New to Credit (18 Year Old)

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JMR
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New to Credit (18 Year Old)

Postby JMR » Sun Feb 23, 2014 11:34 am

I am new to credit. I have been doing research on this forum and other websites about good cards to start with and I applied for the Discover IT for Student card and was approved which was nice. I applied for the Citi Student Card first and was denied and also a Capital One Student card and was denied. I was wondering what your guys input would be on what I should do to grow my credit history. Should I try opening other cards (store cards or regular cc). How long should I wait to apply? For my balance should I pay before the statement cuts to lower debt to credit ratio? (I have payed down balance on my Discover IT already this month because credit limit is low and was reaching it). I appreciate your input!

JMR
Citi AAdvantage Platinum Select- $5000 (3/15)
American Express Gold- NPSL (3/15)
Chase Freedom- $1200 (3/15)
Nordstrom- $1500 (9/14)
Discover IT- $1000 (2/14)

TCL: $8700

FICO (TU)- 716 (3/15)


MemberSince99
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Postby MemberSince99 » Sun Feb 23, 2014 11:44 am

I'd suggest just keep using the IT for 6 months, and get 6 months history reporting for it, and then after you get LOW utilization (meaning under 10%) reporting for the 6th month, you can app for a couple of other cards. Don't make the mistake of opening cards just to open cards - look at them and decide what is important to you over the long run and go for keepers. After 6 months Chase Freedom is possible maybe an Amex revolver like Green for the lower fee with you being a student, etc.

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JMR
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Postby JMR » Sun Feb 23, 2014 12:32 pm

MemberSince99 wrote:I'd suggest just keep using the IT for 6 months, and get 6 months history reporting for it, and then after you get LOW utilization (meaning under 10%) reporting for the 6th month, you can app for a couple of other cards. Don't make the mistake of opening cards just to open cards - look at them and decide what is important to you over the long run and go for keepers. After 6 months Chase Freedom is possible maybe an Amex revolver like Green for the lower fee with you being a student, etc.


Thanks! Do you think the AMEX Green is a good starting card or is it worth it to pay a little extra for Gold?

JMR
Citi AAdvantage Platinum Select- $5000 (3/15)
American Express Gold- NPSL (3/15)
Chase Freedom- $1200 (3/15)
Nordstrom- $1500 (9/14)
Discover IT- $1000 (2/14)

TCL: $8700

FICO (TU)- 716 (3/15)

darkguy2
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Postby darkguy2 » Sun Feb 23, 2014 12:48 pm

I would say no to the Green unless you spend enough to warrant the $95 fee. Nearly all of the extra benefits you get with a Green you also get with your IT.

I agree with Member that you should wait at least 6 months. What is your income? Unless you have the willpower to control your spending then I suggest you do not get more credit then you can pay off. I have over $8K and if I maxed that out then I would be in trouble. You may tell yourself that you can control it but it will be very tempting. I do not know how many times I have seen something expensive and told myself that I can just put it on one of my cards and pay it off later. I have to force myself you think it through before I buy it. You really should never buy something that you do not have the cash to pay for without the credit card. That is when you start getting into dangerous territory.

It is good that you are starting early with your credit. I got my IT when I was 20 just over a year ago with a $1,500 limit. Was my first card and since then you can see that I have grown my credit limit. But it is a double edged sword. I could easily make one mistake and put too much on my cards and default. That means that all of the hard work that I have done to build my credit has just become a liability. I just want to make sure that you understand that credit cards are not free money that you can spend on whatever you want. You WILL have to pay it back and you better be sure that you will be able to do that or you will not be able to get a AMEX or other nice card for a very long time.

I wish you the best of luck on your credit journey since you have just taken the first step.
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)

tigerowl06
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Postby tigerowl06 » Sun Feb 23, 2014 2:01 pm

JMR wrote:Thanks! Do you think the AMEX Green is a good starting card or is it worth it to pay a little extra for Gold?

JMR


Enjoy your Discover card, that's a good one. As for AMEX, charge cards are a great way to get your foot in the door with them, and a great way to get a larger monthly spending ability if you need it (understanding that you have to pay in full at the end of the month). If I were you, I would wait the 6 months and go for the Blue Cash Everyday. You'll love it, and there's no annual fee. It seems AMEX is being generous in terms of approvals/credit lines these days. I think you can sidestep the charge card if you want. If you get denied, you can always get a green card and keep it until you get out of school or whatever and then apply for a revolver when you get a job and I'm sure you'll be approved. You'll get the backdating that way, too. But to reiterate what I said, in light of how things are right now, I would go for what you really want first.
Chase Freedom ($2.5K, 10/2009)
Discover it ($6K; 03/2011)
Amex BCE ($19.5K; 02/2013 - 2011 BD)

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JMR
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Postby JMR » Sun Feb 23, 2014 2:05 pm

darkguy2 wrote:I would say no to the Green unless you spend enough to warrant the $95 fee. Nearly all of the extra benefits you get with a Green you also get with your IT.

I agree with Member that you should wait at least 6 months. What is your income? Unless you have the willpower to control your spending then I suggest you do not get more credit then you can pay off. I have over $8K and if I maxed that out then I would be in trouble. You may tell yourself that you can control it but it will be very tempting. I do not know how many times I have seen something expensive and told myself that I can just put it on one of my cards and pay it off later. I have to force myself you think it through before I buy it. You really should never buy something that you do not have the cash to pay for without the credit card. That is when you start getting into dangerous territory.

