Second card suggestions for someone aiming to build credit.

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ShamWoW
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Second card suggestions for someone aiming to build credit.

Postby ShamWoW » Mon Nov 03, 2014 6:37 pm

I'm 25 and made the mistake of just recently getting into the credit game. I got my first card 12 months ago, a Chase Freedom card with a $500 Limit. I haven't missed a payment and CK puts me at 720 now that I got my utilization below 30%, but I assume its a weak 720, because this is the first credit card I have on my history and the account has only been open a year(no loans or anything)...

I have conflicting advice from people about whether it will be good for my credit to get a second card, but where I've landed (please correct me if I'm wrong) is that in the long run it will be better for my credit if I get another card provided I continue to do well with my payments and utilization rate.

I don't need the card for extra money I'm doing this purely for the sake of building my credit further, so my question is, what credit card would you suggest for me? I do very little traveling and I think ideally I would like to find another rewards card, preferably one with an easy to manage payment system. No annual fee is a must.

The cards that have caught me eye so far.. are the two suggestions CK gave me:

Blue Cash Everyday- American Express(this one looks like a solid choice, and I really dig the no enrollment bit for the cash back rewards...)

BankAmericard Cash Rewards (This one I don't care for overly much as I have no Bank of America account and some of the bonus's on this card would be wasted on me)

This one isn't on the suggestion list but it looks good... Discover It - 18 month balance transfer card looks great! I don't think I need the balance transfer bit, albeit I don't fully understand what it is to be honest, but the cash back rewards look solid and the free FICO statements would be pretty cool, provided they don't count as hard inquiry's and mess with my credit. It also has great reviews which has to count for something.. Main issue with this one is the average acceptance score is 741 according to CK, and I would REALLY like to avoid any turn downs.

TL;DR is a second card a good or bad choice? If its a good choice what card would you suggest?


Nixon
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Postby Nixon » Tue Nov 04, 2014 3:21 am

ShamWoW wrote:I'm 25 and made the mistake of just recently getting into the credit game. [color="Red"]I got my first card 12 months ago, a Chase Freedom card with a $500 Limit.[/color] I haven't missed a payment and CK puts me at 720 now that I got my utilization below 30%, [color="Red"]but I assume its a weak 720, because this is the first credit card I have on my history and the account has only been open a year[/color](no loans or anything)...

[color="DarkGreen"]Did you have to recon for approval or was that an instant approval with that limit? Yikes...I'd definitely be pounding on Chase's door asking for a CLI if I were you. I'd have done so at least half a year ago.[/color]

[color="DarkGreen"]And yeah....It's not a strong 720. (Score isn't everything!), It will most certainly drop with Inquiries for new credit and new opened acounts due to your AAoA which will take a nasty hit if this is truly your only tradeline.

I suggest apping for a Discover It if you know your EQ is within range (It should be), they seem to like thin clean profiles.
[/color]

[color="Red"]I have conflicting advice from people about whether it will be good for my credit to get a second card[/color], but where I've landed (please correct me if I'm wrong) is that in the long run it will be better for my credit if I get another card provided I continue to do well with my payments and utilization rate.

[color="DarkGreen"]It hurts you in several factors to only have the one credit card. If it's your prerogative to do so, then it shall be however. I would start with one card, and possibly two cards now so that they begin aging together, Sure your AAoA will take a bath but it'll bounce back eventually!
[/color]


I don't need the card for extra money I'm doing this purely for the sake of building my credit further, [color="Red"]so my question is, what credit card would you suggest for me?[/color] I do very little traveling and I think ideally I would like to find another rewards card, preferably one with an easy to manage payment system. No annual fee is a must.

[color="DarkGreen"]Like I mentioned above, I think you'd make a good candidate for a Discover It.[/color]

The cards that have caught me eye so far.. are the two suggestions CK gave me:

[color="Red"]Blue Cash Everyday- American Express(this one looks like a solid choice, and I really dig the no enrollment bit for the cash back rewards...)[/color]

[color="DarkGreen"]Good card, and I'd recommend it for a 3rd card if you so choose to go for it. It'll get your foot in the door with AMEX and an opportunity to bolster your AAoA in the future with more AMEX cards.[/color]

[color="Red"]BankAmericard Cash Rewards (This one I don't care for overly much as I have no Bank of America account and some of the bonus's on this card would be wasted on me)[/color]

[color="DarkGreen"]I wouldn't waste my time on this one, I'd go for the Better Balance Rewards if I had a choice of BoA cards.[/color]

This one isn't on the suggestion list but it looks good... [color="Red"]Discover It - 18 month balance transfer card looks great![/color] I don't think I need the balance transfer bit, albeit I don't fully understand what it is to be honest, but the cash back rewards look solid and the free FICO statements would be pretty cool, provided they don't count as hard inquiry's and mess with my credit. It also has great reviews which has to count for something.. Main issue with this one is the average acceptance score is 741 according to CK, and I would REALLY like to avoid any turn downs.

