How long should I wait to apply for a rewards card after paying off a debt?

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actorpat
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How long should I wait to apply for a rewards card after paying off a debt?

Postby actorpat » Sat May 10, 2014 2:11 pm

Hi all!

First post! :)

I'm looking to get into the world of Travelhacking, but wanted to start with a relatively clean slate.

This week, I paid off the last of my current 3 credit cards and have zero credit card debt! :)

I'm very interested in applying for the Chase Sapphire Preferred card, but of course want to get the best interest rate and limit I can. Is there a time-frame of how long I should wait to apply (for my credit reports to reflect not having any debt)?

I have 3 cards:
-BoA BankAmericard was at a balance of just over 5K (near max) in August of last year. Was at 2200 this past month, now at 0.
-Chase Slate was at a balance of just under 2500 (near max) in January. Was at 800 this past month, now at 0.
-Capital One Platinum was at a balance of just under 2500 (near max) in August of last year. Has been sitting at 0 for about a half year.

I do have a fair amount of student loan to pay off (it's in the works) that I hope to have finished in the next year and a half.

Is there a "best time" to apply for certain cards? Should I wait another month or so having just paid off the Chase Slate and BankAmericard cards?

I'm just eager to start having any transactions I make start working extra for me. :)

Thanks for any advice! :)


haikuginger
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Postby haikuginger » Sat May 10, 2014 6:09 pm

Wait until a week after the statement cuts that reflects the balance having been paid off.

takeshi
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Postby takeshi » Mon May 12, 2014 10:22 am

actorpat wrote:Is there a time-frame of how long I should wait to apply (for my credit reports to reflect not having any debt)?

However long it takes for your creditors to report and for the CRA's to update. A week after statement end is probably safe. If you want to be sure you can use a CMS to verify reported balances. Or wait longer.

actorpat wrote:I'm very interested in applying for the Chase Sapphire Preferred card, but of course want to get the best interest rate and limit I can.

CSP is a fixed 15.99% currently though your limit can definitely be affected by your utilization.

actorpat wrote:Is there a "best time" to apply for certain cards?

Yup. When one's credit is in best shape. Is utilization your only problem?

actorpat
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Postby actorpat » Tue May 13, 2014 11:58 am

haikuginger wrote:Wait until a week after the statement cuts that reflects the balance having been paid off.


takeshi wrote:However long it takes for your creditors to report and for the CRA's to update. A week after statement end is probably safe. If you want to be sure you can use a CMS to verify reported balances. Or wait longer.


Awesome! I just got those statements this morning, so that would mean around May 20th, I would potentially be in the safe zone to apply and have the paid off balances reflected in my reports? Naive question - "CMS" = Credit Monitoring Service?


takeshi wrote:CSP is a fixed 15.99% currently though your limit can definitely be affected by your utilization.


Yup. When one's credit is in best shape. Is utilization your only problem?


Yeah. According to the credit score tracker from Capital One (it's free and pulls from TransUnion), allegedly (before the zero balances posted) I had a 749 score, and the main "problem area" was utilization; % was hovering at just under 30%. Next month when the report updates, I should be at 0% I would think.

Thank you both haikuginger and takeshi! :)

tigerowl06
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Postby tigerowl06 » Tue May 13, 2014 8:06 pm

Luckily, it's just a function of your reported balance right now. They do not care what your past utilization was. Your current lenders do, but the new one won't. So as soon as your zero balances report, you are good to pull the trigger on the app.
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MemberSince99
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Postby MemberSince99 » Tue May 13, 2014 8:20 pm

Anecdotal evidence suggests that the odds are slightly better when drapping.

Battery111
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Postby Battery111 » Tue May 13, 2014 8:39 pm

I would also ask why APR is a concern for you. I get limit, but even if the CSP had a range of APRs why would you care unless you plan on carrying a balance in the future? I ask because I'm not aware of any rewards card out there where carrying a balance still makes the points worth it. Remember that. If you carry a balance, your points are worth less than the interest you pay.
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