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New To Credit Cards, HELP!/ What card should I get?

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800who
Regular Contributor

New To Credit Cards, HELP!/ What card should I get?

I turned 18 in July and applied for a Discover IT card and by September I was approved with a $2500 CL. I've made consistent payments on it since and just in March I got an auto loan, I do believe I am going in the right direction with my credit. My score was 732 EXP 737 TU when I applied for the auto loan. My discover card has a year of 0% APR and once the year is up I don't want to pay interest so I wanted to get rid of it, but I don't want to negatively affect my score. What route should I take at this point as far as credit and my credit cards. EDIT~~~~~~ now would it be too early to apply for a second card? I like the chase freedom card, I applied for amex blue cash a month or so back and got declined. Opinions?

Message 1 of 7
6 REPLIES 6
elim
Senior Contributor

Re: New To Credit Cards, HELP!

Welcome!  You are kicking butt at a young age, congrats.

 

Absolutely keep the card. Just because you have (and use) a credit card, doesn't mean you will ever pay interest. Use the card for daily spend and pay it in full before the due date, harvesting any rewards, while adding another green mark on your reports. Long positive payment history builds great credit scores. Some say minimum of 3 revolving accounts is best.

Message 2 of 7
Anonymous
Not applicable

Re: New To Credit Cards, HELP!

There is no way to close the account without adversely affecting your score. If that is your first and only credit card it is imperative to your AAoA.

I am also currently using the promotion with Disco. After your promotion is up you can call them and request an additional 12 months or an APR reduction. That is exactly what I plan to do and others from this forum have had success in doing so. You need to keep in mind that you almost always will incur interest if you are carrying balances. If you pay in full each month, as you should, you will never have to worry about interest.

As for building your credit from here -
If you have never requested a CLI from Discover: make sure you have a balance of under $225 reporting (9 percent) and hit the Love button.
Consider applying for two additional cards as 3 rotational credit lines and one installment is optimal for building your score. I would try to stick with no AF cards if you do not have a very high income to support it or the spending to justify it. Go with cards that have rewards categories you will use such as Marvel for Entertainment or AARP for Dining/Gas. Consider establishing a relationship with Chase while you're under 5/24.
Message 3 of 7
HeavenOhio
Senior Contributor

Re: New To Credit Cards, HELP!

It looks like you're doing great at this point.

 

Yeah, three revolving accounts is good. The reason for that is that FICO likes to see less than half of your cards reporting a balance, and it takes three to be able to achieve less than half. More than three is fine too. There's no need to rush, though.

 

Your scores are in good shape for you to be able to be choosy. The main thing is to do your homework, and this forum is a great place to do it. Some cards are likely to be available to you right now. Others may require more history. And some may have starting limits that are out of your reach for the time being. What you don't want to do is grab cards just because they're there.

 

When you decide to apply, absolutely make sure that you're in a good position to meet the minimum spending requirements for sign-up bonuses. You don't want to invent reasons to spend. If I were in your position, I'd think about looking for a card in September. That'll allow you to maximize Discover's first-year reward bonus.

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AverageJoesCredit
Legendary Contributor

Re: New To Credit Cards, HELP!

18 with a Discover with a $2500 limit that will grow, you own the world haha! Im__,lol, finally got a Discover at same sl that took forever to get and wishing i was 18 againSmiley Wink.

Definetely let that card grow with you, imagine where youll be in 10 years lol. Like stated above paying no interest is a choice not the credit card. Enjoy your journey. Slow and steady. Best of luckSmiley Happy
Message 5 of 7
JustcallmeTM
Regular Contributor

Re: New To Credit Cards, HELP!


@800who wrote:

I turned 18 in July and applied for a Discover IT card and by September I was approved with a $2500 CL. I've made consistent payments on it since and just in March I got an auto loan, I do believe I am going in the right direction with my credit. My score was 732 EXP 737 TU when I applied for the auto loan. My discover card has a year of 0% APR and once the year is up I don't want to pay interest so I wanted to get rid of it, but I don't want to negatively affect my score. What route should I take at this point as far as credit and my credit cards.


Don't close Discover just let the card grow it's actually one of the better cards to have for a young person starting. Discover is good at handing out 0% apr for an additional 12 months or dropping the APR into the single digit.

 

Look for a local CU or one of the main ones people use like NFCU/PenFed/DCU etc.

Message 6 of 7
HeavenOhio
Senior Contributor

Re: New To Credit Cards, HELP!


@800who wrote:

My discover card has a year of 0% APR and once the year is up I don't want to pay interest so I wanted to get rid of it, but I don't want to negatively affect my score.


I missed this. You don't have to pay interest. Simply pay your full statement balance each month. That should be the standard MO with any card.

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