New card holder with some questions (18 years old)

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grifenhagen
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New card holder with some questions (18 years old)

Postby grifenhagen » Thu Mar 06, 2014 8:37 pm

Hey guys,
My name's Will and I'm new to credit cards and to this forum.
I turned 18 in November of 2013, and am a senior in highschool. I'll be attending UGA next semester to start off towards my bachelor's degree.
In December of 2013, after I turned 18, I decided to go ahead and start building up my credit. I applied for a Capital One journey card, and got approved with a 300 dollar limit. I have been using it pretty regularly, but I pay it off in full right after the transactions get posted. In december, january and february i spent about 200 on it per month, always paying it off in full long before the due date.
I decided that a 300 dollar limit wasn't going to cut it, so i applied for a discover it student card last week. I got approved for it with a 500 dollar limit, and with the discover card, they tell you your credit score on every statement. When i got the card in the mail yesterday, it included my fico credit score, which was 766. From the little research ive done, thats pretty good for an 18 year old, i believe.
i read that it is not good to use more than 30% of your credit limit, so i still needed more credit.
i applied yesterday for an amex blue cash everyday card, and got approved for it with a 1000 dollar limit.
my questions:
what is the best way to keep raising my credit score? can i only use 30% of my available credit or is that urban legend? i used 70+% of my available credit on my capital one card and my score was 766, so im thinking that it isnt that important.
should i apply for any more cards? i plan on paying everything off in full every month, ive got alot of money saved up and have an amazing job for an 18 year old, making around 1500 a month working 6 hours, one day a week, with no rent, etc. it is all disposable income.


samhradh
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Postby samhradh » Thu Mar 06, 2014 9:25 pm

grifenhagen wrote:what is the best way to keep raising my credit score?

can i only use 30% of my available credit or is that urban legend?

should i apply for any more cards?


1. I would stop applying for more cards unless there's another one that absolutely suits your needs.
2. If you are truly keeping an eye on utilization, 10% or less is commendable. Personally I have better ways to spend my time than on watching my balances and paying them down throughout the month.
3. What you need to do now is "Garden" your three cards. Use the right card for each purchase (ie: AmEx for groceries, Discover for 5% categories). Pay your balances in full. Wait. Once it's been at least six months since your card was opened, attempt a CLI. Increasing your CL will be the single most important thing you can do after paying your bill in full.
Citi Forward ($10.1K), AmEx Blue Cash Everyday ($30K), Chase Freedom ($12.4K), Discover it ($5.5K), Barclaycard Arrival ($12.5K), L.L. Bean Visa ($5K). FICO 806 (TU), 812 (EQ), 806 (EX).

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JMR
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Postby JMR » Thu Mar 06, 2014 9:38 pm

Keep utilization under 10% is good. The reason your FICO was high with the Cap One was you said you pay off the balance before the statement cuts so it reports a low utilization which helps boost your score. You don't really want a 0% utilization, somewhere between 1-10%. If there is another card out there that you think would fit your spending with good rewards then you can apply. I wouldn't really suggest anything with an annual fee because your spending more than likely wouldn't justify the fee. Maybe the Sallie Mae would be good 5% gas , 5% groceries, 5% books (could be through amazon). There are caps monthly set at $250 per category and $750 for books.
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 » Thu Mar 06, 2014 9:46 pm

I'm curious how you get a 766 score at 18, and make 62.50 an hour (1500 / 24 hours) - that's WAY more than I make on an hourly basis so I obviously got into the wrong field. Care to share?

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JMR
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Postby JMR » Thu Mar 06, 2014 9:58 pm

MemberSince99 wrote:I'm curious how you get a 766 score at 18, and make 62.50 an hour (1500 / 24 hours) - that's WAY more than I make on an hourly basis so I obviously got into the wrong field. Care to share?


