Credit Cards for Building Credit

[Morganne]

Hello, I am currently trying to build my credit for the first time. I went through college on a full scholarship with a mother who had buried herself in credit card debt and was anti-credit cards, so I never even thought about opening a credit card. Now I'm 26 and realizing how tough it is to build credit when you have 0 history. In March I got the TD Bank Cash Rewards Visa (a secured card), and opened it with $500 since that's all I had on hand at that time, having been told by the banker that I could increase it. A $500 limit really isn't enough for what I'd like to use the card for since I don't want to max it out, but when I called credit services they told me the banker had been mistaken, I'm stuck with $500 on that card and cannot touch it. I'm now sort of wanting to get a new card and possibly just close that account to get that $500 back and cannot figure out which card would be the best for me to keep more long term.

In July I had an experian credit score of 651 after only 4 months of *any* history at all. I've now got the $500 secured card (since March) and a $400 store card (since July). I only work part time so my income is low, around 15,000,  (my fiance of 6 years pays the bills since he has a very good paying job,) but I'm assuming I can't claim his income, so really all I've got to go on is low income and 7 months of total history, so my options are limited. It's time I really focus on getting a good credit score since I'm eventually going to need a new car and once my fiance and I are married we'll be looking at buying a bigger house.

My question is what sorts of cards would be best for me? I'm ok with staying with the secured card route, I could put around 2,000 in a secured account (assuming I close the old one), but am lost with all the options and whether or not I will even be accepted. I sort of jumped in to the TD card since I bank there, but am wondering if there's something better, or if I should just close the $500 dollar account and open one with a higher limit. I also pay off my balance monthly so higher interest rates are ok, I had been looking at the amazon card since we shop there all the time, but I've read some places that they want more history than I've got.

I'd love any advice people can give me. Thanks!

[Creditaddict]

go to all the websites and check the pre-qual... you will probably qualify for at least a couple.

Capitalone

Citicards

Chase

discover

id pick 2 to apply for if you get offers from them. maybe even 3 if you got 3 offers to replace your secured card.

apply chase, citi, discover, capital one in order if you get offers from them

[Themanwhocan]

Don't close any cards at this time.

Don't get another Secured card.

Really, time is your ally here, the best advice would be to just use the cards a very mild amount and pay off in full each month. After the first card is a year old, you will most likely have a pretty good score in the low 700's. That would be the time to apply for a few cards. Right now, if you even get approved, you're looking at very low credit card limits.

Which store card did you get? you might be able to improve that credit limit at the 6 month mark.

[Creditaddict]

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@Themanwhocan wrote:

Don't close any cards at this time.

Don't get another Secured card.

Really, time is your ally here, the best advice would be to just use the cards a very mild amount and pay off in full each month. After the first card is a year old, you will most likely have a pretty good score in the low 700's. That would be the time to apply for a few cards. Right now, if you even get approved, you're looking at very low credit card limits.

Which store card did you get? you might be able to improve that credit limit at the 6 month mark.

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With only 2 INQ's and over 7 months history I disagree that 1. OP would only get small lines... anything over $1k or $2k will be huge compared to what they have and will grow with some of the banks I suggested very easily. and 2. if the apps are not successful a couple INQ's won't hurt and OP said they can put $2k on secured card and then sit until next year... I might do that anyway, but I prefer to go unsecured ASAP and you qualify for some cards unsecured.

[09Lexie]

Basically, you have 2 new accounts with an AAOA of less than 6 mos. Before applying for anything, what kind of card are you looking for? Cash back? Rewards? What is your util on your current cc's?

[Themanwhocan]

I'd be surprised if Chase pre-qualified them for a card. I still can't get Chase to pre-qualify me for anything...

A certain database shows someone obtained a Sallie mae with a 654 score, so that and the Discover would seem reasonable possibilities at this time. I feel its better to wait a few months, but hey thats just me. I just think of how I had one secured card for 12 months, then applied in a US Bank and immediately recieved a $8,500 credit limit card. And US Bank gave me a $6,500 card 2.5 months later. Of course, I was banking with them for 4 years, just a pair of small checking accounts.

Of course, there is more than one way to build your set of credit cards

Good luck however you decide to proceed. For what its worth, either method can be made to work.

[09Lexie]

I agree Chase would be a stretch. Discover usually likes to be the first or they want a year. Barclays will probably be ok but waiting is almost always better. The inq's are not going to age together now anyway.

[Themanwhocan]

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@09Lexie wrote:
Basically, you have 2 new accounts with an AAOA of less than 6 mos. Before applying for anything, what kind of card are you looking for? Cash back? Rewards? What is your util on your current cc's?

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Just wanted to repost 09Lexie's questions. Especially what is the utilization on each of your current cards.

[Morganne]

Thanks so much for all the responses. Sorry I took so long to get back here, work ate me.

I also should have said this isn't something I'm going to jump on right now, just trying to do a bit of research in advance. I get my next free credit check next month through an identity theft program I have through work, and then I'll decide for sure if I'm opening something and when.

Anywho, I try not to have a balance of more than $100 onto my $500 secured card, although since TD takes forever to report I've gone up to $200 a time or two by mistake, although I don't think it reported that high because I made an early payment, I'd have to get back out my old statements for sure. My average reported balance is normally $50 or so.

The $400 store card I got was Old Navy. The highest balance I've had on that is $90 (although it's normally $20 or nothing).

As far as types of cards I'm flexible, although I do like the cash back on the TD card because I've managed to get back most of my yearly fee already, but the low limit is frustrating because even though I have that card I can't use it on any big purchases to take advantage of the cash back since I don't want to max it out. They preapproved me for up to $5,000 secured I just only had $500 at that time and they mistakenly told me I could up it later.

Thanks again!

[BearsAndTurtlesRtheBest]

Im assuming youve had Old Navy less than 4 months?