Need help selecting a card for a friend

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CarefulBuilder14
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Re: Need help selecting a card for a friend

Postby CarefulBuilder14 » Thu Dec 29, 2016 1:39 am

yfan wrote:
mountaindewvoltage wrote:I've seen many cases over at Myfico where AMEX and other lenders wouldn't approve a CLI simply because the cardholder never spends nearly the amount of the limit. I find most of my auto credit limit increases happen ONLY when I spend near the limit and then pay the card off.

Both experiences are real. This is why I said it is entirely dependent on the lender and the borrower. Each combination is unique. There are definitely lenders who have not given my any CLIs without HPs (in my case, Chase, BofA), and yet others who have (in my case Amex, Citi, Capital One, Discover). At least up to a level, some lenders will give higher limits even if one doesn't spend more.

IIRC, you have several cards with limits around $2k or less. Assuming those are the cards that got auto-CLIs, it may be hard to link cause and effect. They could be due to spending, or to a generally improving credit report.

If you had a 5 year-old card with its original $10k SL limit sitting in your SD...then suddenly spent $15k on it over the course of 3 months...and got a CLI to $20k shortly thereafter...then that might be a bit more persuasive.
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mountaindewvoltage
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Re: Need help selecting a card for a friend

Postby mountaindewvoltage » Thu Dec 29, 2016 3:18 am

CarefulBuilder14 wrote:mdv,

You seem to be confusing "prime" with "premium" (a mistake I used to make, too). "Prime" cards are literally cards with an APR that is the prime rate (currently 3.75%). It's not about having a high income, traveling a lot, or getting perks. Prime means the issuer considers you a very low default risk, and so charges you a very low APR.

"Premium" is perks, AFs, miles, bonuses, etc.

True prime cards don't get much attention on forums because:
1. They are uncommon.
2. People with great credit who bother to spend a lot of time talking about cards are usually more interested in rewards and perks (and can PIF or get some promotional APR better than prime). My Prestige, for example, currently has a 1.99% APR (which beats 3.75%).

It definitely sounds to me like establishing some basic history is the goal. OP's friend doesn't need anything fancy.

I bother with a bunch of AF cards because I travel a fair amount myself, and also coordinate some travel for extended family. If I didn't travel, I'd probably make Discover my primary card.


I consider prime mostly anything that requires a 680+ to get. For example, Citi Double Cash (obviously with no annual fee but does include FTF's and others many cards don't have), AMEX Blue Cash Preferred, and Chase Freedom Unlimited for example.

My main point is the OP should teach his friend how to use a credit card before getting them one. Teach them to pay off the balance, run everything through it to protect their checking account, know about dispute resolution, etc.

I think the rate means very little. Every issuer has a wide range of APR's even for their best products. A 16.24% Chase Sapphire Reserve is still prime just like a 23.24% Chase Sapphire Reserve is... At least that's my opinion.

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kcm7
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Re: Need help selecting a card for a friend

Postby kcm7 » Thu Dec 29, 2016 9:45 am

Agree with most here that OP's friend does NOT need to be funneling $2k through a card to a) Get a high credit limit in the future cards or b) build credit.

My first card had a $500 limit. I charged gas on it (about $60/month). That's it. For more than FIVE YEARS. I was a bit scared of credit, but my dad encouraged me to get a card because I'd need good credit for loans in the future.

My limit increased to $3,000 over the course of those five years with at MOST $100 in spending a month -- I was living "small" during that time, due to low income (cobbled together from a couple part-time jobs). My score was in the upper-700s after five years. I was getting pre-approvals for the best cards on the market.

My newest card (which I don't use much) has a $15k limit, and that's plenty for me. I do spend more on cards these days for the rewards and I certainly earn more, too, but it's still not much by many standards.

Just want to make sure OP isn't discouraged from getting a card due to low spending. Not everyone wants sky-high limits asap. Some just want an excellent credit score and are willing to build that over a few years for a long-term goal, like a house.
Cards:

-Capital One Quicksilver
-Barclaycard Arrival (no AF)
- US Bank (no rewards)
-IHG

forrestst
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Re: Need help selecting a card for a friend

Postby forrestst » Thu Dec 29, 2016 9:28 pm

I don't think the Capital One Platinum card is a horrible thing to have say 5 to 10 years down the road, I doubt if it will grow beyond the steps program so I might always have a low CL, but there's no AF so I don't see what it would hurt to charge maybe $10 every few months just to keep it active.

