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MBA Credit Cards (to use while in Business School)

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MBA Credit Cards (to use while in Business School) [#permalink] New post 12 Jun 2009, 22:37
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This post on "How to Save Money in Business School" got me thinking about Credit Cards that would be helpful while in business school. Please beware that only financially responsible individuals should apply for Credit and it can be very easy to overextend yourself. At the same time, if you are disciplined financially, credit card points and reward could be very beneficial to saving money while in business school. Allow me to share some of my favorites with a few descriptions and don't be shy to share yours:

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1. Discover for Students (Gas Card)
No Annual fee
5% cash back on Gas Purchases up to $100/month at ANY gas station that takes credit cards - all except Arco.
I have this card and keep it in the car. Only use it for Gas. It used to have better benefits but still OK. I get $5-6 every month by spending $100-150 on gas. However, you can also double/increase cashback amount by choosing non-cash redemption options such as $20 AMC pack which includes 2 movie tickets, 2 pop corn and soda coupons or a $40 rental coupon for National, Budget, or Enterprise for $20 - other rewards available but these are my favorite.






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2. Starwood Amex - 10K sign up bonus and up to 15K bonus if you spend $15K in 6 months
First year - no annual fee; $45 thereafter
Earn SPG points redeemable for nights at Starwood Hotels (Sheraton, 4Points, W, Westin, Le Meridien, Luxury Collection)
If you need to travel/stay in hotels - this is a great option. Allows to redeem points or use cash&points awards that are substantially cheaper than rack rates. Another benefit is ability to transfer SPG points into airline miles on 1:1 ration with almost all airline programs. Allows to top off accounts as needed. I have this card but the part I don't like is the $45 annual fee after the first year - it is not worth it.


More to come...



My overall collection (some still have activation stickers). There is a duplicate card here which I did not catch - discover. Also there are a few ATM cards here - not all are credit
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 23:56
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Paradosso wrote:
Anyone can recommend a good card that gives lots of frequent flyer miles (Us Airways preferred)?


This is a very tough call.

Since you will be in PHL, the hub of US Airways, it makes sense to get their Credit Card. (Will give you priority boarding and priority checkin). most other benefits will probably be useless (such as companion ticket or qualifying miles). However, they have been voted to be the worst of the legacy US carriers and that should not be taken lightly - charge for soft drinks, no in-flight entertainment on US flights, fees for pretty much everything, etc.

Here are the US Airways credit card options: http://www.usairways.com/awa/content/di ... fault.aspx. You can apply for both the Personal and business card and get 50-60K miles, which could be enough for 2 momestic roundtrips or 1 international trip. Actually, one good thing about them is that partner awards are easier than with United (if you wanted to fly Lufthansa or Singapore air for example using US Airways miles). this is definitely worth the $79 annual fee per card (personal and business).

If you do have a choice, I would advise against US Airways as a program to deposit your miles - may sound not practical if you are located in PHL, I would argue for a different program instead - such as United for example or BMI if you are UK/Europe based (not sure if you can apply for the BMI Amex from Milan or how usable it is in the US with forex fees).

Just my thoughts.
I do travel a lot, however, and have status with multiple airlines - 1K with United and Gold with BMI (British Midland)
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 12:45
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Deposit-Secured credit is a GREAT way to start.

It works like this: you give the credit union (I'm a CU girl at heart, but most financial institutions do this), say $1000. Then, they stick that $1000 in a CD for you - a CD you can't access. They then give you a loan for $1000 with a regular payment schedule. Now, you make your regular payments. If you ever stop making payments, the credit union can transfer your CD to pay off the loan.

You can even do this without having $1000 to start with - they "lend" you the $1000 and then put THAT in the CD.

My credit union would charge 2% more on the loan than you would make on the CD, so it was a very cheap way to establish credit. If the CD was earning 3%, then you'd pay 5% on the loan. It's especially nice since you paid 5% on a diminishing balance and earned 3% on a growing balance.

They can do essentially the same thing with credit cards, though you might have to put in $1500 on a $1000 limit, and probably the rate margin wouldn't be as small. This is because it's easier to cause losses for the credit union if you rack up over-the-limit and late payment fees.

