First card but I'm still a bit confused

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4 posts
Shanita
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First card but I'm still a bit confused

Postby Shanita » Tue Sep 10, 2013 8:22 pm

I was approved for Cap One Platinum credit card with a $500 limit. Will having such a low limit make my credit score go up? Right now my credit score is in the 700's because of my student loans. And how should I use this credit card to increase my score as much as possible? Should I try to get a card with a higher limit?


SClay
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Postby SClay » Tue Sep 10, 2013 11:46 pm

Hey there!

Low limits can definitely be used to make a credit score go up if used properly. To increase your score, you would want to make sure the utilization on your card is 30% or less. This would mean that you should ideally only spend a maximum of $150 each month on your card, even though you got a limit of $500. Capital One typically enrolls all their customers in a credit steps program that usually grants a 50% of original credit line increase. If you pay your bill on time for the first 5-7 months + use your card within x number of days after activating the card, then you will get the increase. Check with a Capital One representative for the specifics (and to make sure you're enrolled in the program), or you could dig around online. Regardless, that's the basic idea.

As far as getting a card with a higher limit, note that most credit cards don't come with minimum limits. For example, Some people with the same American Express cards have gotten initial limits as low as $1000 or as high as $20,000+. With a score in the 700's, you could most likely get approved for a different card with a higher limit. However, there are many factors besides score that a lender will look at. Besides student loans and the Capital One Platinum, do you have any other lines of credit? What is your utilization if you do have more cards/lines of credit? What are the limits? Also, what is your annual income? All of these factors play into the decision of a approval/denial in credit.

Hope this helps!
Capital One Secured AU | $1851 | 10/2013
Capital One Journey | $1000 | 03/03/2016
American Express Delta Gold | Denied | 03/13/2016
Citi Bank Double Cash | $1000 | 03/13/2016
Chase Amazon Visa | Pending | 03/13/2016

whit
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Postby whit » Wed Sep 11, 2013 12:20 am

How much are your student loans?

Students who carry high balances 50k, 100k heck 200k+ in loans are hard pressed to get approved for ccs much less get a credit limit increase; especially if they don't have any income because loans like that mean they're going for something that requires them to take lsat or mcat--


Depending on your debt to income ratio; that could be the reason your credit limit is so low. Don't despair because student loans are better then credit card debt. I mean, looks better

But doesn't change the fact that that may make them wary to raise the limit, unless you have other factors (super high credit score, an income that is pretty good, long standing credit history, etc)

Shanita
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Location: Maryland

Postby Shanita » Wed Sep 11, 2013 7:28 am

Thanks for your help guys! My loans are like 30K!!! Hurts to think about it! I don't have any other credit cards, I did open a store credit card (not knowing what is was exactly) and I never used it so I cancelled it shortly after opening it but besides that, this is my first credit card. My annual income is about 15,000 because I'm volunteering for a year. I just graduated! Everyone in my family has horrible credit so I want to start off right, and be responsible.



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