[color="DarkGreen"]Yes it does, and I'd take anything CK has to say with a truckload of salt. I got approved for a Discover It with an EQ FICO of 637. However I have a moderately thick file.[/color]

TL;DR [color="Red"]is a second card a good or bad choice?[/color] If its a good choice what card would you suggest?


[color="DarkGreen"]It's never a bad choice![/color]
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ShamWoW
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Postby ShamWoW » Tue Nov 04, 2014 4:57 am

Did you have to recon for approval or was that an instant approval with that limit? Yikes...I'd definitely be pounding on Chase's door asking for a CLI if I were you. I'd have done so at least half a year ago.

I originally got declined, but a couple months later after setting up a direct deposit with my job(the person at Chase I talked to suggested I do so) I got pre-approved and got my Chase Freedom. I've heard that a lot of times you will get an auto CLI with good payment history etc. I didn't want to run the risk of the inquiry without gain, and figured if I qualified for one they would give it to me.

And yeah....It's not a strong 720. (Score isn't everything!), It will most certainly drop with Inquiries for new credit and new opened acounts due to your AAoA which will take a nasty hit if this is truly your only tradeline.

My AAoA will definitely take a hard hit, that's why I want to avoid getting declined because I already have enough of a CS drop to worry about...

I suggest apping for a Discover It if you know your EQ is within range (It should be), they seem to like thin clean profiles.

I've decided this is what I'm going to do, after some other consultations as well as this. I'm going to clear my balance on my Freedom and wait for CK to update with that info and then take a crack at it.. Not 100% sure what "EQ" is but if my use of context clues serve it's a way of referring to Credit Score?

It hurts you in several factors to only have the one credit card. If it's your prerogative to do so, then it shall be however. I would start with one card, and possibly two cards now so that they begin aging together, Sure your AAoA will take a bath but it'll bounce back eventually!

This is another thing I was considering, but after the drop from the Inquiry and the AAoA destruction getting that third card might be a long shot.. Might have to stagger the third card a few months..

Like I mentioned above, I think you'd make a good candidate for a Discover It.

Now you're just getting my hopes up! ;-)

It's never a bad choice!

Looking forward to putting all this new info to use, appreciate your time and input!!

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Postby Vattené » Tue Nov 04, 2014 7:43 am

I agree with Nixon and would suggest Discover. They have a reputation (who can say if it is true) for wanting to build loyalty and being generous to credit novices. Even though you have a thin profile, I would guess that with a full year of clean history your chances are good with any of the cards you mentioned.

I like Discover for you because of the free FICO scores - that is a huge perk and will help you monitor your progress. It can be a good compliment to the Freedom (and, like the Freedom, they couldn't make enrolling in the rotating categories easier), but if you would rather not have a card where you have to worry about signing up for rotating categories then consider the chrome version of the Discover it as a good "everyday" card. You get 2% on gas and restaurants (with a $1,000 quarterly cap) and 1% on everything else. You can also switch back and forth between the standard it and chrome very easily. I don't know anything about CK's "acceptance" rating, but I will say from experience that acceptance has never been an issue with me. I used Discover for everything for 8 months and could count on one hand the number of times it wasn't accepted. Any major brand will accept all 4 networks; if you buy a lot from small, local merchants then Discover and Amex might be iffy but it is still rare. With your Freedom as a backup, I wouldn't worry at all about this.

Consider the Amex BCE, too. Amex does backdating, which will help you if and when you apply for another Amex down the road - the year of any account you open will be backdated to the year you established membership. You may want to wait a few months after getting a second card before you go for the third to be safe, but more credit cards will help you (assuming you use them responsibly and always pay in full). Don't be surprised if your score dips at first; it will help you in the long term. Establishing these tradelines early on will build a history that will help your score by the time you need it to be good.

EDIT: And see if Chase will give you a CLI. You can ask if they can do it without a HP.
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FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

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CarefulBuilder14
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Postby CarefulBuilder14 » Tue Nov 04, 2014 7:56 am

BCE and Discover It are both great options.

