin created a set of guidelines for using his credit card for everyday shopping, travel, and more. Here he manages his 15 credit cards.

He keeps only 1 credit card in his wallet at a time

Baldwin may have 15 credit cards to his name, but he keeps only one in his wallet and the rest in a vault at home.

He said the card in his wallet is usually a flat-rate cash-back card that pays between 1.5% and 2% on every purchase. He recommends such reward credit cards, or comes with an interest-free period, such as a 0% APR credit card.

For those looking for both, Zero interest on Citi® Double Cash Card Balance Transfer for the first 18 months (13.99% to 23.99% onwards; N / A on purchase), plus 2% Cash Back: Provided at 1% Does. All eligible purchases and an additional 1% after paying your credit card bill.

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  • Award

    2% Cash Back: 1% on all purchases and an additional 1% after paying your credit card bill

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  • Regular apr

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  • There is no welcome bonus, so you cannot maximize the rewards during the first few months of opening the card.
  • $ 25 minimum cash-back redemption
  • 3% is charged on purchases made outside the US
  • Estimated award earned after 1 year: $ 437
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He doesn’t close the credit card

Even though Baldwin stores most of his credit cards in a safe place, he never closes any of them – especially his oldest.

Closing a credit card can cause a temporary drop in your credit score as you lose the available credit limit on that account and your overall credit usage rate increases. Since a good, or low, usage rate leads to a low credit card balance and a high credit limit, a closed credit card increases your usage and your score is affected.

Instead, keep your credit card open and active. Allowing them to become inactive may prompt the issuer that you are no longer using the card and they may close the account on you. To ensure that you are using your credit card regularly, even if they are stored in a secure location, they have a small recurring cost, such as a monthly subscription or streaming service, that you can use for each month. Automate payment

He automates his credit card bill payments

Baldwin knows that paying on time is the most important factor to get a good credit score, so he makes sure that he always pays his credit card bill by the due date.

To ensure this, Baldwin automates his monthly payments so that the money is out of his bank account at the same time every month, and he doesn’t have to think twice about remembering to do it himself.

In fact, when it comes to paying bills, such as utilities on six rental properties, Baldwin can put multiple bills on one credit card and then automate that credit card payment every month to help his credit score Does. For those interested in the Citi® Double Cash Card mentioned above, following Baldwin’s guideline will also mean that you put money in your pocket when you pay your credit card bill.

He never kept a balance on his credit card

It is a common myth to have a balance on your credit card to boost your credit score. When you have a revolving balance on your credit card every month, you deposit a daily interest fee and eat your available credit.

To prevent ever paying interest, Baldwin pays off any of his credit card balances each month.

He avoids credit cards with an annual fee.

Although some of the best credit cards come with an annual fee, Baldwin has only one that he pays the annual fee for.

Their advice is to avoid the card with the card’s annual fee until you pay the card with the card’s benefit. For example, Baldwin uses his only annual fee card, the airline credit card, to book travel because it comes with a partner that closes the cost of the annual fee.

To help decide if the new card is worth its cost, calculate the amount you will have to spend annually on the card to break even on the annual fee.

learn more: Best no annual fee credit card of september 2020

He does not go out of his way to earn a welcome bonus

“It’s important to never go out of your way to spend $ 1,000 to earn $ 300 because then you lose $ 700,” Baldwin says.

Although Baldwin prefers to take advantage of the generous sign-up bonus offers of credit cards, they do not spend money otherwise they would not do just to get points, miles, or cash back. Instead, he waits until he needs to do any kind of shopping before signing up for a credit card to get his welcome letter. Knowing that he has upcoming expenses, whether he is submitting one of his rental properties to list on AirBnB or repairing his car, he will be able to get the new card bonus in this way Is more likely to work with its budget.

He checks his credit score every two months

Because Baldwin pays his bills on time and doesn’t spend more than he pays on his credit card, he doesn’t worry about where his credit score is. However, he checks his score for free every two months, especially before he applies for a mortgage on a new real estate investment.

In fact, when Baldwin is in the process of being approved to buy real estate, he will avoid applying for a new credit card altogether. He knows that when the card issuer pulls out his credit report, his strict check immediately ends his score temporarily and he wants the best possible score to show when the borrower checks his credit .

To check their credit score, Baldwin uses the Credit Karma app, but there are plenty of resources available for consumers to access their credit score.

You do not have to be a Capital One cardholder to use a Credit CardWise® from Capital One, which provides your VantageScore to one of the three main credit bureaus from TransUnion.

Credit Wise® from Capital One

Credit Wise® from Capital One

Information about Credit Wise has been collected independently by CNBC and has not been reviewed or provided by the company prior to publication.

  • Cost

  • Credit bureau monitor

  • Credit scoring model used

  • Dark web scan

  • Identity insurance

Editorial note: Opinions, analyzes, reviews or recommendations expressed in this article are those of the CNBC Select Editorial Staff alone, and have not been reviewed, endorsed or otherwise endorsed by any third party.