When can I apply for my next Credit Card?

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To My Credit
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When can I apply for my next Credit Card?

Postby To My Credit » Wed May 25, 2016 1:33 pm

Hi, new member here, and I'm only just learning to play the Credit Card game.

I got my first Credit Card (Discover It) in July of 2015. I then got the BankAmericard Cash Rewards card in January of 2016. I recently (mid-May) applied for the AmEx Blue Cash Everyday card and got that one as well. In my ignorance, I applied for the Citi DoubleCash card the same day I received the AmEx card and was rejected. My FICO score was 716 as of the 18th of May, and I've since applied and been rejected for Citi DoubleCash Card. I want to get the Chase Freedom Credit Card ASAP but I don't want another HP on my record just to be rejected again. When is the soonest I can apply for that one with a reasonably good chance of being approved?


TXviking
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Re: When can I apply for my next Credit Card?

Postby TXviking » Wed May 25, 2016 6:50 pm

It's hard to give an accurate answer, as that depends on numerous factors. However, with less than two years of credit to your name, you're going to have a thin file. That's likely to make card issuers wary of letting you take on a lot of new credit all at once.

Inquiries drop off after 24 months, so a conservative answer would be to give it two years. That would also give your credit file time to age. However, the impact of inquiries lessens with time, and entirely apart from the inquiries, creditors will be less jumpy when they see you using credit responsibly for a while. Every creditor is different, but here are some rules of thumb:

- Avoid late payments (even one is bad)
- Don't use more than 30% of your overall available credit (staying under 10% is even better, especially starting out)
- Don't use more than 30% of your available credit line on any individual card either
- Pay more than the minimum every month

I'd also recommend signing up for CreditKarma (often referred to as CK here on the forums) to keep an eye on your credit profile. It's not perfect, and the credit scores they give you are FAKO scores (technically, VantageScore 3.0) rather than FICO scores (what lenders most often use). Nevertheless, it'll give you an idea how you're doing credit-wise, and it's free of charge.

To My Credit
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Re: When can I apply for my next Credit Card?

Postby To My Credit » Wed May 25, 2016 8:05 pm

TXviking wrote:It's hard to give an accurate answer, as that depends on numerous factors. However, with less than two years of credit to your name, you're going to have a thin file. That's likely to make card issuers wary of letting you take on a lot of new credit all at once.

Inquiries drop off after 24 months, so a conservative answer would be to give it two years. That would also give your credit file time to age. However, the impact of inquiries lessens with time, and entirely apart from the inquiries, creditors will be less jumpy when they see you using credit responsibly for a while. Every creditor is different, but here are some rules of thumb:

- Avoid late payments (even one is bad)
- Don't use more than 30% of your overall available credit (staying under 10% is even better, especially starting out)
- Don't use more than 30% of your available credit line on any individual card either
- Pay more than the minimum every month

I'd also recommend signing up for CreditKarma (often referred to as CK here on the forums) to keep an eye on your credit profile. It's not perfect, and the credit scores they give you are FAKO scores (technically, VantageScore 3.0) rather than FICO scores (what lenders most often use). Nevertheless, it'll give you an idea how you're doing credit-wise, and it's free of charge.
Hey, thanks for the response. To cut to the chase:

1. I've never had a late payment. Not even on my non-Credit Card bills.
2. I'm currently at less than 5% and I plan on never going over 10%. With an overall credit line of $19,500, that shouldn't be tough.
3. I rarely ever go over 25%. I generally pay it off when I hit 10%, unless it's a single expense.
4. I always pay off in full. Don't want to pay any interests.

I also just signed up for Credit Karma. Pretty neat. I was hoping I could apply for Chase Freedom 6 months down the line but your post gives me pause. I suppose I'll wait and see what my FICO score is around then, and if it's 750+ I might just give it a try. I don't foresee having to take a loan anytime within the next 3 years, so my only concern with hard inquiries is with how they'd affect my future applications for other credit cards. I plan on eventually getting (1) Chase Freedom (2) US Bank Cash+ (3) Citi DoubleCash in addition to my (1) Discover It (2) BankAmericard Cash (3) AmEx BCE.
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+

MemberSince99
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Re: When can I apply for my next Credit Card?