And btw - it might not be an SSN you want or can even qualify for. It's been a while, so I'm fuzzy on the rules - but it's probably an ITIN (inidividual taxpayer identification number). These are for non-residents/citizens/green card holders who want bank accounts or need to file taxes.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 24 Jun 2009, 12:11
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There is a very easy way to get an American Express as an international, assuming you already have one in your home country.


By using the Amex Global Transfer service you can use your prior payment and credit history with any Amex card you had anywhere in the world.
http://www.americanexpress.com/globaltr ... r_en.shtml



This is how I received a 10K Credit limit with NO credit history in the US.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 29 Jun 2009, 08:41
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This global transfer service is even better than I thought.

After receiving my SSN (just a few weeks ago) I called the AMEX customer service and asked them to report to my credit report using my newly received SSN. It turns out that they reported the long history of payments to my AMEX.

Look at your "member since" year on your AMEX card - they report all your payments from that year. I now have 700+ score and a good credit history in the US, who would have thougut.

There are a lot of bad things to say about AMEX, but this has totally surprised me.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 13 Jun 2009, 09:27
I used to have a lot but the once a year activity fee's got the best of me, and I didn't like having so many different online accounts.

I would say the AmEx Blue card is a good one.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 13 Jun 2009, 14:52
89nk wrote:
I used to have a lot but the once a year activity fee's got the best of me, and I didn't like having so many different online accounts.

I would say the AmEx Blue card is a good one.


I second the Blue Cash rec (I do not have any vested interest in you getting an AmEx card btw). You get 5% back on 'necessities' like Gas and Grocery once you hit the $6500 mark for the year. The only downside is the $2000 credit limit, which means I still have to carry a 2nd card for making major purchases.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 05:58
I am a huge fan of cash back cards.

For example: Chase Freedom Card
https://applynow.chase.com/FlexAppWeb/renderApp.do?SPID=CJB3&CELL=6H90&MSC=LSABCFREEDOMC&AFFID=9C.eSeL3cao-ByEjzrPdgXYmcJ2JPXGQ0w
$50 Cash Back after your first purchase!
Always earn a full 1% Cash Back on Every Purchase. Everywhere. From the First Dollar you Spend. There are no spending tiers or earning caps.
It’s Easy to Earn More Cash Back: Up to an additional 10% Cash Back and even as much as 20% at select merchants when you shop online through Chase.
Plus 3% cash back in rotating categories like gas, home improvement and department stores.
0% Interest for 12 months
No annual fee

Citi has a similar program too. I know a few 2nd year friends who got these recently because of the 12 month interest free thing. Since they don't get sign on bonuses until they start, and dont have any income these days and no student loans coming in.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 15:11
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Right on!

I have a Chase Freedom Plus and was going to recommend that one but it has been discontinued and no longer available, only the regular Freedom :cry:
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 17:53
I like the new Citi Forward (http://www.citiforward.com) and applied for one today to add a Visa card to my wallet. I already have a Citi Dividend MasterCard (1% cashback on everything, 2% on groceries and drugstores) and an American Express Blue Sky card (1 point for each 1$, 7,500 points give you 100$ credit on any travel purchases) I use for buying virtually everything, and yes I ALWAYS pay my bill in full so I couldn't be buggered about APR and late fees and everything.

The new Citi Forward nets you 5 points for every 1$ spent on restaurants, books, movies and music. 100 points every month for paying your bill on time. 2500 points will get you a $25 credit on your student loan account, or spend those points on other more frivolous "gifts" if you wish. "Double dip" on restaurant spending by signing up for UPromise (www.upromise.com) and get even more credits towards student loan balances!

Could be useful for an MBA student, ne c'est pas?

As far as freezing your credit cards goes, great if that works for you, but just bear in mind a credit card offers more protection than a debit card when disputing fraudulent purchases. And it's obviously safer to carry around than wads of cash.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 18:05
I have a cashback citi mastercard and an AmEx Blue card. My AmEx gives me triple points on money spent on hotels, restaurants, rental cars, airline tickets so was my card of choice when I was living my consulting-esque life.

I also have a clothing store card since they offered a fantastic discount and coupon booklet with it. And I shop there a lot. :P

These are all fee-free and have relatively low APR rates. (A friend of mine had a medical emergency and couldn't pay his bill on time, so got stuck with excessively high charges. I'm usually on time with credit card payments but after that experience, thought it was better to have a lower rate!)
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 23:11
Anyone can recommend a good card that gives lots of frequent flyer miles (Us Airways preferred)?
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 02:41
Hey, this may be a bit off topic, but can internationals apply for a credit card in the U.S.? I intend to spend some time post MBA and want to start building up my credit score if possible.

