Ask for limit increase or apply for 2nd card?

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CollegeKid
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Ask for limit increase or apply for 2nd card?

Postby CollegeKid » Thu Aug 06, 2009 8:27 pm

Hi everyone, I'm a 20 y/o junior in college who is interested in increasing his credit limit. Would it be wiser for me to ask for a limit increase or apply for a 2nd card?

History:

I applied for my first card in September 2008, approved with a limit of $500 and utilize about 65-75% of my limit every month (I know this is bad!). I pay in full every month and never carry a balance. My 1 year anniversary with my first, and only, credit card is next month and I want to see how my responsible behavior has benefitted my credit.

From what I understand, asking for an increase on your credit limit requires a hard inquiry/pull on my score. Does a hard pull for a limit increase do the same amount of damage as applying for a new card? The reason I ask is because the rewards system for my current card isn't the best. Points expire in one year (I know AMEX points don't expire) and the reward selection is pretty dismal.

As stated above, I utilize over 50% of my paltry limit every month. Again, I pay in full every month so I don't know if that counteracts the effect of spending more than the recommended 30%. Would I be better off asking for a higher limit on my current card and continue to deal with the poor rewards system, or, should I pull the trigger and apply for a new card that will better reward my spending and payment habits?

Sorry for the long post; I hope I got my point across!


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Mogul of Pineapples
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Postby Mogul of Pineapples » Thu Aug 06, 2009 11:42 pm

Since you've been paying your bill off every month in full they should give you a credit limit if you ask. I would call them up and basically describe exactly what you wrote here. Remind them that you are are responsible and pay your bill off in full every month. But you need a higher limit to cover you monthly spending. Go ahead and throw out the fact that you don't want to use more than 30% of your credit limit every month.

They then should be able do one of two things. They can either check to see if your eligible for an automatic increase, or you can ask for an amount and they will submit your request which will either be approved or denied. I would do the first option and see if you're eligible for an automatic increase. That should get it up to a $1000 I would think, but in times like these you never know.

Even if that works I would look into getting a second credit card and building up the same kind of positive payment history on it. That way you can have another round of credit to add to your credit report. Plus sometimes in order to get a decent credit limit you just have to open a new card. When I was 19 I had to do the same thing. I had a card with a $500 limit. I asked for an increase and they only upped it to $700 despite me having a 18 months of perfect payment history and never a balance. I then applied for a card elsewhere and got a $2000 limit right off the bat.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

CollegeKid
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Postby CollegeKid » Fri Aug 07, 2009 1:59 am

Thanks for the advice. I'm leaning towards applying for a 2nd card, but I'm unsure as to what is within my reach. My parents swear by their AMEX and I've done some research on their offerings. Would AMEX even consider extending credit to someone my age with such a short credit history?

CollegeKid
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Postby CollegeKid » Sun Aug 09, 2009 7:34 pm

I just got off the phone with USBANK and they told me that my account wasn't eligible for a CLI. I explained my history to the representative and she told me that I shouldn't try to apply for a higher limit with my card because it is technically for college students and the banks aren't willing to up the limit on college cards. She suggested that I apply for a 2nd card that isn't for college students given my payment history. She recommended that I apply for a 2nd card with someone other than USBANK and shop around for the best rates if I may need to carry a balance in the future.

Where do I go from here? What cards would you recommend?

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Mogul of Pineapples
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Postby Mogul of Pineapples » Mon Aug 10, 2009 2:28 am

That's surprising that she recommended you apply for a card other than someone with US Bank. I respect her honesty! She's right about the student cards that can be a problem.

Capital One may be worth considering because they usually accept limited and poor credit history more than the others. But the thing is they are a crappy company with horrible customer service so if you got one only do so to build up a history on the card for your credit file. This isn't a card you want to use if you don't have to.

Discover is good but I don't think they would approve you quite yet because they're almost as picky as Amex.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

CollegeKid
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Postby CollegeKid » Mon Aug 10, 2009 11:16 pm

Are the credit gods listening to me? I received a "Pre-Approved" offer from Chase for Chase Freedom with 0%APR until March 2010. I get extra reward points for having a checking account with them. Is this a card that I should even consider?