Postby MemberSince99 » Thu May 26, 2016 8:08 am

I would say check their prequal site.

Basically go for it they have a 5 cards in 24 months rule you should learn about.

App and if denied recon.

takeshi
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Re: When can I apply for my next Credit Card?

Postby takeshi » Thu May 26, 2016 8:35 am

To My Credit wrote:When is the soonest I can apply for that one with a reasonably good chance of being approved?

We can't guarantee anything as we don't have access to the underwriting criteria for any creditor/product out there and the criteria are not identical for all creditors and products. We can give you some general information after looking at your credit profile to try to improve your odds but these are educated guesses based mostly on FICO scoring factors.
http://www.myfico.com/crediteducation/w ... score.aspx

However, a FICO score is just one consideration for the creditors that use a FICO.

To My Credit wrote:I got my first Credit Card (Discover It) in July of 2015. I then got the BankAmericard Cash Rewards card in January of 2016. I recently (mid-May) applied for the AmEx Blue Cash Everyday card and got that one as well.

So from the sound of this you probably a thin credit profile though your profile isn't just credit cards on your reports but all credit accounts. Both of these accounts are still considered new and new account will have a significant impact for you. IIRC accounts are no longer considered new at 2 years but that doesn't necessarily mean that you need to wait 2 years. People tend to suggest waiting 6 months from last application but IIRC that's mostly based on the impact of the inquiry which I'll address below.

3 new accounts and the other HP are a lot of new accounts and credit seeking activity for your credit profile so you need to let these things age off before you apply again.

To My Credit wrote:My FICO score was 716

You don't have just one score. Which model? Which CRA? There are many FICO models used by creditors. For most models you have a score with each of the 3 major CRA's. You also need to consider the relevance of a given model & CRA combo to a given creditor/product. If, for example, a creditor/product uses a TU FICO 8 in the credit decision then only your TU FICO 8 will matter. Other models and CRA's will not be relevant. CKs scores are relevant to creditors that use a TU or EQ VantageScore 3.0 but irrelevant to those who do not. Always consider both the model & CRA and relevance of the combo when referencing scores. Do not attempt to use a score generated by one model to determine a score generated by a different model even if both models are FICO's. Different models evaluate report data differently and can have different scoring ranges.

If you want to see which CRA a creditor uses and which model then take a look at the Credit Pulls Database (Google to find). However, keep in mind that it's never just about score. I think Chase uses a FICO but also uses their own CARS score.

To My Credit wrote:I want to get the Chase Freedom Credit Card ASAP but I don't want another HP on my record just to be rejected again.

HP's are typically a small factor but thin profiles like yours and profiles with issues can see a bigger impact from HP's. That said, don't just obsess over HP's and consider all of the factors.

HP's remain on your report but IIRC they lose their scoring impact at 1 year and their effect begins to taper at 6 months which is why people tend to recommend waiting 6 months. Try at 6 months (~December) but, again, keep in mind that we can't guarantee that you will get approved or denied. Also keep in mind that it's not just the approval itself that matters. Your credit profile will play a significant role in determining the limit, APR, etc as well.

Do not rely on prequals.

Make sure you're carefully considering the cards you apply for. If rewards are a priority then start with your major spend categories (including noncategory) and find cards that maximize rewards on those spend categories. Don't just look at the % earn rates. Do the math so you understand how much you're talking about for your spend. Don't just avoid AF's but consider total cost/benefit.

Many find the Freedom and Discover it to be a bit redundant but you really have to consider such things based on your specific needs/wants.

To My Credit
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Re: When can I apply for my next Credit Card?

Postby To My Credit » Thu May 26, 2016 9:46 am

takeshi wrote:So from the sound of this you probably a thin credit profile though your profile isn't just credit cards on your reports but all credit accounts. Both of these accounts are still considered new and new account will have a significant impact for you. IIRC accounts are no longer considered new at 2 years but that doesn't necessarily mean that you need to wait 2 years. People tend to suggest waiting 6 months from last application but IIRC that's mostly based on the impact of the inquiry which I'll address below.

