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Interesting CC Application Predicament


jpfiggins
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So, I just turned 18 yesterday, and have been pretty interested in personal finance for a while, so naturally, opening a few credit cards once I was 18 was part of the plan. I have been (and still am) on a couple of my parents cards for a couple of years, and somehow, some of the details carried over to me, and when I checked my score for the first time yesterday, I was at 752. So, my plan of getting a few secured cards like the Discover It and Petal 1, were out the door, and I applied for the Citi Double Cash card, which I was automatically approved for. The problem was, I then tried to apply for the Chase Freedom Unlimited, since that was highly recommended, but got declined due to limited credit history (even though on the reports, my average account age is 8 years and 8 months, the oldest account being 22 years, and the credit usage only being 6%). So, my question is, where do I go from here? Do I attempt to apply for other cards like the Capitol One Savor? Or should I just stick with those two (or other) secured cards I mentioned? Any ideas?

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10 hours ago, jpfiggins said:

for the Citi Double Cash card, which I was automatically approved for.

 

Congratulations on getting a real card! What credit line were you approved for?

 

BTW, I trust that you are gainfully employed with the ability to pay for all your charges? (I only ask because I wasn't when I was in your situation and it caused some problems ☺️)

Edited by racer7949
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7 hours ago, racer7949 said:

 

Congratulations on getting a real card! What credit line were you approved for?

 

BTW, I trust that you are gainfully employed with the ability to pay for all your charges? (I only ask because I wasn't when I was in your situation and it caused some problems ☺️)

By credit line, I assume you're talking limit? (New to the lingo ;) ) If so, $3k, which I was super surprised about.

 

Yes, full time software developer :) 

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7 hours ago, jpfiggins said:

By credit line, I assume you're talking limit? (New to the lingo ;) ) If so, $3k, which I was super surprised about.

 

Yes, full time software developer :) 

 

:yahoo:Woo Hoo! Celebrate! You are doing great. Don’t rush it. Identify your goals, and research cards that will fit your goals. Apply judiciously over time. And continue to read Creditboards! 

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So, I just turned 18 yesterday, and have been pretty interested in personal finance for a while, so naturally, opening a few credit cards once I was 18 was part of the plan. I have been (and still am) on a couple of my parents cards for a couple of years, and somehow, some of the details carried over to me, and when I checked my score for the first time yesterday, I was at 752. So, my plan of getting a few secured cards like the Discover It and Petal 1, were out the door, and I applied for the Citi Double Cash card, which I was automatically approved for. The problem was, I then tried to apply for the Chase Freedom Unlimited, since that was highly recommended, but got declined due to limited credit history (even though on the reports, my average account age is 8 years and 8 months, the oldest account being 22 years, and the credit usage only being 6%). So, my question is, where do I go from here? Do I attempt to apply for other cards like the Capitol One Savor? Or should I just stick with those two (or other) secured cards I mentioned? Any ideas?

Having the authorized user tradelines helped you, but it's definitely a case of YMMV.

Not all credit card issuers give weight to authorized user accounts. I would try a CapOne, Discover or maybe a NFCU card and then use them responsibly until you build up your own history for a while. FNBO also gives weight to authorized user accounts and they have a pre-qualification site which seems to work quite well.


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18 hours ago, jpfiggins said:

The problem was, I then tried to apply for the Chase Freedom Unlimited, since that was highly recommended, but got declined due to limited credit history (even though on the reports, my average account age is 8 years and 8 months, the oldest account being 22 years

 

Each trade line will indicate whether it's your primary card or if you're an authorized user.  The latter would be a smaller factor in current credit decisions.

 

5 cards is ideal for FICO scoring, but take your time to get there.  The last thing you want is four cards you regret getting and will never use.  :)  

 

A flat 2% card like the one you had is a great foundational card.  Perhaps you could target a couple of the cards with rotating 5% categories. 

 

But whatever you do, get in the habit of paying in full every month and not paying exorbitant interest.  If you do credit correctly, it should make you money and not cost you.

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Wow - I wish I had the ability to go back and tell my 18 year old self how credit really works.

