Open a 4th CC in 6 months

[Anonymous]

Hi, I currently have an unsecured CC from Bank of America for $900, and two secured from Citi and Discover.

These are my first credit cards, and I applied for three in order to expedite the process of credit building.

I had no intention to maintain the two secured CCs for a very long time, maybe for a year, until my credit score becomes goood enough to open up different unsecured CCs.

Today, I received a letter with invitation number from Chase for its Freedom Unlimited CC.

I do not think this guarantees my approval for the card, but on "Terms & Conditions" sheet in the mail, there is a section which talks about "Notice About this Pre-Approved Offer." Further reading suggests that the words "Pre-Approved" and "Prescreened" are used interchangeablly. And the offer has an expiration date as well, so I am guessing this particular mail was not sent out randomly, but rather, sent to people who have at least passed a few criteria that Chase had access to without hard inquiry and deemed necessary. 

Anyhow, my question is should I apply for this card given the number of credit cards I have acquired in the past half a year?

If I do get approved for the Freedom Unlimited, I am going to close an account from either Citi or Discover, probably Citi since it has zero benefits.

Also, if there is anything you can share with someone who has just begun building credit, I will appreciate it very much.

Thanks

[austinguy907]

If you see OPT-OUT anywhere on the front or back of the paper then that means they're targeting your profile for acceptance.  Depending on your profile though it may/not approve when you actually apply.  If your cards are at least 6-12 months old then your chances are better. If you can get the limit up to $5K on one of them before applying you will be happier than less than that amount when applying.  Chase tends to match CL's when you apply and nail you with a HP when you want a CLI.  

Personally I wouldn't but that's because I've already played the games with Chase over the past 10 years.  Others around here will just about pay you to apply though.

[Anonymous]

Thank you @hbwel
For asking for guidance BEFORE going all Willy nilly

I'm guiding my 18 and 21 y.o. through the beginning stages right now as well and I LOVE it when new-to-it folks go in with a PLAN and not just Fire, Ready them Aim
So kudos for seeking advice upfront ( can you see the tear in my eye😂, that's Pride)

Anyway as your stated goal is profile expedition
You are ABSOLUTELY fine right now

You've got the ideal 3 revolving accounts as the scoring model desires, there is no NEED to acquire or answer Chase's advances.
(Btw Chase is chasing apps, just like any biz should and you're 100% correct. Vendors buy a bunch of prescreened profiles in BULK, profiles that vendors guess may have a better chance of approval and MORE so folks more likely to RESPOND to the overture. Remember prospecting cost $$ and the marketing department wants to meet their app goals, so they REACH and entice apps for app sake...doesn't make it the best idea for you, personally.
As mentioned, sometimes it's better to chill grow your profile so that when you do app with a place like Chase you get invited UPSTAIRS vs being stuck in a lower tier.

As for dumping your secured cards prematurely
ABSOLUTELY NOT
Danger DANGER in that thought pattern
Yeah I the idea of the $ sitting there burns a whole I'm sensibilities but grown ups should always have funds in savings anyway

That money sitting around for another 6-9 months ain't gonna kill you (& if it does we've got bigger problems, friend)

Point being you said, there's no benefit but you couldn't be more wrong, you BOUGHT your way to the bug time if you show patience and parlay the game just right.

As mentioned the scoring model doesn't give a ish whether the account is secured or not, it sees 3 accounts AGING together... that's HISTORY being built as we speak!

That's HPs aging off together vs running NEW HP's
Discover is somebody you're gonna WANT in your wallet, why in the world would you close that card early, when in a few months they'll send you back your deposit and give you an unsecured CL

And the AGE of the account remains intact

These 3 cards you have from great vendors will serve as your OLDEST accounts
BoA
Citi
Discover
All are pretty girls, you don't have ugly ducklings like Credit One or First Premier that you need to push out of the car before somebody SEES you.

I know for sure the Disco card graduates and you keep the same account history cant vouch 100% for Citi (someone will weigh in) but for sure Disco will unsecure your account around the 1 year mark ( a little less or a little more) ZERO reason to kill that card

You're building credit history AND relationships that can pay dividends for a lifetime
All 3 vendors you have now are banks
They lend money
Offer chk / sav accounts
Loans
IRAs
All kinds of ish you might need later
Home loans, car loans, Refi loans

Let Chase and the others wait till your file grows up big N strong b4 you start chipping away at it's growth for no real upside gain at this point in time.

An installment loan ( even the secured 'toy' loan) would be the only addition to your profile that would actually add value vs dilution at this point due to the model craving diversity or 'credit mix' ...in addition to age.