3 new accounts and the other HP are a lot of new accounts and credit seeking activity for your credit profile so you need to let these things age off before you apply again.
Yeah, I was probably being too eager to get all the cards I want too soon. Patience is a virtue.

You don't have just one score. Which model? Which CRA? There are many FICO models used by creditors. For most models you have a score with each of the 3 major CRA's. You also need to consider the relevance of a given model & CRA combo to a given creditor/product. If, for example, a creditor/product uses a TU FICO 8 in the credit decision then only your TU FICO 8 will matter. Other models and CRA's will not be relevant. CKs scores are relevant to creditors that use a TU or EQ VantageScore 3.0 but irrelevant to those who do not. Always consider both the model & CRA and relevance of the combo when referencing scores. Do not attempt to use a score generated by one model to determine a score generated by a different model even if both models are FICO's. Different models evaluate report data differently and can have different scoring ranges.
716 was the FICO score I got from AmEx. I made an account on Credit Karma yesterday and these are my scores:
TransUnion: 708
Equifax: 711

Looks like Citi made an HP on Equifax. Most of my HPs will fall off in late 2017 (assuming they fall off in 2 years) so that is when I could likely be approved for a card I want.

HP's are typically a small factor but thin profiles like yours and profiles with issues can see a bigger impact from HP's. That said, don't just obsess over HP's and consider all of the factors.

HP's remain on your report but IIRC they lose their scoring impact at 1 year and their effect begins to taper at 6 months which is why people tend to recommend waiting 6 months. Try at 6 months (~December) but, again, keep in mind that we can't guarantee that you will get approved or denied. Also keep in mind that it's not just the approval itself that matters. Your credit profile will play a significant role in determining the limit, APR, etc as well.
I hear you. December makes sense. I'll apply for either Chase Freedom or US Bank Cash+ then. If I'm rejected, I'll probably just wait till late 2017 when most of my HPs will fall off.

Credit Line Limit and APR are not much of a consideration for me because I pay off my bills regularly (often even twice or thrice a month) and in full. My only consideration is that I get approved for the card I want.

Make sure you're carefully considering the cards you apply for. If rewards are a priority then start with your major spend categories (including noncategory) and find cards that maximize rewards on those spend categories. Don't just look at the % earn rates. Do the math so you understand how much you're talking about for your spend. Don't just avoid AF's but consider total cost/benefit.

Many find the Freedom and Discover it to be a bit redundant but you really have to consider such things based on your specific needs/wants.
My major expenses right now are on restaurants. Discover has that covered for 3 months of the year. If I get Chase Freedom, that will likely have me covered for 3 more months of the year. And if I get US Bank Cash+, that's going to cover me on Fast Food for the whole of the year. It's also really useful for my phone bills. I wanted the Citi DoubleCash card for my miscellaneous bills, but they rejected me so I'll have to make do with BankAmericard for now (it gives me a customer bonus because I'm a BofA customer), which also covers my gas expenses.

As for cards with annual fees, I really like the bonuses on Chase Sapphire Preferred and IHG Rewards Club Select, but they're not going anywhere so I'll wait until my credit is in much better standing before I apply for those. For now, I really want (1) US Bank Cash+ (2) Chase Freedom. And maybe even Citi DoubleCash if I manage to be approved for the aforementioned two cards.
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+

Kevin86475391
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Re: When can I apply for my next Credit Card?

Postby Kevin86475391 » Thu May 26, 2016 7:58 pm

It sounds like you're off to a strong, solid start! I'm so glad to hear you're paying in full every month on time and managing your utilization. That will have a huge positive effect long-term.

There's no point in me reiterating the wisdom shared by previous posters in this thread, but I do want to discuss a particular topic as it relates to Chase cards since you want both the Freedom and eventually the CSP.

Chase has a rule called the 5/24 rule. This rule states that people who have more than 5 new accounts in the past 24 months are ineligible (and thus automatically declined if they apply) for their core branded cards: the Freedom, Freedom Unlimited, CSP, and Slate. There is on-going speculation that this could also be implemented for their co-branded cards like the IHG and their other hotel and airline cards.