Anyone with relevant experiene, please do share!
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 05:14
bb,

many thanks for the relevant, detailed and prompt answer. It really is appreciated (as well as your having founded the GMATClub!).

Since you are into the travel industry, I will expand on my needs.

1) I am an international (Italian). I assume I can apply to US credit cards as long as I have a US checking account. I will apply for it once I am in Philly (already booked my first roundtrip with BA).

2) US Airways is the only airline that flies directly from Milan (from where I hail) to Philadelphia. I will fly most times with my girlfriend, who got a Visa and will be staying in Philly with me. However, other airlines, most notably SwissAir, Lufthansa and BA, offer convenient 1-stop options (London or Zurich).

3) I don't mind stopping, any charges for drinks etc. or no entertainment (I usually read books or sleep). I am very price conscious as I will take 6-10 international flights a year.


Given the details above, my guess is that my best option is the US Airways card, that gives companion tickets/60K miles/direct flights to Milan/priority check-in. However, if you tell me there are better cards associated e.g. with Lufthansa / BA / Swiss -usable miles/benefits, I will opt for these instead (I too hear US Airways is crap plus I am likely to use extra miles with European airlines).

Also, I assume all airline cards convert my spending into miles (which is what I want).

Thanks again!


bb wrote:
Paradosso wrote:
Anyone can recommend a good card that gives lots of frequent flyer miles (Us Airways preferred)?


This is a very tough call.

Since you will be in PHL, the hub of US Airways, it makes sense to get their Credit Card. (Will give you priority boarding and priority checkin). most other benefits will probably be useless (such as companion ticket or qualifying miles). However, they have been voted to be the worst of the legacy US carriers and that should not be taken lightly - charge for soft drinks, no in-flight entertainment on US flights, fees for pretty much everything, etc.

Here are the US Airways credit card options: http://www.usairways.com/awa/content/di ... fault.aspx. You can apply for both the Personal and business card and get 50-60K miles, which could be enough for 2 momestic roundtrips or 1 international trip. Actually, one good thing about them is that partner awards are easier than with United (if you wanted to fly Lufthansa or Singapore air for example using US Airways miles). this is definitely worth the $79 annual fee per card (personal and business).

If you do have a choice, I would advise against US Airways as a program to deposit your miles - may sound not practical if you are located in PHL, I would argue for a different program instead - such as United for example or BMI if you are UK/Europe based (not sure if you can apply for the BMI Amex from Milan or how usable it is in the US with forex fees).

Just my thoughts.
I do travel a lot, however, and have status with multiple airlines - 1K with United and Gold with BMI (British Midland)
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 05:49
Paradosso, I believe airmiles earned on any Star Alliance airline can be redeemed on US Airways. So in theory you could get yourself a Lufthansa or Swiss or Singapore Airlines card and earn their miles, but redeem them on the US Airways flight to Milan.

Also, unless I'm mistaken I don't think having a checking account in the US will necessarily lead to you getting approved for a credit card. Or did you mean debit card?
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 06:41
solaris1 wrote:
Paradosso, I believe airmiles earned on any Star Alliance airline can be redeemed on US Airways. So in theory you could get yourself a Lufthansa or Swiss or Singapore Airlines card and earn their miles, but redeem them on the US Airways flight to Milan.

Also, unless I'm mistaken I don't think having a checking account in the US will necessarily lead to you getting approved for a credit card. Or did you mean debit card?


Yeah, from what I remember from my undergrad days, getting a credit card as an international is a bit of a hassle if not impossible. Having a checking account in the US will not necessarily lead to approval of a credit card (in most cases, it doesnt or thats my understanding). I never tried to get one since I had a family credit card issued in my country, but didnt notice any of my international friends getting one in the States. It's a "credit card", meaning you are borrowing based on your credit, and to have it, I believe you need to have established your credit score one way or another in the States.

If you had an active Social Security Number, the story might be different, but it is difficult to get one these days unless you intern or work in the country. I somehow got one during my college days, but since I have no record, it often works to my disadvantage (they always ask me why there is no record - looks a bit suspicsious at first).

Even getting a contracted cell phone&service is a hassle for us. Normally, we need to pay $500-ish deposit to just get one (unless you use prepaid, which really really sucks).

