Entry-Level AmEx

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SushiRoll
 
Posts: 1
Joined: Fri Feb 13, 2015 2:16 am
Location: San Francisco, CA

Entry-Level AmEx

Postby SushiRoll » Fri Feb 13, 2015 2:35 am

Hi all! I'm new here \o/
I am very well aware that AmEx doesn't have any "entry-level" cards or student cards for that matter but I want to join the AmEx family.
Within the last 4 years (I'm 22), I accumulated 7 credit cards (bad, I know). However, given that most were incredibly low and embarrassing credit lines, I paid off 3 of the 7 cards and closed them. I'm now left with 4: Nordstrom credit, Capital One Journey, Chase Freedom and Chase Slate.

Chase gave me the option to consolidate my two cards, either keep the Freedom (high interest rate of 21.9% -_-) or keep the Slate (low interest of 11.9%, but no rewards program). So I'm still debating between my two options or if I should just keep both and pray for higher CL? Not sure yet.

Anyway, I spoke with an AmEx representative who, after listening to how I planned to use my future AmEx, suggested I try the Everyday Preferred AmEx card and wanted to sign me right up. Now, while I was thankful for his enthusiasm and all, I wasn't about to let him pull a hard inquiry while payments were still going through and my cancelled credit cards have not yet processed into my scores. Now my question, is the Everyday Preferred card really a good option as a starter card with AmEx?

I'm currently a university student with an income of $40k and have $10k in student loans

Cards are as follows:
Nordstrom Credit: $2k
Capital One Journey: $1.5k
Chase Freedom: $800
Chase Slate: $600

Is it really my best option? My credit score last pulled up at 650 (when I applied for a Discover card last year, cancelled it quickly thereafter). Not sure if it was Experian or TU though :(
Current Utilization Rate is at 70% but I'm going to get it down to appx. 40% before I apply.
Average age of credit lines: 2 yrs, 2 months
I have no car loans (parents took care of that)
Or mortgage (leasing university housing)

Also, how much will the credit lines closed affect me (they were relatively new, 6 months or so)


takeshi
Centurion Member
Centurion Member
 
Posts: 1733
Joined: Wed Jun 05, 2013 3:12 pm
Location: US

Postby takeshi » Fri Feb 13, 2015 10:17 am

SushiRoll wrote:I am very well aware that AmEx doesn't have any "entry-level" cards or student cards for that matter but I want to join the AmEx family.

Why? There are certainly features of AmEx that people find useful and AmEx cards that fit people but it would help to understand your reasoning in order to make recommendations. I'd generally suggest defining your needs/wants and then using that to narrow down potential cards versus selecting a creditor and then trying to justify a card from that creditor.

SushiRoll wrote:I accumulated 7 credit cards (bad, I know).

X cards isn't good or bad in and of itself.

SushiRoll wrote:Chase gave me the option to consolidate my two cards, either keep the Freedom (high interest rate of 21.9% -_-) or keep the Slate (low interest of 11.9%, but no rewards program). So I'm still debating between my two options or if I should just keep both and pray for higher CL? Not sure yet.

Which is more useful to you? People generally find the Slate only useful for balance transfers. If you want to earn rewards with the Freedom then you need to pay in full or else interest will kill any potential rewards so the APR doesn't really matter much.

SushiRoll wrote:Now my question, is the Everyday Preferred card really a good option as a starter card with AmEx?

"Good" always depends on the specific criteria. Since you haven't defined "good" I'll go with a couple of potential ways to look at it though this doesn't necessarily cover all bases.

From a rewards standpoint the MR points that the Everyday cards accrue are generally of best value when transferred to travel partners for redemption. You have to look at the MR transfer partners (and their programs) and see if you can leverage them and make the most of redemptions.

You also need to consider reward earn rates versus your major spend categories. Find the cards that earn you the most rewards on where you spend the most.

As for eligibility the AmEx charge cards are supposedly easier to qualify for. I think there are a couple of AmEx credit cards that are also supposedly easier to qualify for but I don't recall which ones off the top of my head. They're common discussion topics on credit discussion sites so you can certainly refer to prior threads as well.

SushiRoll wrote:Current Utilization Rate is at 70% but I'm going to get it down to appx. 40% before I apply.

30% is the generally recommended max. Optimal is only one balance reporting at 10% or less.

SushiRoll wrote:Also, how much will the credit lines closed affect me (they were relatively new, 6 months or so)

Some of the damage was done by opening the accounts. We can't tell you that the impact to you will be points. It's not just a matter of the accounts but your overall credit profile as well. The biggest and immediate impact from closure is to your utilization and you can calculate the change to your utilization from losing the available credit on those accounts.

Your AAoA isn't immediately affected by closing accounts. Closed accounts factor into AAoA as long as they're on your reports. Typically that's 10 years but in some cases accounts fall off earlier.



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