Since you already have 3 new accounts in the past year, I wanted to make sure you were aware of this Chase rule since for example if you open a Citi Double Cash and US Bank Cash+ that would automatically preclude you from opening a Freedom (and potentially an IHG, though perhaps not) until July 2017 or later. You may thus want to make opening your remaining Chase accounts a higher priority than other accounts unless you're completely okay with waiting beyond the 2 year mark for your existing accounts to exceed 24 months old.

Chase enacted this rule to reduce the number of 'churners' (people merely opening accounts for the signup bonus). As I understand it, it's a rather hard and fast rule that can't be circumvented merely by having a very strong credit profile/score. Of course there could always be exceptions to the rule (I think I read recently about people having some luck by getting personal bankers at physical branches to act on their behalf), but I'd definitely recommend treating it as something you can't get around and acting accordingly.

Anyway, welcome to the forum and the world of credit. Keep up the good work! :cheers:

To My Credit
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Re: When can I apply for my next Credit Card?

Postby To My Credit » Thu May 26, 2016 10:11 pm

Kevin86475391 wrote:It sounds like you're off to a strong, solid start! I'm so glad to hear you're paying in full every month on time and managing your utilization. That will have a huge positive effect long-term.

There's no point in me reiterating the wisdom shared by previous posters in this thread, but I do want to discuss a particular topic as it relates to Chase cards since you want both the Freedom and eventually the CSP.

Chase has a rule called the 5/24 rule. This rule states that people who have more than 5 new accounts in the past 24 months are ineligible (and thus automatically declined if they apply) for their core branded cards: the Freedom, Freedom Unlimited, CSP, and Slate. There is on-going speculation that this could also be implemented for their co-branded cards like the IHG and their other hotel and airline cards.

Since you already have 3 new accounts in the past year, I wanted to make sure you were aware of this Chase rule since for example if you open a Citi Double Cash and US Bank Cash+ that would automatically preclude you from opening a Freedom (and potentially an IHG, though perhaps not) until July 2017 or later. You may thus want to make opening your remaining Chase accounts a higher priority than other accounts unless you're completely okay with waiting beyond the 2 year mark for your existing accounts to exceed 24 months old.

Chase enacted this rule to reduce the number of 'churners' (people merely opening accounts for the signup bonus). As I understand it, it's a rather hard and fast rule that can't be circumvented merely by having a very strong credit profile/score. Of course there could always be exceptions to the rule (I think I read recently about people having some luck by getting personal bankers at physical branches to act on their behalf), but I'd definitely recommend treating it as something you can't get around and acting accordingly.

Anyway, welcome to the forum and the world of credit. Keep up the good work! :cheers:
Hey, thanks! Yes, I've heard of the 5/24 rule Chase has and I've decided that the next card I apply for will be Chase Freedom. I'm going to wait for 6 months, see how my credit looks, and probably apply for Chase Freedom sometime in December. If I'm approved, great. If I'm not, I'll just wait till late 2017 when most of my HPs fall off and try for either the US Bank Cash+ or Chase Freedom again. These are the two cards I want the most.
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+

To My Credit
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Re: When can I apply for my next Credit Card?

Postby To My Credit » Thu Jun 02, 2016 1:10 pm

I decided (against my better judgment) to apply for Chase Freedom today. I was, of course, rejected. I then called in for reconsideration and they approved me for a credit limit of $5000, which is as much as I could have asked for, honestly.

I also called in for reconsideration on my Citi Double Cash application, but they wouldn't budge. They asked me to reapply once my credit history was at least one year old.

Now that I have Chase Freedom, a card I wanted right now so I could make use of the 5% cashback they were offering from July-September on restaurant expenses, I can wait till December before I reapply for Citi Double Cash. I'm going to wait till I have at least two years of credit history before I try for the (supposedly more conservative) US Bank Cash+ card.
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+

To My Credit
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Re: When can I apply for my next Credit Card?

Postby To My Credit » Mon Jun 06, 2016 8:32 pm

Citi is really stringent, isn't it? I've called twice for a recon on my application and they wouldn't even have a manual look at my credit report. The Chase guy did that as soon as I said "reconsideration".
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+



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