Again
3 revolving
1 install accounts is BEAUTIFUL
The only other thing to add is responsible use and TIME, period.

After that you're freaking golden.

(Obviously the model would like a graded mortgage but we don't pull those out of hats)

Good Luck
Let those accounts AGE a year, then 2 and you will be shot calling and taking names, with the vendors on your team I wouldn't dilute anything right now.
Trust neither Disco nor Citi us gonna run off with your little deposit but having those accounts are PRICELESS at feeding good juju to your credit profile.

I hereby FORBID you from closing them early, it's a foolish move...ok I can't send you to bed without dinner either, just saying it's a bad idea😃

Best to you!

[austinguy907]

Gemini - great response though a little long winded than most of us would venture into.  Key points though are well noted with no dumping, tend to them in the garden and let them blossom.  Disco starts low but grows strong.  I can't recall too many people getting a Citi Secured though either and can't speak to them converting either.  Disco has a new policy where they start reviewing now at month 7.  Cap1 even has tendered proof of conveting from another post recently they sent an e-mail to someone saying they could upgrade from secured unlike the old days when they never moved from that particular card to another level. 

[Anonymous]

I'm with you on Disco now looking at mo the 7 that's why I said a little b4 or after the 1 year mark (ppl get impatient, if you say maybe @ month 7, they hear MONTH 7)

I just can't TRUST Cap-1 w/o LOTS of evidence
They said that the secured cards would be eligible for CLIs etc once they stopped allowing additional deposits....that was a YEAR ago come February and nothing!

I used to recommend the Cap-1 but now Disco is a 1st option IMO
Cap-1 cost 3 pulls and guarantees 3 more to gain an unsecured account with loss the age of the initial account.
Cap-1 can be a great addition to a rebuild but IMO until we see clear evidence they can't be considered a top choice as a secured card
No graduation
3 pulls
No CLIs
= No Bueno

[austinguy907]

Disco ranks #1 for secured for me as well after seeing some posiitive results around here even with the complaints from long timers converting right before they're about to call and close them.  Seeing them be more progressive with the 7 month policy change and then seeing them clearing out the backlog of secured cards makes for a brighter future on top of it all.

Here's the 1 link to the Cap1 graduating post - http://ficoforums.myfico.com/t5/Credit-Cards/NEWSFLASH-Capital-One-Secured-MC-graduation-possible/td...

I was under the impresion they did graduate but then I would get countered with they never graduate by several people and then this pops up with a screenshot of it all as proof.

[Anonymous]

Thank you so much Gemini101 for your thoughtful answer! I am very happy to get such a detailed response not just on the topic, but also regarding my situation as I am just laying the foundation for something that will last my lifetime. Like you have pointed out, I am very glad that I took the time to delve deeper into the subject before I pulled the trigger. 

I will adhere to your suggestions, and I am going to keep the three cards that I have now. From little I was dig out, it does seem like Citi graduates its secured CC customers, but after only comparatively a long time (~18 months). 

Frankly speaking, the reason I want unsecured cards is that the credit limits tend to be higher, or at least more than $400, my deposit amount for Citi and DIscover.This is a nuisance because I keep my utilization below 30%, usually in the 20% range, and that leaves me only about $100 on these cards each month. As a college student, my monthly spneding rarely exceeds $800 except for rent, and if all of my three cards offer CL of $900 each, I can put all of my expenditure on credit cards while enjoying a few perks like cash back. But like you said, patience is important and I believe it will pay dividends in the long term. 

Thank you so much again.

[Anonymous]

I have to agree with just keeping your 3 cards for now.

3 is enough to build a solid credit foundation moving forward, and a good start for someone rebuilding their credit. Having a bunch of cards can get out of hand if not properly managed, and when you are still in the early stages of building a strong profile it's much safer to stick with the magical 3 easily into the 700's.

Give those 3 some time, say another year or so with monthly use and keeping the balances pretty much at zero, and then take a look at where your scores are and what type of better rewards makes the most sense to  you. Good cards will still be around, don't worry

[austinguy907]

While unsecured lmits are higher due to the effort you put into getting them you have to start somewhere.  The most flexible of the secured cards which might help you is Discover and you can make a call and up the limit deposit to $2500 if you want to put the money in for more breathing room on using the card.  It takes time and being in school limits some of the options right now.  Even when things pick up speed on your reports w/o higher income they won't grow until you can support the payments with higher balances.  For a significant boost your parents could add you as an AU to their aged accounts and that will push things along quicker as well.  

[driftless]

I would check the Chase prequalified web page and if the same offer appears there, I would go for them.

I would absolutely close the two secured cards once I had two unsecured cards.  They have done all they can do to help you.