 

Age is important, so never close that Citi card.  Never charge more than you can afford to pay next month - I don't have an exact figure, but I'm sure I've paid well into the six figures mark cumulatively in interest to credit card companies in the 30+ years since I was 18.

 

Try to never have more than 25'ish percent of your credit line show up when the statement cuts.  Since you just have one card with a $3,000 limit, if you charge $1,000 be sure to go online and pay $250 or more before the statement cuts.  If you can, pay it to less than 5%.

 

Apply for a new card 2-3 times a year.  Make sure you have one each of the big 4 - MC/Visa/Discover/Amex.  Make sure you have one each from the big 4 - Citi/WF/BofA/Chase.  Ask for CLIs on a regular basis.

 

Good credit is a golden ticket.  Get and keep your scores above 760-780 and you can buy any house, any car, and pay much less in interest than most.

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11 hours ago, PotO said:

Not all credit card issuers give weight to authorized user accounts. I would try a CapOne, Discover or maybe a NFCU card and then use them responsibly until you build up your own history for a while. FNBO also gives weight to authorized user accounts and they have a pre-qualification site which seems to work quite well.

 

I checked my pre-qualification on Discover and FNBO, and both of them pushed me towards the secured cards, so I was iffy trying CapOne, since from what I understood, they triple-pulled, so if I didn't get approved, then I'd take a hit on my score (short term). Should I still give CapOne a shot, and if so the SavorOne card? Or is there another one from them that you recommend? Their pre-qualification tool of course doesn't include said SavorOne, but its recommendations were the Platinum, QuicksilverOne (the $39 annual fee version), and then the Quicksilver Secured. Obviously, those cards would be cards I'd never use, since I'm already getting better rewards with Citi, so the only real benefit is that I would have another line open.

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I checked my pre-qualification on Discover and FNBO, and both of them pushed me towards the secured cards, so I was iffy trying CapOne, since from what I understood, they triple-pulled, so if I didn't get approved, then I'd take a hit on my score (short term). Should I still give CapOne a shot, and if so the SavorOne card? Or is there another one from them that you recommend? Their pre-qualification tool of course doesn't include said SavorOne, but its recommendations were the Platinum, QuicksilverOne (the $39 annual fee version), and then the Quicksilver Secured. Obviously, those cards would be cards I'd never use, since I'm already getting better rewards with Citi, so the only real benefit is that I would have another line open.


To be honest, I'm not really sure where you should apply.

My son was in the exact same boat as you not too long ago and he went for a Citi and got approved. Then he went for a Discover secured, a Navy Federal Secured and a regular CapOne QuickSilver. He got all of them. The secured cards quickly unsecured after about 7 months. He applied for an AmEx and FNBO at the one-year mark and got instant approval.


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5 hours ago, PotO said:

My son was in the exact same boat as you not too long ago and he went for a Citi and got approved. Then he went for a Discover secured, a Navy Federal Secured and a regular CapOne QuickSilver. He got all of them. The secured cards quickly unsecured after about 7 months. He applied for an AmEx and FNBO at the one-year mark and got instant approval.

Thanks!

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Others have nailed the reality of being an AU not outweighing or overcoming the fact that they KNOW you just turned 18.  Thus, they KNOW you have little practical experience at handling credit. 

 

Thankfully you dodged the bullet of having a turd like Petal on your record.  Even more thankfully, you don't seem to be applying for something solely because they might approve you.  A bunch of crappy cards would STILL be a bunch of crappy cards. 

 

Avoid the annual fee cards unless there is some sort of benefit that allows you to extract AT LEAST the amount of the fee out of the card in the way of rewards. 

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5 hours ago, centex said:

Others have nailed the reality of being an AU not outweighing or overcoming the fact that they KNOW you just turned 18.  Thus, they KNOW you have little practical experience at handling credit. 

 

Thankfully you dodged the bullet of having a turd like Petal on your record.  Even more thankfully, you don't seem to be applying for something solely because they might approve you.  A bunch of crappy cards would STILL be a bunch of crappy cards. 

 

Avoid the annual fee cards unless there is some sort of benefit that allows you to extract AT LEAST the amount of the fee out of the card in the way of rewards. 

Yeah, it's very interesting seeing how the different companies are handling it.