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Mogul of Pineapples
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Postby Mogul of Pineapples » Wed Aug 12, 2009 12:56 pm

A lot of the "pre-approved" offers they send in the mail are pretty deceiving. They're not based on your credit record, they just send them using mailing lists to groups of people they think would be qualified. i.e. If you live in zip codes where people have better credit ratings or if you've filled out your occupation and income in some survey results they bought. There's nothing pre-approved about them. What they mean is that if you apply and have the credit history necessary to get the card than you are approved. But isn't that always the case? haha

But back to Chase, they are an okay company but I wouldn't rate them the best. They give me pretty lousy credit limits on my accounts and a lot of people on the credit card forums on here have been complaining about their interest rates recently being jacked for no reason.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

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Mrs. GoodCash
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Beware pre-approved credit cards

Postby Mrs. GoodCash » Thu Aug 13, 2009 12:25 pm

Mogul of Pineapples wrote:A lot of the "pre-approved" offers they send in the mail are pretty deceiving. They're not based on your credit record, they just send them using mailing lists to groups of people they think would be qualified. i.e. If you live in zip codes where people have better credit ratings or if you've filled out your occupation and income in some survey results they bought. There's nothing pre-approved about them. What they mean is that if you apply and have the credit history necessary to get the card than you are approved. But isn't that always the case? haha

But back to Chase, they are an okay company but I wouldn't rate them the best. They give me pretty lousy credit limits on my accounts and a lot of people on the credit card forums on here have been complaining about their interest rates recently being jacked for no reason.


I agree with Mogul. Be very careful with "pre-approved" cards and make sure you read ALL of the fine print. The problem with credit cards is that they don't supply the FULL terms and conditions until they actually supply you the card. And don't throw away the Cardholder Agreement that they send with the Card. Indeed, Chase isn't one of the best, but then none of them have a great track record. As a credit counselor, I find that Cap One is one of the worst to try to negotiate anything. Citibank probably takes second spot.
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CollegeKid
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Postby CollegeKid » Thu Aug 13, 2009 2:47 pm

Thanks everyone! It seems like the odds are stacked against me for any card I'm remotely interested in. From what I understand, I'm not eligible for some of the higher end cards with lower APR and the ones that I am eligible for are just as insignificant as the card I currently have. I realize that everyone has to start somewhere, but I'm frustrated that my responsible behavior with my small credit card doesn't set me apart from those without credit/terrible credit history.

Would I have better luck if I were to include my parents income for the "Household Income" field?

P.S. I appreciate everyone's advice. It's nice to have a few adults to consult besides my parents.

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Mrs. GoodCash
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Postby Mrs. GoodCash » Thu Aug 13, 2009 4:22 pm

CollegeKid wrote:Thanks everyone! It seems like the odds are stacked against me for any card I'm remotely interested in. From what I understand, I'm not eligible for some of the higher end cards with lower APR and the ones that I am eligible for are just as insignificant as the card I currently have. I realize that everyone has to start somewhere, but I'm frustrated that my responsible behavior with my small credit card doesn't set me apart from those without credit/terrible credit history.

Would I have better luck if I were to include my parents income for the "Household Income" field?

P.S. I appreciate everyone's advice. It's nice to have a few adults to consult besides my parents.

Yikes, you can't fudge on the credit card app College Kid. When you sign the App, you're normally promising under "penalty of perjury" that the info is correct. So don't commit perjury. I don't know what your credit score is, but you seem to be in a big hurry to boost your credit? There are alternatives. Have one of your parents co-sign on a card (providing their credit is OK). And you can also now BUY someone else's credit history for a fee and make monthly payments for six months. This can boost your score 50 - 100 points. You get to choose the credit history you want to buy. You can also consider a "store" card like Best Buy/Old Navy/Home Depot. Again, read the fine print before you commit. And be careful about applying for too many cards trying to win approval, that can also drastically affect your credit. Good luck, Kid!

Sara Jane
mrsgoodcash@gmail.com
www.creditcardsexposed.com
"Wealth is the ability to really experience life." Thoreau

Sara Jane
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http://www.creditcardsexposed.com



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