I'd apply for the BCE first so you can get 2014 backdating. Once you have been approved for it, then think about getting a Discover. You'd have a chance of getting the It as a third card pretty quickly.

A rejection is certainly possible with either of those cards.

You're right to want to avoid applying for a huge number of cards, but two more inquiries or new cards at this time won't hurt you.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

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Postby takeshi » Tue Nov 04, 2014 8:06 am

ShamWoW wrote:I have conflicting advice from people about whether it will be good for my credit to get a second card, but where I've landed (please correct me if I'm wrong) is that in the long run it will be better for my credit if I get another card provided I continue to do well with my payments and utilization rate.

In the long run it can be beneficial. In the short term you'll take some hits due to the hard pull and drop in your AAoA which is already low to begin with. However, you have break some eggs to make an omelette. Generally, speaking, for scoring purposes at least 2-3 cards are recommended.

I'd agree that if you're building your credit it wouldn't hurt to get your foot in the door with AmEx. You can't make use of it now but once you establish membership all of your future cards will be backdated which help with AAoA. In other words, if you joined this year any card you applied for in future would report as opened in 2014.

ShamWoW wrote:I haven't missed a payment and CK puts me at 720 now that I got my utilization below 30%, but I assume its a weak 720

It's also not a FICO score. Discover could be handy if you want to actually monitor your TU 08 FICO.

ShamWoW wrote:I don't need the card for extra money

A good thing because credit cards are not income. However, consider that having additional credit available to you can help with your utilization.

ShamWoW wrote:I don't think I need the balance transfer bit, albeit I don't fully understand what it is to be honest, but the cash back rewards look solid and the free FICO statements would be pretty cool, provided they don't count as hard inquiry's and mess with my credit.

Balance transfer is used to transfer a balance from one card to another -- generally to take advantage of lower interest rates.

The score that Discover provides does not incur any hard pulls.

As for rewards, you already have a card with categories that change every quarter. Do you want another? Have you compared the Freedom calendar to that of the Discover?

ShamWoW wrote:The cards that have caught me eye so far..

What makes these catch your eye? Have you considered what categories your major spend are in and which cards would give you the best rewards for those categories and amount of spend? The BCE is sometimes a good fit but in many cases the Sallie Mae or BCP could be better in terms of rewards. You really just have to crunch the numbers, determine where your priorities lie and decide based on all that to determine which card(s) are in your future.

Nixon wrote:Yikes...I'd definitely be pounding on Chase's door asking for a CLI if I were you. I'd have done so at least half a year ago.

Good luck with that. Chase isn't known for handing out CLI's. Though they've granted several auto CLI's to my wife.

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Postby Nixon » Tue Nov 04, 2014 11:04 am

takeshi wrote:Good luck with that. Chase isn't known for handing out CLI's. Though they've granted several auto CLI's to my wife.


You can say that again!

But it doesn't hurt the OP to try especially if it will help out utilization.
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Postby ShamWoW » Tue Nov 04, 2014 5:05 pm

Vattené wrote:I agree with Nixon and would suggest Discover. They have a reputation (who can say if it is true) for wanting to build loyalty and being generous to credit novices. Even though you have a thin profile, I would guess that with a full year of clean history your chances are good with any of the cards you mentioned.


I like Discover for you because of the free FICO scores - that is a huge perk and will help you monitor your progress.

I originally thought of the free FICO score as neat, but didn't give it enough credit because I wasn't fully aware of how unreliable CK's provisions could be. I definitely like the idea a lot more now...

It can be a good compliment to the Freedom (and, like the Freedom, they couldn't make enrolling in the rotating categories easier), but if you would rather not have a card where you have to worry about signing up for rotating categories then consider the chrome version of the Discover it as a good "everyday" card. You get 2% on gas and restaurants (with a $1,000 quarterly cap) and 1% on everything else. You can also switch back and forth between the standard it and chrome very easily.

The more I think about it I really don't mind enrollment overly much especially when the potential for rewards are higher.

I don't know anything about CK's "acceptance" rating, but I will say from experience that acceptance has never been an issue with me. I used Discover for everything for 8 months and could count on one hand the number of times it wasn't accepted. Any major brand will accept all 4 networks; if you buy a lot from small, local merchants then Discover and Amex might be iffy but it is still rare. With your Freedom as a backup, I wouldn't worry at all about this.