 

That's one thing that I've definitely wanted to stay away from. I don't want to have a bunch of random cards with garbage rewards or annual fees.

 

I have yet to find a card with an annual fee that will be useful to me. I'm not opening a bunch of cards to spend the money, but more to build credit to build up to better cards. The small amount of rewards I'd be able to redeem just wouldn't be worth it to get 3-6% on something, when I have to pay $95+ a year for the card, compared to the 2% I can get for free from pretty much anyone, like Citi and Discover.

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5 hours ago, jpfiggins said:

Yeah, it's very interesting seeing how the different companies are handling it.

 

That's one thing that I've definitely wanted to stay away from. I don't want to have a bunch of random cards with garbage rewards or annual fees.

 

I have yet to find a card with an annual fee that will be useful to me. I'm not opening a bunch of cards to spend the money, but more to build credit to build up to better cards. The small amount of rewards I'd be able to redeem just wouldn't be worth it to get 3-6% on something, when I have to pay $95+ a year for the card, compared to the 2% I can get for free from pretty much anyone, like Citi and Discover.

You are 18.  It makes no sense to spend money on fees.  Period. 

 

At that age, work on the mix which algorithms also like.  got a local retailer you shop at regularly?  Get the card, take the benefits and keep the age.  I've kept Target for almost 20 years now because I shop there and the card gives me 5% off at the register.  Oh, they also ship to the house for free, often arriving the day after an order- this is really handy for things like cat litter.  Got a gas station you use frequently?  Get their card.  Some of them provide a dime per gallon (or more) at the pump, which is certainly beneficial if you are in a part of the country where a 30-50 mile drive to do something is nothing out of the ordinary.

 

As you get out of college, the rest will come organically as you have meaningful income to be reported.

 

Just don't saddle yourself with a bunch of turds... 

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On 11/1/2021 at 11:27 AM, jpfiggins said:

So, I just turned 18 yesterday, and have been pretty interested in personal finance for a while, so naturally, opening a few credit cards once I was 18 was part of the plan. I have been (and still am) on a couple of my parents cards for a couple of years, and somehow, some of the details carried over to me, and when I checked my score for the first time yesterday, I was at 752. So, my plan of getting a few secured cards like the Discover It and Petal 1, were out the door, and I applied for the Citi Double Cash card, which I was automatically approved for. The problem was, I then tried to apply for the Chase Freedom Unlimited, since that was highly recommended, but got declined due to limited credit history (even though on the reports, my average account age is 8 years and 8 months, the oldest account being 22 years, and the credit usage only being 6%). So, my question is, where do I go from here? Do I attempt to apply for other cards like the Capitol One Savor? Or should I just stick with those two (or other) secured cards I mentioned? Any ideas?

 

Congrats on the prime card approval.  It sets the stage for a very healthy credit profile at an early age.

 

I suggest simply using the Citi card for 6 months with no other credit acquisition activity for now.  Build your credit profile with care now and you'll soon find that you can successfully tap any credit that serves your needs.  Use the Citi card each month, attempt to limit your statement balance to no more than $1000 of the approved $3k (capping your reported balance to 30% is preferred; you should find yourself eligible for respectable CL increases at 6 mo intervals), and pay in full after the statement cut.

 

At the 6 month mark, reach out and apply for 2 more cards that offer unique value.  As suggested by @cv91915, a card that has 3% (or even 5%) cashback on a spend category that benefits you would make a great target.  Among strong candidates, Citi Custom Cash is a great companion to Double Cash.  Bank of America Customized Cash Rewards is another.

 

You have your head on straight where it comes to cards with annual fees.  Typically, it takes $10k-$20k annual spend on a card that assesses an annual fee for the rewards to be sufficient to offset the fee cost.

 

For the time being, target cards that pose sufficient incentive to use them actively.  Credit lines grow with use; unused cards typically stagnate and become dead weight.

 

Two years down the road, having firmed up a respectable base credit history through the use of 4 or more cards, it becomes rational and attractive to start targeting new cards with fat new cardholder bonuses.  With that "base history" in place, you can now afford to take on a card solely for the stake of a large bonus, even if it means relegating the card to your "sock drawer" once you've earned the payout.

 

 

 

 

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