Where I did make a mistake, I tried to compare the Quicksilver one to the Journey card, which was a stupid thing to do, 2 completely different cards. The Journey card is for students. On my advice, my friend applied for the Journey card and got an instant approval for a $300 CL. Of course the object here is to build credit and I was only looking for cards that my friend could be approved for without a deposit and it seems to be easier to get approved for a Cap1 card than to get approved for a WalMart store card.

For myself, my secured card is with the First National Bank of Omaha. If my card ever graduates, they do have a flat 2% cash back card that I would like to have, but I don't know how hard it will be for me to get it. I was just hoping they would let me PC when the card graduates. As far as spending, if I put everything on one card and threw away my debit card, I could put a lot of money through that card. My issue with QuickSilver One, there's a $39 AF, you only get 1.5% cash back and the starting limit would likely be $300. Spending $200 per month would result in a high utilization. It's my understanding you should spend no more that $100. I just got caught with a high utilization and my credit score tanked. I'm sure at some point I'll be able to get the FNBO 2% back card and when that happens the 1.5% back card will be useless, now if the QS1 had a limit of $2,000, that would be a game changer, but with a $300 limit, I have a debit card that's way better. I just wish I could get the Journey card, 1.25% cash back with no AF. Unfortunately, I'm not a student so no Journey card for me.

mountaindewvoltage
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Re: Need help selecting a card for a friend

Postby mountaindewvoltage » Fri Dec 30, 2016 4:07 am

kcm7 wrote:Agree with most here that OP's friend does NOT need to be funneling $2k through a card to a) Get a high credit limit in the future cards or b) build credit.

My first card had a $500 limit. I charged gas on it (about $60/month). That's it. For more than FIVE YEARS. I was a bit scared of credit, but my dad encouraged me to get a card because I'd need good credit for loans in the future.

My limit increased to $3,000 over the course of those five years with at MOST $100 in spending a month -- I was living "small" during that time, due to low income (cobbled together from a couple part-time jobs). My score was in the upper-700s after five years. I was getting pre-approvals for the best cards on the market.

My newest card (which I don't use much) has a $15k limit, and that's plenty for me. I do spend more on cards these days for the rewards and I certainly earn more, too, but it's still not much by many standards.

Just want to make sure OP isn't discouraged from getting a card due to low spending. Not everyone wants sky-high limits asap. Some just want an excellent credit score and are willing to build that over a few years for a long-term goal, like a house.


Just advising the OP to have their friend use their credit card like a debit card in order to protect their bank account. If one does that, they easily run $1,000+ a month through it, unless of course they don't pay any bills.

forrestst
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Re: Need help selecting a card for a friend

Postby forrestst » Fri Dec 30, 2016 8:40 pm

How do you run $1,000+ per month through a card with a $300 limit? I accidentally charged $298 on my card right before my statement closing date and my statement cut with my card maxed out. I paid it off a couple days later but my credit score still tanked. It was my 3rd statement with Cap1 so I requested a CLI and only got a $100 CLI.

mountaindewvoltage
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Re: Need help selecting a card for a friend

Postby mountaindewvoltage » Fri Dec 30, 2016 11:08 pm

forrestst wrote:How do you run $1,000+ per month through a card with a $300 limit? I accidentally charged $298 on my card right before my statement closing date and my statement cut with my card maxed out. I paid it off a couple days later but my credit score still tanked. It was my 3rd statement with Cap1 so I requested a CLI and only got a $100 CLI.


That's easy, you pay it off once a week.

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Re: Need help selecting a card for a friend

Postby rockyrock » Fri Dec 30, 2016 11:13 pm

forrestst wrote:How do you run $1,000+ per month through a card with a $300 limit? I accidentally charged $298 on my card right before my statement closing date and my statement cut with my card maxed out. I paid it off a couple days later but my credit score still tanked. It was my 3rd statement with Cap1 so I requested a CLI and only got a $100 CLI.



I used to run thousands through a card with only $1500 limit. I basically scheduled a $1k payment every week. After a few months of this they tripled my limit with no questions asked. In fact they offered more but I declined. My score would fluctuate by 50 points every month because of the way I was using the card. None of that mattered though.

You should have waited another month or until you had a lower utilization to request a CLI. Live and learn, you'll get there.
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