Oh yeah I know how widely accepted Discover is, I was actually referring to CK's projected approval rate based on credit score which is average - 741 Typical Low - 702

Consider the Amex BCE, too. Amex does backdating, which will help you if and when you apply for another Amex down the road - the year of any account you open will be backdated to the year you established membership. You may want to wait a few months after getting a second card before you go for the third to be safe, but more credit cards will help you (assuming you use them responsibly and always pay in full). Don't be surprised if your score dips at first; it will help you in the long term. Establishing these tradelines early on will build a history that will help your score by the time you need it to be good.

With the Amex backdating bit, do you think it might be beneficial to go for the BCE first( other people talked about this), would it being recorded as starting in 2014 look much better than if I were to open it a few months into 2015 after (hopefully) acquiring the Discover It?



EDIT: And see if Chase will give you a CLI. You can ask if they can do it without a HP.

Should I do this before or after I apply for my next card? If they approve the CLI their will be a hard inquiry CS drop that could effect my chances of being approved on my second card right?


I appreciate your time and input!!

takeshi wrote:In the long run it can be beneficial. In the short term you'll take some hits due to the hard pull and drop in your AAoA which is already low to begin with. However, you have break some eggs to make an omelette. Generally, speaking, for scoring purposes at least 2-3 cards are recommended.

Fortunately i'm in a pretty financially stable position right now, and not looking into any large purchases so I thought this would indeed be the best time to get to work on this because I understand how it will initially effect my credit negatively. Happy to hear 3 cards is a decent starting point think I'm going to aim to get both the AMEX BCE and DIscover It shortly, now just focusing on which I want to get first...

I'd agree that if you're building your credit it wouldn't hurt to get your foot in the door with AmEx. You can't make use of it now but once you establish membership all of your future cards will be backdated which help with AAoA. In other words, if you joined this year any card you applied for in future would report as opened in 2014.

This is really helpful information, making me reconsidering getting the Discover It first because from my understanding there are some widely sought after AMEX cards and having the backdating sounds like it could be very beneficial for me credit down the line..

It's also not a FICO score. Discover could be handy if you want to actually monitor your TU 08 FICO.

That is indeed one of the awesome pro's of Discover I'm looking at right now...

A good thing because credit cards are not income. However, consider that having additional credit available to you can help with your utilization.

Balance transfer is used to transfer a balance from one card to another -- generally to take advantage of lower interest rates.

Ok so for someone who generally as a rule clears all their balances monthly this isn't something that will be used very often. Still something to fall back on if the need arises though.

The score that Discover provides does not incur any hard pulls.

Excellent news :D

As for rewards, you already have a card with categories that change every quarter. Do you want another? Have you compared the Freedom calendar to that of the Discover?

I cant really think of any other card that would be more effective for me with my current lifestyle.


What makes these catch your eye? Have you considered what categories your major spend are in and which cards would give you the best rewards for those categories and amount of spend? The BCE is sometimes a good fit but in many cases the Sallie Mae or BCP could be better in terms of rewards. You really just have to crunch the numbers, determine where your priorities lie and decide based on all that to determine which card(s) are in your future.

Indeed I did take a look at the BCE vs. BCP, but with the amount of money I spend I worked out that I would lose more money with the annual fee than I would actually gain in rewards


Good luck with that. Chase isn't known for handing out CLI's. Though they've granted several auto CLI's to my wife.

[B]Haha thanks for the confidence booster ;-) At least I can find out if I can get a CLI without a hard pull based on what someone else said, I'll still give it a shot.


Appreciate your input, you've been very helpful!

ShamWoW
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Postby ShamWoW » Tue Nov 04, 2014 5:28 pm

Apparently AMEX caught me sniffing around... I just got mail saying I've been selected to apply for green card membership... I was immediately disinterested after seeing the $95 dollar annual fee. Is the green card easier to get than the BCE(I assume so), does this card serve as an indicator of the likelihood that I would be approved for an AMEX BCE?

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Postby MB131174 » Tue Nov 04, 2014 5:46 pm

ShamWoW wrote:Apparently AMEX caught me sniffing around... I just got mail saying I've been selected to apply for green card membership... I was immediately disinterested after seeing the $95 dollar annual fee. Is the green card easier to get than the BCE(I assume so), does this card serve as an indicator of the likelihood that I would be approved for an AMEX BCE?


Generally their charge cards are easier to get than the revolvers because you're required to pay in full every month. To answer the second question - no.
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