I was also curious too, but I didn't want to question it haha.
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)

grifenhagen
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Postby grifenhagen » Thu Mar 06, 2014 10:41 pm

I'm a musician that plays once a week, every Saturday night, and I make 300-400 a night w/tips. I have a deal with a local outdoor shipping center and my band plays there. You can find us on iTunes "A Bright November". We haven't been in the studio in over a year and a half so the stuff on there is old, but worth checking out (and possibly buying ;) )

Anyways,
JMR,

Does that mean I shouldn't pay it off in full every month, maybe leave around 5-10% on it and let them hit me with a few cents of interest then pay it off every billing statement? Or should I continue paying it off in full every month?

takeshi
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Postby takeshi » Fri Mar 07, 2014 9:12 am

grifenhagen wrote:i read that it is not good to use more than 30% of your credit limit, so i still needed more credit.

You can use whatever you want. You want no more than 30% to report but that's a maximum. Ideal is probably about 10% or less but there isn't a fixed ideal percentage for everyone as ideal can vary from person to person.

To maintain reported utilization you need to pay your balances down prior to when your accounts report to the CRA's. For most cards reporting takes place at statement end but there are a few cards that report at other times. Keep in mind that utilization is determined at the given point in time so while you generally want to avoid exceeding 30% you probably don't need to worry over optimizing to 10% or less until you're ready to apply for something. I don't bother with it in general because my spend and my limits tend to put me at about 12%.

grifenhagen wrote:what is the best way to keep raising my credit score?

With several new cards you probably just need to put in the time and responsibly use them.

grifenhagen wrote:i used 70+% of my available credit on my capital one card and my score was 766, so im thinking that it isnt that important.

Individual and overall utilization definitely matter. Short term high utilization isn't a big issue but prolonged high utilization can lead to AA -- credit limit decreases, closure, etc. At 60+% (don't recall the exact numbers) over a long time I had a card balance chased to about half of its original limit.

Scores can be handy tools but they're not all that matters.

grifenhagen wrote:should i apply for any more cards?

Your call to make and depends on your credit. Always consider the usual factors involved in credit scoring and your own credit. Consider that each new account drops your AAoA and tacks on an inquiry. Those may have little effect on your credit or they may have a larger affect. I really can't tell you.

grifenhagen
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Postby grifenhagen » Fri Mar 07, 2014 12:30 pm

takeshi wrote:Your call to make and depends on your credit. Always consider the usual factors involved in credit scoring and your own credit. Consider that each new account drops your AAoA and tacks on an inquiry. Those may have little effect on your credit or they may have a larger affect. I really can't tell you.


Because i have such little credit history (3 months) my AAoA is already very low.
Mathematically, your AAoA is the average of how long you have had all of your cards, correct?
If this is the case, it makes more sense to apply for however many cards you want (lets say 4) within a short amount of time of each other. That way in 8 months, your AAoA will be 8 months because you have had every card for 8 months, as opposed to applying for 4 cards over the course of 8 months (1 card per 2 months), because then your AAoA will be lower.
Someone please tell me if i am looking at this the wrong way, I'm a novice and I am just trying to make life easier in the long run.

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otter
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Postby otter » Fri Mar 07, 2014 7:44 pm

Your assumption of AAoA is accurate and I used the same strategy when I rebuilt my credit (after not using credit for years). I figured better to have 10 cards right off the bat than just one. A few caveats:

(1) Get cards which match your spending habits. Don't get cards just to get cards... get cards which maximize your rewards.
(2) Better to have fewer cards with higher limits than a bunch of cards with small limits. If you get too many cards at once, no one is going to want to give you large limits.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

grifenhagen
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Postby grifenhagen » Sat Mar 08, 2014 8:34 am

I really like the idea of having a charge card, it will keep me in line and force me to pay everything off on time.
I'm looking at the Amex gold and green.
Both of them have an annual fee (95 for the green and 125 for the gold).
They both also have the first year free.
Could I get the gold and have it for a year and then before they charge me the 125, call them and have them bump it down to a green?



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