Hi there everyone. My name is Kevin, I'm 21 and I've still got my starter cards. It's time to upgrade, since these cards have low limits and no perks. I feel I have a pretty good knowledge of credit, credit cards, loans, and just finance in general. However, nothing beats input from people who use different cards on a daily basis.
I have a PNC Visa Points card with a $500 limit. This is the first card I ever got when I was 18. It was issued in July of 2009. It just recently, within the last 2 months, started to link to my debit card from PNC so now the points are pooled together. They really are worthless though, since everything cost a fortune in points. I use this card for every subscription-based thing I have. Gym membership, netflix, cell phone, etc. It's paid in full every month. I don't use it for anything else, and how can I? With a $500 cap, I might as well just buy it in cash. The interest rate is about 14.9%.
I have a Capital One Platinum MasterCard with a $750 limit, which is the second card I ever got, only 3 months after my PNC Points Card. It was issued in September 2009. It started as a $500 limit, and after I was in good standing for 3 months, they raised it to $750. I use this card randomly. I buy fuel with it here and there, sometimes food, whatever I feel like. The only reason I use it is to show them some activity. The interest rate is 22.99%, and with a special promotion, they dropped it to 18.9% for 6 months. Again though, with a $750 limit and an interest rate like that, why would I even bother buying anything with it instead of paying in cash?
I have my AMEX Gold (Not the rewards one) which has no pre-set limit, and it's the third card I ever got. I'm happy with the AMEX card. I can buy what I want and pay it in full. Every now and then, I make a bigger purchase and pay it over 2-3 months since the interest is somewhere around 14.9% or so. Not everyone takes AMEX though, so it does limit you a little bit.
I got my car loan May 31st, 2010 with my dad as a co-signer. I pay a bit more than the minimum every month, all of the payments have been 2 weeks early, and the balance is now ~$16.2k. When I got the loan, it was for ~$24.5k. The loan is through Chase Bank, and I've been told by people that it's really good because Chase is very picky about who they loan money too.
Now, there are several reasons why I want to upgrade my cards.
- I want points, cash back, or something for using them
- I want a higher limit card so I can buy bigger things and pay them off over a couple months if I decide to
- I hate that if I spend $300 out of my available $1,250, it sees that as 24% of my available credit being used, lowering my credit score temporarily. With a card that has a limit of $5k or so, that wouldn't even be a factor.
- I plan to buy a house within the next 5-6 years, possibly sooner, and having an excellent credit report with credit cards that have limits of $5k or more, along with my car loan in good standing, looks much better than good credit with starter cards that have $500 and $750 limits. *** NOTE *** I don't want to go crazy with credit cards right now, because having crazy limits on your credit cards when you apply for a mortgage counts against you as too much potential debt, and can hurt you. However, having at least one card over $5k is helpful to show you can manage credit properly.
I was going to apply for a Capital One Venture card, but after thinking about it and reading up on everything, I don't know if points are the best option since I don't spend crazy money on cards every year. Under $10k per year on cards currently. I also looked into a Chase Sapphire, but after beating it out of a person on the phone who didn't want to tell me, I found out they really don't want to accept you unless you make $70k at a minimum with an amazing credit score.
I've also been told that airline cards provide more miles, and their miles are worth far more for plane tickets than miles or points from regular cards. I know you also run into the issue of blackout dates and availability and all that. I also don't fly often since I work 6-7 days a week and I'm a really cheap person. I think I've been on 6 round trip flights in my life. That's a reason why I think cash back might be a better option, especially since everything that you can buy with points costs a small fortune.
I just checked my credit with Score Sense and across the board at all 3 bureaus I have a 766. It'll go up to about 775 if I wait another month for it to update since I paid every card in full. I have no hard inquiries (well - there's one on experian from Verizon from just under 2 years ago, and one from Kohl's (store card) from a bit over a year ago -- both companies claim they were soft inquiries, but Score Sense lists them as hard inquiries -- Equifax and TransUnion are clear), no late payments, no judgements, no collections, nothing at all that is negative.
So I'm asking for an opinion from you guys that have all these different cards. What do you think is the best option for me? I'm specifically looking for a VISA Signature top-tier card, which means $5k minimum limit. I read through quite a few threads here, and I see a lot of you guys saying the Chase Freedom is a great card. Since my car loan is with Chase, that would probably help me get approved. Can you guys give me some more details why it's great since you use it every day? Also, are there any income requirements to get it? My main concern is not getting approved for $5k or so which means I wouldn't be able to get a Signature card.
If I left out any information that is necessary, I'll be more than happy to provide it.
Thanks for the help,