Hello MP, I just graduated w/ a new job and am starting to look to enter this fun game of yours. Obviously, I need to get a card that earns travel rewards so from reading everything the past few months I decided the Freedom + Sapphire Preferred combo would fit best for me. I've also learned from lurking flyer/cc sites that I should only apply for one Chase card at a time because they would instantly deny my second application (unless you call the recon line). So I would prefer the CSP over the Freedom first because of better benies. So here's my dilemma, I have bad credit the past few years in college. Current stats: Fico 685, 59% util rate, and 4 hard pulls last year (a few cc apps and a private student loan) with the latest one in December 2012. No delinquencies, no late payments, no collections, everything else is perfect since I started having credit 8 years ago. I currently have: Citi Thank you card $5000 CL Chase Slate $1000 CL BOA Gold $1000 CL Best Buy (Capital One bank) $1000 CL I just got my first big boy job starting approx $85-90K a year and I start working in about 4 weeks. Should I hold off on applying for a card until I start working and getting my util% down? Or should I go ahead and apply for one of the two? If so, you think I have a shot at the CSP? Or shoot for the "easier" Freedom first? Thanks all.
If you have a balance ... wait till you @ 0 debt. Then w/a credit score of 685 ... you might want to start w/the Freedom as it will be easier to get approved for. Also since you only have 1 card over $5k and a total credit limit of $8k you probably will not get approved for teh CSP as it's a Visa Sig and the minium for a visa sig is $5000. But first pay off your balance... else the rewards you "Earn" will actually just be rewards you paid for via the interest you owe on them.
Ideally you want to bring your debt down to $0 first because like edekba said, if you're carrying a balance and spending a rewards card, you're essentially paying for your rewards and those are some expensive rewards! But I have heard (read online) of some people with a balance who got approved for a Freedom Card.
Having a balance is not gonna make Chase Deny you a card (they might in fact approve it knowing that they'll earn money from you via interest, as long as its not too much and you are at risk of defaulting)
thanks for the responses. I know, i know I should bring my debt down first. Just wondering if I will get approved cause if you guys are for sure I wont, then I dont want another hard pull until I know for sure I can...
If you know ... and still want to try (even though you know you shouldn't); I would go for the Freedom.
If you are concerned, I would suggest getting a good footing in your new career and work to lower your debt and utilization. Then in...hold your breath....say 6 months, review your situation. Your debt should be lower, your utilization lower and hopefully your credit score will raise. In the mean time read, read, read. Make plans to go to a seminar in Tampa or Chicago . I am going to my first FTU in DC and can't wait to learn more! I truly believe in not jumping in this game head or feet first. Test the waters with a toe, then move in slowly.
Another thing I did when I started working is to request a credit line increase every 6 mos or as often as they allow. My Citi student card went from $500 to $20,000 in 18 months. Early on you can just tell them you are gainfully employed (make sure your account personal details are up to date), eventually you might have to send paystubs or W2s, but thats a simple fax. Higher credit lines will help with credit score/utilization and also allow you more bargaining power when applying for new cards.
All great advice. TravelBear, can I negotiate with you and say...3 months? LoL. I guess while i'm still a Padawan, I should learn to be patient to avoid the dark side. And once I get the util% down, i'll make sue to ask for a CLI. Thanks everyone.
util% != debt ... just for clarification. I'm sure most of us have a utilization %; its not 0. But the key is don't carry a balance. When a creditor reports "I'm OKAY" to the CRA it also shows the balance on the card the time they report it. Thus your utilization might always be high (esp if you have a low CL). The key thing is carrying debt ... and if you're paying off your debt every month & the utilization is still high, then do a CLI w/your existing lender. Milk that relationship.
I figured you would come back at 3 months which you could see a change in your score...then reassess!
Stay away from the Dark Side indeed. Learn from all the Jedi Knights and Jedi Masters here on milepoint, my friend.
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