CSP vs. AMEX

[parakleet]

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@gh17 wrote:

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@clui78 wrote:

I think I'm leaning towards CSP as well. Is this too soon to apply though? 

I'm about 6-8 months history with 2 credit cards. EX 740. Income >50k. Current CL 6.4k. Bills paid every month. 

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How much spending will you be putting on the card per year, approximately?  And how much spending do you put on Chase?

To give a good answer, we need your spending level as well as how much you would be able to value a Chase UR point at.

Here's a chart someone gave me in another thread:

Redeemed for cash = 1:1

Travel through UR = 1:1.2

Southwest = 1:1.4

United domestic = 1:1.4 - 1.8

Hyatt = 1:1.8

I don't know the details about other airlines.  But it really depends on your spending.  As a made-up simple example, let's say you charge 18,000 a year (seems relatively reasonable at 50k income).  4000 is in Freedom 5x categories, 4000 is on travel, and 10,000 is on everything else.  And let's say you could value these points at 1.4 points per cent.

With the CSP and Freedom, you get 4000*.05*1.4+4000*.02*1.4+10,000*1.4-95=437.  With the Freedom and a Fidelity Amex, you'd get 4000*.05+14,000*.02=480.

But you might be at higher spending than that.  Or the Fidelity Amex might charge a foreign transaction fee, and I don't know how much you'd spend abroad.  Or you might be able to value the UR points a lot higher.

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The CSP is still worth getting for the first year for the bonus alone. The OP can decide whether or not the card is worth is afterwards.

[gh17]

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@parakleet wrote:

The CSP is still worth getting for the first year for the bonus alone. The OP can decide whether or not the card is worth is afterwards.

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That's true.  However, if it's not worth it, then the OP might still want a travel card down the line.  And opening new cards repeatedly generally isn't great for your account age.  I usually wouldn't advocate opening cards just for the sign-up bonus and would instead try to find cards you can keep long-term.  (Although to each his own.)

[longtimelurker]

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@gh17 wrote:

That's true.  However, if it's not worth it, then the OP might still want a travel card down the line.  And opening new cards repeatedly generally isn't great for your account age.  I usually wouldn't advocate opening cards just for the sign-up bonus and would instead try to find cards you can keep long-term.  (Although to each his own.)

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While  AAoA can be a concern, which is where Amex backdating and keeping a few no-AF cards can help, the other really does depend on personal preferences.   If you don't do MS, getting the sign-up bonus is by far the biggest part of your credit card return, and really should be at least considered.

And I don't know how (or why for that matter!) you can identify cards to keep long-term.   Credit card conditions are always subject to change, a great card can get nerfed to the point of near uselessness (happened to 2.5 of mine!) or better cards in the same space can come along.

As a very poor analogy, I wouldn't recommend that anyone should find a computer or smartphone to use for the next twenty years.   Yes, credit cards don't evolve at quite that rate, but good (and bad) changes do happen.

[ztnjpv]

parakleet wrote:

I think this is a mistake. Yes, the OP has a thin file but I think OP has a decent chance for the CSP right how. However, if op wants to increase his/her chances, I would say just wait another 6-12mos and build good history with his current cards and the OP would be fine. I do not think it's necessary to take out a loan and pay unnecessary interest just for the sake of building up a credit profile.

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Yes and no. I'm thinking about the entire credit profile not just the narrow aim of getting the CSP. A satisfactory loan paid in full is good for your report. It also proivides a little mix in terms of credit. It's not as beneficial as a mortgage but it's still part of a variety of credit. An auto loan will likely enter that mix as well in time. Moreover, the interest paid on a small loan (say $1000) over a 12 month term is absolutely miniscule and worth it IMO when trying to accelerate the building a of thicker profile, which is what I am suggesting here. 

Now, is this necessary to get from A to B? No. But it can be a good idea in the bigger picture. To call it  "a mistake" is a bit overzealous.

[ztnjpv]

lurker,

Agreed on the sentiment that cards are not forever and that people shouldn't view their worth over the long term. That being said, any no-AF card that meets a short to mid term desire or need in terms of interest rates or rewards is good enough to qualify. This is, of course, within reason and common sense. Moderation and good judgement  are implicit in any logic or rule of thumb. 

Cards in my lineup that have no AF are keepers. I will never close them regardless of how useful they may be in future. AF cards? Could be axed at any time when the fees outweigh any rewards. 

So, I think cards like the Freedom or Quicksilver or Discover it or BoA Cash rewards to name nationally popular mainstream rewards cards, are always good choices regardless of what the future may hold....ESPECIALLY if you are young and/or (re)building a credit file. They form a strong foundation for AAoA and never need to be closed for cost reasons. No fees. When a BBD comes along, you can sock drawer them or possibly convert them if you so choose. 

Having a no-fee Amex like Blue, BCE or Everyday is also a great app no matter what because of backdating. The inquiry fades but the Member Date does not. A no fee amex is your servant in strong credit....even if you never use it.  Getting a no fee Amex as soon as it is feasible is something I always suggest to people building or rebuilding. 

Anything beyond all that, I agree 100%. Cards like CSP, PRG, BCP and all the popular rewards cards with fees are never keepers. You use them as long as they suit you. They are expendable at any time for any reason.