Advice for a Friend to Apply

Anonymous · ‎01-04-2016

Hi, there. I had a friend ask me for advice about credit, as she's interested in applying for a few. What I know is that her oldest 'account' is her first student loan about 5 years ago, and in terms of revolving accounts, she only has a Wells Fargo CC (was a $800 student card, which graduated to a platinum at $1100 around the time when she herself graduated). 100% payment history, no derogs ever, and no inquiries.

She wanted to have a card mainly for rewards, because she PIF, so APR is irrelevant to her. She really wants an Amex Blue Cash Everyday for groceries, and was interested in a card with no FTF for occasional travel, although she didn't seem so interested in a travel card because she doesn't travel often. She also wanted a category 5% card like the Discover IT or the Chase Freedom. She did not want a card with an AF.

Together (me suggesting and her looking at the benefits and terms), I think we came to the understanding that the cards she should look to apply for would be the Amex Blue Cash Everyday, the Discover IT, and finally the Capital One Quicksilver (for a no FTF, general cash-back at 1 5% as opposed to 1%). She wants to apply for all three at once. She appears happy with this idea, but I thought maybe to ask people more well-versed in this than myself. I told her, in the meantime, to check if she had prequals with Amex and Capital One.

Does this sound like a good idea? In that case, which should she apply for first? She asked what order she should apply, and I was a bit unsure. I think perhaps Quicksilver would be last, in order for Amex to have an inquiry-less EX to consider, since CapOne does 3 pulls. Perhaps Amex first, then Discover, then CapOne?

Are we overthinking this? I just want to make sure I give my friend the best advice I can. Thanks, guys!

LadyJEsq · ‎01-04-2016

Since she has no inquires, she can apply in any order she likes. I think the CCs you've identified will suit her needs nicely. You're a good friend FYI.

Good luck!

**FICO 8 Scores EQ EX TU **

OmarGB9 · ‎01-04-2016

I think she's good go, and that's a solid lineup of cards.

Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:

Current FICO 8 scores:

DU556 · ‎01-05-2016

Does her grocery store accept credit cards? The Amex would be a great choice, i told me wife to apply for it a few weeks ago and was approved for 3X limit increase right away. Do not get the Amex everyday points card, the Discover miles card is better. Remind her that any miles she gets with the Discover card she can use to pay at checkout on Amazon. I currently have $211 worth of miles from Discover.

Anonymous · ‎01-05-2016

Those are the exact cards I was going to recommend. However, remember that the BCE (& BCP) only work at supermarkets. Farmers markets, Target, Walmart, and similar groceries + department style stores won't count for the bonus. Additionally, if she spends more than about $200 per month on groceries, the BCP becomes the better deal, even taking the AF into account.

Here are Themanwhocan charts. I find them very helpful for decisions like this.

http://ficoforums.myfico.com/t5/Credit-Cards/Cash-Back-credit-card-charts/td-p/4004725

takeshi74 · ‎01-05-2016

@Anonymous wrote:
She really wants an Amex Blue Cash Everyday for groceries

Has she actually run the numbers for her spend to determine that the BCE is the best fit for her grocery spend? Don't skip the BCP just because of AF. Run the numbers and consider total cost/benefit.

@Anonymous wrote:
although she didn't seem so interested in a travel card because she doesn't travel often.

Wanting to travel and frequency doesn't really determine the fit of a travel card. Again, it comes down to spend but with miles/points cards one also has to consider how the redemption methods that the person will use will impact rewards value. There are plenty of people that want to travel that have spend better suited to cash back cards.

@Anonymous wrote:
She did not want a card with an AF.

Again, do not simply consider AF. Consider total cost/benefit. Run the numbers. If I avoided all cards with AF's I'd have very little in the way of rewards. I'm not saying that's going to be the case for her but she won't know without doing her due diligence.

If rewards are a priority then she really should start with her major spend categories (including noncategory) and find cards that maximize rewads on those categories. Don't just pick cards based on their earn rates. If she wants to consider the 5% rotators like the Discover it and Chase Freedom then she should look at the calendars and see if the cateogories suit her. They can change from year to year but that's really all she can go on.

@Anonymous wrote:
and finally the Capital One Quicksilver (for a no FTF, general cash-back at 1 5% as opposed to 1%).

How much in dollars is 1% of her noncategory spend versus 1.5% or even 1%+1% (Citi Double Cash)?

@DU556 wrote:
Do not get the Amex everyday points card, the Discover miles card is better

Better is always highly subjective, regardless of topic. These are not univesal matters. One needs to start with one's needs/wants and use that to find cards that suit the individual. For rewards on spend one needs to consider one's spend. The Everday may be better for one, the Everyday Preferred may be better for the next and the Discover miles may be better for yet another person. None of them may be best for yet another person. None of them are suited to me. It's not simply a matter of the card itself.

@Anonymous wrote:
Are we overthinking this?

Not at all but there are other considerations.

With her thin profile she may be limited in what she can apply for. Prioritize the list and apply for the most important card to her first in case the rest are denied.

longtimelurker · ‎01-05-2016

@DU556 wrote:
Does her grocery store accept credit cards? The Amex would be a great choice, i told me wife to apply for it a few weeks ago and was approved for 3X limit increase right away. Do not get the Amex everyday points card, the Discover miles card is better. Remind her that any miles she gets with the Discover card she can use to pay at checkout on Amazon. I currently have $211 worth of miles from Discover.

If you can transfer MR points, the ED (or EDP) is going to be better than the miles card, and certainly after the first year. Also, since the Miles card makes it so easy to redeem into a bank account, not sure why you would use points on Amazon rather than paying with another credit card (and getting rewards from that) and using the redeemed miles to pay the bill.

aubie1kenobie2 · ‎01-05-2016

I love my Amex BCE and now my DIscover too (I didn't used to use it as much because of a low CL back then). They are great cards for cash back. They won't be accepted anywhere though, unlike Visa/MC so I have another card for those situations. I also got my Discover and Amex BCE at almost the same time period. It took a hit to my AAoA and score but now they are both more than 2 years old.

Starting Score: No credit history in July 2013, 663 in August (lender pulled)
Current Score: 773 (Discover FICO), 749 (DCU EQ)
Ultimate goal: Buy a house in 2016!

Anonymous · ‎01-06-2016

I've talked it over with her. She ran the numbers, and in the end, the BCE was the better choice over the BCP. She also took a look at what Discover had done in the previous years (in terms of categories), and felt it fit her lifestyle. She also did prequals and she's prequalified for both the BCE and Quicksilver (and not the highest APR either!), so she is planning to apply once her statement generates. I let her know to apply in order of priority.

I'll keep you guys updated. Thanks so much for the help! I can always count on you guys for advice.