So, the best option, probably, is to get a US Airways credit card in your home country. I do it with United, and they give me 15 miles for every $10 I spend.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 09:20
That really sucks for internationals!

I have personal and corporate credit cards in my country, but aren't you losing a ton on commissions on exchange rates? When I spend with AmEx in the USA, I am being hit hard.

Can one reap the miles/benefits with a debit card? Canone get a card that does not carry a balance (i.e. always pays the month balance in full?)?

Many thank guys!
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 10:09
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Paradosso wrote:
That really sucks for internationals!

I have personal and corporate credit cards in my country, but aren't you losing a ton on commissions on exchange rates? When I spend with AmEx in the USA, I am being hit hard.

Can one reap the miles/benefits with a debit card? Canone get a card that does not carry a balance (i.e. always pays the month balance in full?)?

Many thank guys!


You don't want to use an international card in the US - forex fees will add up quick.

I saw Milan on your profile but was not sure if you had Credit History in the US.
If you don't have a Social Security Number - you won't be able to get a Credit Card or a Checking account to start with. A few years ago DHS was very militant about giving students an SSN but after a bunch of them could not get Driver's Licenses, Bank Accounts, or other things, I think they relaxed it, so the first thing you will need to do when you get into the US is get the SSN - your school can help.

Then you should open a checking account. Your credit history will be Zero, so you won't get approved for anything except a secured credit card and that's probably a way to start.

There is a checking account from Bank of America that earns US Airwasy miles - http://www.bankofamerica.com/deposits/c ... ards_usair but it is 1 mile per $2 spent.

I'd say - don't worry about the Checking account earning miles - just focus on getting your credit history established in the US.
If you can get an auto-loan (or any loan), even with exuberant rate of 20% - it may be worth to keep it on the books for a few months as that will boost your credit history tremendously.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 11:16
bb,

thanks again for your input. I agree with the point of the abroad-issued cards: definitely don't want to use that in the US. I also am focused on building a credit history and earning miles via credit card --not checking account.

I should add that I am getting a checking account at Digital Federal Credit Union (I will take their no-cosigner loan for Wharton), so that may be something to start with.

Two more questions:

1) What exactly is a secured credit card? Can I get one with a SSN (given to me by the school) and the DFCU checking account?

2) Do you think I could get a secured US Airways Visa, or any other method to get miles?

Manu thanks, and any other current student input is appreciated as well.


bb wrote:
You don't want to use an international card in the US - forex fees will add up quick.

I saw Milan on your profile but was not sure if you had Credit History in the US.
If you don't have a Social Security Number - you won't be able to get a Credit Card or a Checking account to start with. A few years ago DHS was very militant about giving students an SSN but after a bunch of them could not get Driver's Licenses, Bank Accounts, or other things, I think they relaxed it, so the first thing you will need to do when you get into the US is get the SSN - your school can help.

Then you should open a checking account. Your credit history will be Zero, so you won't get approved for anything except a secured credit card and that's probably a way to start.

There is a checking account from Bank of America that earns US Airwasy miles - http://www.bankofamerica.com/deposits/c ... ards_usair but it is 1 mile per $2 spent.

I'd say - don't worry about the Checking account earning miles - just focus on getting your credit history established in the US.
If you can get an auto-loan (or any loan), even with exuberant rate of 20% - it may be worth to keep it on the books for a few months as that will boost your credit history tremendously.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 14:09
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aaudetat wrote:
And btw - it might not be an SSN you want or can even qualify for. It's been a while, so I'm fuzzy on the rules - but it's probably an ITIN (inidividual taxpayer identification number). These are for non-residents/citizens/green card holders who want bank accounts or need to file taxes.


I am rusty on this as it's been quite a while. i was lucky to get my SSN through a work&travel program a long time before I came to the US to get my MBA.
Checked with a friend of mine: You are correct, now all international students are getting ITIN's. You can use those numbers to build your credit history.

However, there is a loophole (still I believe) to get a SSN if you want to (not sure why really but if you do want to) and that is to apply for a job on campus - then you have a valid reason for SSN - at least that was true 2 years ago when my friend was going through all this fun stuff. Now this conversation took a very different turn.
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Re: MBA Credit Cards (to use while in Business School)   [#permalink] 16 Jun 2009, 14:09
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