I recently graduated from college, and started my first full-time job about a month ago. I currently have a couple credit cards. The first is a BofA Visa Signature Cash Rewards card. This is actually my mom's card (she added me as an AU when I was 16 so I could start building a credit history). I never use this card since my mom is the one who controls / pays for it. In addition, it does not report a CL since it’s a BofA siggy; so, it's not very useful for reducing my total debt utilization. I also have a Discover More card in my name that I received a couple years ago. The original CL was $500, but it is now $4250 due to auto CLI luv and one CLI request.
I currently put almost all of my purchases on my debit card in order to keep my debt utilization low and PIF each month so that I never have to pay interest. I would like to apply for a couple prime cards soon in order to maximize rewards while keeping my util low. I would also ideally like cards that will grow with me. I am pretty sure that I am going to apply for the AMEX BCP to get the 6% back on groceries. I am also considering the Chase Freedom. However, I am a little worried that I will get a $500 CL that will never increase (making the card practically worthless if I want to keep util under 10%). I'm a little concerned about this since I only have a couple cards, and my understanding is that Chase likes to see both a long credit history and at least a few Visa/MC/Discover with high CLs. Would it be better to just apply for the Freedom now along with the BCP so that both INQs fall off at the same time or wait a couple years and apply for the Chase Freedom then when the AMEX has a decent limit and my credit history is longer? Or does anyone have any suggestions for a better CC for me? My info is below.
AAoA: 4.2 years
Length of Credit History: 6.4 years
Other Info: No baddies and 1 INQ
First up - nice history, really responsible use of credit, congratulations.
Both the Chase Freedom and the AMEX BCP are nice cards, and give your scores I reckon you will be ok (typically both pull EX, depending on your location). To maximize rewards you will want to stop using your debit card, and put everything through credit - pay down during the month if you want to keep util low, but remember util only really matters before applying if paying in full (i.e. avoiding interest)
Based on the AAoA, income, your current Discover limit, and good utilization/payment history both Chase and AMEX are probably going to like you.
I would be incredibly surprised if you got a $500 Freedom limit. In fact I would be downright shocked. With your other CLs I would expect something between 2.5-3k, as they want to get decent usage out of you. Chase likes heavy usage - put everything through it, pay in full and they will love you (this seems to be where people get auto CLI - gradual but nice). Consider even paying down during the month. If you would really like a signature Freedom though, I would suggest perhaps doing the following.
Apply for the AMEX BCP - use the CLI at 61days 3x to get a limit above 5k if you don't get an initial line above that (you will probably get 2-4k at a guess, but YMMV). Allow it to report for a month or two, then apply for the Freedom. AMEX also seems to like alot of swipes, so use the card plenty, but keep your Util low if possible.
If you want both immediately, and don't want to wait (and want accounts to age together), then apply for the BCP the same day. You can always ask for a CLI to signature level from Chase once you have the BCP up into high CLs.
keep us updated if u apply!
Thanks everyone! I will update when I apply.
tornadoguy mentioned that I should run all of my expenses through my CCs but still keep util low by possibly paying before the statement posts. Does a CC company know that you are heavily using their card even if you pay down the bill before the statement posts or do they simply look at your statement balance? If they do know about intra-statement usage, is heavily using but paying down early seen as a positive or negative (positive because you are using their card, negative because your effective util is higher than reported by the CRA)?
i know in the past for my BOA 123 card even though i pay it down to like 35-50 for that to post on statement, once reported to CB it will show High Balance which is what i passed through it for the month. So i think CC's will know if your using it heavily.
Someone correct me if im wrong.
They know exactly how much is going through your card - one of the ways they make money out of credit cards is charging merchants for each swipe made by customers (in addition to the usual interest that they charge users). However, util only shows up for other credit card companies, so even if you are heavily using one particular card, other credit card companies will not be aware unless you allow large balances to post. If you check out your credit card statement (well at least Freedom statement I have), it has total charges, total payments - which I suspect is one of the metrics they look at when assessing your credit limit and usage, along with number of transactions you make on the card.
My guess is that they view that you are having to pay down during the statement suggests that you potentially need a greater credit limit, but actually working out how individual lenders view it seems to be a case of YMMV. If you look through nearly all recent threads from AMEX BCP and Freedom, those who have got auto CLIs have reported heavy usage but responsible Util.
In terms of rewards, using it for everything in the right categories seems to be the best way to maximise your bang for buck as you are getting a percentage return on money put through the cards.
I just wanted to provide a quick update to you guys. A couple weeks ago I figured out that my credit scores are higher than I initially reported. The ones I reported were directly from equifax. However, I signed up for scorewatch on myfico and saw that my EQ fico was 797. I then apped for AMEX BCP and was approved with a $10,000 CL. When I received my card, it indicated that my EX was 788. So, I guess that myfico had the correct scores and not Equifax. I'm not sure why there was such a large discrepency between Equifax and myfico, but I guess Equifax was giving me FAKOs.
I am going to wait a couple months to do an AMEX auto CLI to a little over $20,000. I will then probably app for either the Chase Freedom or CSP. I'm hoping that this combo of cards will allow me to maximize rewards.