It is good that you are starting early with your credit. I got my IT when I was 20 just over a year ago with a $1,500 limit. Was my first card and since then you can see that I have grown my credit limit. But it is a double edged sword. I could easily make one mistake and put too much on my cards and default. That means that all of the hard work that I have done to build my credit has just become a liability. I just want to make sure that you understand that credit cards are not free money that you can spend on whatever you want. You WILL have to pay it back and you better be sure that you will be able to do that or you will not be able to get a AMEX or other nice card for a very long time.

I wish you the best of luck on your credit journey since you have just taken the first step.


Thanks for the input. My income is around 800-1k a month during school and around 3k a month for the summer months. My school is all paid for from scholarships which I am grateful for. I understand it is hard seeing items and knowing you can put it on a card but that isn't that way I approach it. I always make sure I have the money in my account to cover the purchases I make. Almost treat it like a checkbook. I'm waiting for the 3 month mark to maybe get a CLI from Discover because I've payed down my IT before the statement this month already because I was close to credit limit and I want to keep my debt to credit limit low.

JMR
Citi AAdvantage Platinum Select- $5000 (3/15)
American Express Gold- NPSL (3/15)
Chase Freedom- $1200 (3/15)
Nordstrom- $1500 (9/14)
Discover IT- $1000 (2/14)

TCL: $8700

FICO (TU)- 716 (3/15)

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JMR
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Postby JMR » Sun Feb 23, 2014 2:09 pm

tigerowl06 wrote:Enjoy your Discover card, that's a good one. As for AMEX, charge cards are a great way to get your foot in the door with them, and a great way to get a larger monthly spending ability if you need it (understanding that you have to pay in full at the end of the month). If I were you, I would wait the 6 months and go for the Blue Cash Everyday. You'll love it, and there's no annual fee. It seems AMEX is being generous in terms of approvals/credit lines these days. I think you can sidestep the charge card if you want. If you get denied, you can always get a green card and keep it until you get out of school or whatever and then apply for a revolver when you get a job and I'm sure you'll be approved. You'll get the backdating that way, too. But to reiterate what I said, in light of how things are right now, I would go for what you really want first.


I was researching the BCE and BCP as options to apply for. Gas is one of my higher spending categories so that could be an option for sure. I'm not sure the real benefit of the charge cards from AMEX, the green only gives you 1pt per $1 spent, doesn't seem all that great but I could be mistaken. PRG has better point values but the AF is $175 which I don't think I can offset. BCE might be a good choice but maybe BCP might be better have to calculate approx spending on those categories.

JMR
Citi AAdvantage Platinum Select- $5000 (3/15)
American Express Gold- NPSL (3/15)
Chase Freedom- $1200 (3/15)
Nordstrom- $1500 (9/14)
Discover IT- $1000 (2/14)

TCL: $8700

FICO (TU)- 716 (3/15)

rockyrock
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Postby rockyrock » Sun Feb 23, 2014 2:29 pm

JMR wrote:I was researching the BCE and BCP as options to apply for. Gas is one of my higher spending categories so that could be an option for sure. I'm not sure the real benefit of the charge cards from AMEX, the green only gives you 1pt per $1 spent, doesn't seem all that great but I could be mistaken. PRG has better point values but the AF is $175 which I don't think I can offset. BCE might be a good choice but maybe BCP might be better have to calculate approx spending on those categories.

JMR


You do get way more with the PRG but you need to ask yourself if what you get in return will warrant the AF or $175. Given your income I would say the PRG is more than you are ready for right now. The BCP sounds like it could be a good fit if you buy a lot of gas. The AF is usually offset by an intro offer for the first year than after that you can figure out if you want to keep it or PC to a BCE with no AF.

You are off to a great start by doing research and asking advice--something I didn't do and paid the price.

Good luck!
American Express (2005): Green & Blue Cash Everyday
Chase: Freedom & UA Club USAA: Signature Visa & American Express
Discover it Bank of Hawaii Hawaiian Airlines WEMC Synchrony Sam's MC
Navy FCU Platinum Visa Citi Double Cash & AT&T Access MC

darkguy2
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Postby darkguy2 » Sun Feb 23, 2014 3:49 pm

JMR wrote:Thanks for the input. My income is around 800-1k a month during school and around 3k a month for the summer months. My school is all paid for from scholarships which I am grateful for. I understand it is hard seeing items and knowing you can put it on a card but that isn't that way I approach it. I always make sure I have the money in my account to cover the purchases I make. Almost treat it like a checkbook. I'm waiting for the 3 month mark to maybe get a CLI from Discover because I've payed down my IT before the statement this month already because I was close to credit limit and I want to keep my debt to credit limit low.

JMR


That is some pretty good income. With that you should not have to worry about paying off your $500 limit if you have to. Plus you have scholarships so you are pretty much set.

Discover will not let you get a CLI until after 6 months. You may get a auto CLI from them after a few months but you have to wait to ask for one. As long as you have a good history by then I am sure you can get a decent increase with your income. The balance on the card does not effect you credit until the day that the statement posts. So you can have $500 on the card till the day that it is due then pay it off and it would show as $0 on your credit history. The only real reason to pay it off during the month and not right before the post date is like in your case where you get close to the limit and have to pay it down to use it more.
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)

MemberSince99
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Postby MemberSince99 » Sun Feb 23, 2014 5:07 pm

Is that 6 month limit the case on the student cards only? For the regular cards it's 3 months now.


And with that income, if you feel the gold is of value, go for that instead. I made that suggestion based on assuming a student type income. The reason Amex is so important to get your foot in the door with is the backdating. So I'd recommend that.



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