Best strategy for first credit card

All about maximizing your rewards!
Members share tips and tricks for getting the most miles, & points.
7 posts
ajs
Green Member
Green Member
 
Posts: 11
Joined: Tue Jul 19, 2011 2:15 pm
Location: US

Best strategy for first credit card

Postby ajs » Tue Aug 09, 2011 9:07 pm

I posted a while back, and looking to try to clarify some advice I got the last time around.

My situation
24 year old law grad, good job, but virtually empty credit file (I think I have some random positive thing, but not enough to calculate a credit score). Nothing good, nothing bad.

I applied for an Amex Blue Cash Preferred, but was rejected. No other hard checks recently.


What I want
Looking for a good rewards program, ideally cash back since I don't shop at one airline/hotel/store. Was looking at both the Chase Freedom and Discover More, and also the Home Rewards program. Ideally it should have a fairly nice welcome package, although I will be spending a lot so the higher %s are good. Most spending would probably be on food.


Anyways, I'm looking for:

(1) info on what cards I should apply for, and likely get; and

(2) whether my applying for cards (and hence having a hard credit check) hurts my credit given I have none :)


Thanks!


Money card
Centurion Member
Centurion Member
 
Posts: 1361
Joined: Tue Jun 28, 2011 10:13 pm
Location: New York state

Postby Money card » Tue Aug 09, 2011 11:15 pm

certainly you need to start somewhere. Before getting a rewards card you might just want to start out with an average creditcard like
key bank, Td bank a local credit union card.

if citi or chase is a local bank don't go there go to a key bank or citizens something like that. if you get accepted use the card a lot
pay your bills in full. depending upon what your credit limit is let's say 1,000 spend around 300, 350 and some months you may go lower like 100ect. but pay your bill in full.

then after a while Discover is a great card I've had my card since 1998, it's not widely accepted as visa or mastercard. But it's accepted in a lot of places.
theres a 5%rotating category you have to sighn up. they have low caps compared to chase freedom but Discover isn't as accepted as chase freedom. but if you watch yo'ull get 5% cash back which you can get some really cool gift cards.

will you be traveling on business? do you live home with your parents?

ajs
Green Member
Green Member
 
Posts: 11
Joined: Tue Jul 19, 2011 2:15 pm
Location: US

Postby ajs » Tue Aug 09, 2011 11:21 pm

Don't live at home, and won't be traveling too much on business.

Would I qualify for either the Discover or the Chase? Would applying and being rejected hurt my credit despite having none?

DarrellEW
Gold Member
Gold Member
 
Posts: 32
Joined: Mon Jan 17, 2011 12:26 pm
Location: San Antonio, TX

Postby DarrellEW » Wed Aug 10, 2011 4:52 am

It's highly unlikely that you would get approved for either of those cards.

For future reference, the Freedom is much better than the Discover. The Freedom has a higher spending cap each quarter and gives 1% cashback on all purchases, as opposed to Discover's 0.25%.

As far as the impact on your credit score, an inquiry on your report will definitely have a negative impact on your score, especially since you have no other history. Like I said in your last thread, the CC companies have no idea why you're applying for so much credit, so to them it might look like you're trying to get a bunch of credit cards so that you can go on a spending spree with no intent of paying them back.

With that said, one or two inquiries won't hurt you too much. In fact, a lot of CC companies will only pull one of your scores (Experian, Equifax or TransUnion), so if you happen to apply for 3 different cards and they each pull from different agencies, then they'd never know you were looking for CCs elsewhere.

If you really want to try to apply for the Chase Freedom, then go for it. CC companies are now required to give you a copy of the credit score and report that they used to evaluate you if they deny you credit, so if you do get rejected, you'll at least gain a better idea of where your credit stands and what kind of cards you can get.

If I were you, I'd apply for a 1% card that's made for people with average/little credit history.

sticf
Centurion Member
Centurion Member
 
Posts: 132
Joined: Mon Jul 18, 2011 10:08 pm
Location: Houston

Postby sticf » Wed Aug 10, 2011 8:15 am

ajs wrote:(1) info on what cards I should apply for, and likely get; and
(2) whether my applying for cards (and hence having a hard credit check) hurts my credit given I have none :)


Here are some of the things that I would consider:
Look for a "basic card" i.e. one with little or no rewards. Do you have an account with a local Credit Union? In my experience they are a bit easier to deal with for CC approvals.

You could also try contact Amex and see if you qualify for any other cards using the same application as the Blue Cash Preferred.

Think about a secured credit card. While not always the optimal way to proceed. It does however, get you a seat at the table.

As to your second question:
Yes it will affect your credit score. However, there is no way to get credit without them doing hard credit checks. At this point it is going to be more important you establish credit than worry about 3-4 "hard pulls". Remember that these inquiries are a small section of the score (~10%), and they fall off quick (~2 years). I try to always think about credit as a "long game". Try to project my credit needs for the next few years and then make the correct choices to get me where I want to go.

am90
 
Posts: 1
Joined: Mon Aug 22, 2011 9:08 pm
Location: Austin, Tx

Postby am90 » Mon Aug 22, 2011 9:20 pm

sticf wrote:Here are some of the things that I would consider:
Look for a "basic card" i.e. one with little or no rewards. Do you have an account with a local Credit Union? In my experience they are a bit easier to deal with for CC approvals.

You could also try contact Amex and see if you qualify for any other cards using the same application as the Blue Cash Preferred.

Think about a secured credit card. While not always the optimal way to proceed. It does however, get you a seat at the table.

As to your second question:
Yes it will affect your credit score. However, there is no way to get credit without them doing hard credit checks. At this point it is going to be more important you establish credit than worry about 3-4 "hard pulls". Remember that these inquiries are a small section of the score (~10%), and they fall off quick (~2 years). I try to always think about credit as a "long game". Try to project my credit needs for the next few years and then make the correct choices to get me where I want to go.



I found this response really informative as I'm more or less in the same situation as OP. I talked to my banker after I got denied for Chase freedom, and due to the fact that I don't really have any credit history as a student, he suggested I look in to a Secured Credit Card and keep up with my payments for at least 6 months until I start to get offers from other Credit card companies and then try to reapply for Chase.

Is this the best route?

I don't mind the wait, and I just want to build my credit score and hopefully apply for a solid card with some nice rewards somewhere down the road.

I was looking at this link:
Secured Credit Cards To Rebuild Credit

and am contemplating the Orchard Bank Visa card.

any thoughts or feedback would be great!

sorry for the threadjack X_x

sticf
Centurion Member
Centurion Member
 
Posts: 132
Joined: Mon Jul 18, 2011 10:08 pm
Location: Houston

Postby sticf » Tue Aug 23, 2011 6:05 am

am90,
If you are currently a student you could look into a student card. These cards are build with lower initial requirements (income, credit history, etc.) but still have some great benefits.
College Students Cards

From talking to some friends and their children is it easier to establish credit as a student than to wait until you graduate. This seems a bit counter intuitive, but that is the "vibe" I am getting from several of them.

Hope it helps.



Return to “Rewards”

Who is online

Users browsing this forum: No registered users and 2 guests