Request a CLI or apply for a new card?

[Credit333]

Hi everyone, been reading this forum for a bit now, first time posting. Sorry, this is a long one, but I feel all the details are relevant...here are some cliffnotes if you don't want to read the whole thing:

- Have 4 cards, use 3 of them, and 1 of the ones I use (State Farm Rewards) has a low CL.

- Considering either asking for a large increase in CL on the SF Rewards or applying for a Chase Freedom, but worried that the low CLs I have will impact what Chase gives me.

- Is it worth waiting a week or two for it to have been 2 yrs since a prior hard inquiry, or will this be largely inconsequential?

- Unsure of how often I should be asking for CLIs anyway...never have, and don't know the hard inquiry vs. CLI tradeoff in FICO score.

Full situation:

Got a question...so, I'm 21 y/o and have had a credit history for 3-3.5 years. I have a State Farm Student card that I no longer use (first card, from 3-3.5 years ago, $1000 CL), as well as a State Farm Rewards card ($1500 CL), a Discover Open Road card ($3300 CL), and a Bank Americard ($3000 CL). I have never requested a CLI...the SF cards both came with their respective limits, the Discover card has been increased over time (started at $1500 or $2000, can't remember which), and the Bank Americard also came with the limit it currently has. All but the latter card were acquired between June and December of 2012.

I've seen my Experian and Equifax reports within the last year, and assuming nothing has changed (which it shouldn't have), I have hard inquiries (for the applications of those cards) set to be removed from my reports in early July and late August. I am planning to order a Transunion report in late July (I'm trying to order one every 4 months to have the best overall picture of where my credit sits). I've never missed a payment and never carried a balance. From what I've seen, and what Discover tells me on my monthly statements, I believe my score(s) should be somewhere in the 740 range, but I guess I wouldn't be surprised if other scores were lower.

So here is my question. As I stated above, I've never requested a CLI. I am considering doing one of two things:

a) Request a CLI on my SF Rewards card (to, say, $5000). This would obviously give me a much higher CL overall.

b) Apply for a Chase Freedom. This would give me a new card (I'd probably just retire my SF Visa, assuming I got approved), plus the $200 sign-up bonus.

The benefit, IMO, of requesting the CLI on my SF Rewards is that I would be showing to other banks that I am "worthy" of higher limits, especially since this is the lowest CL of cards that I use. This might give me some leverage moving forward (assuming I got the CLI from $1500 to $5000 or whatever), but not sure.  Applying for the Chase Freedom, which I'd hope/assume I'd get approved for, would also obviously increase my overall CL. But, I'm worried that having 2 cards with such low limits might cause Chase to give me a very low CL, which would be bad as well. Plus, CreditKarma has informed me that I shoudl be carrying MORE credit accounts...not sure what everyone's thoughts on that are.

So, what would you all suggest I do? Apply for the CLI on the SF Visa, or apply for a Chase Freedom? And, perhaps most importantly, should I wait a week or two until the hard inquiry I have from July 2012 falls off my report, or is this irrelevant?

Also, should I be requesting CLIs on my other cards (not the Discover, since they seem to give me regular increases anyway, but the Bank Americard, for example)? How often do you guys all request CLIs on your cards?

Thanks so much, and again, sorry for the length.

[coldnmn]

In my opinion. With so few inquiries I would go for the CLI. I also would see about a SP CLI and product change to the Discover IT card. After they reports then apply for the Freedom.  I also would consider applying for the AMEX everyday card. That's assuming you have no baddings. Welcome to the forum and thanks for sharing.

[Credit333]

Hi coldnmn, thanks for the response.

The way you said that, I almost get the impression that I'd want to have MORE hard inquiries, but I thought that it was good to try and avoid those? So basically it's better to get the CLI than the new card? Should I be making hard inquiries / requesting CLIs frequently?

Also, any reason that for Discover, you'd recommend the IT over the Open Road card? I get 2% rewards on restaurants with the Open Road and 1% everything else, so I feel like that's probably better than a rotating 5% on the Open Road...plus, I already get 3% on gas with my Bank Americard. But if there are other differences, I'd be interested.

On a similar note, any reason in particular I should apply for the AmEx Everyday?

[coldnmn]

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@Credit333 wrote:

Hi coldnmn, thanks for the response.

The way you said that, I almost get the impression that I'd want to have MORE hard inquiries, but I thought that it was good to try and avoid those? So basically it's better to get the CLI than the new card? Should I be making hard inquiries / requesting CLIs frequently?

Also, any reason that for Discover, you'd recommend the IT over the Open Road card? I get 2% rewards on restaurants with the Open Road and 1% everything else, so I feel like that's probably better than a rotating 5% on the Open Road...plus, I already get 3% on gas with my Bank Americard. But if there are other differences, I'd be interested.

On a similar note, any reason in particular I should apply for the AmEx Everyday?

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I'm saying try for a SP CLI with Discover it seems most like the Discover IT. If your current card works for you best great. My suggestion of the AMEX is for backdating of any future cards you may get from AMEX. The ED seems to be fairly easy to get approved for and seems to be a good rewards card. It just seemed your credit file could take the hit. If you don't then apply for what you think best.

[Credit333]

I went ahead and made the Discover conversion today, no inquiry required at all. Thanks for the tip. I just got an auto CLI from Discover last month, so I'm gonna wait for a bit on that (or just let them continualy increase it automatically).

A few quick things:

1) Can you explain the AmEx backdating thing and why it's important?

2) Would applying for a Chase Freedom right now be a good move?

3) How often would you deem it "okay" to request a CLI? For example, I would really like to on my SF Visa (which I've had for 2 years and is still sitting at $1500), but if I'm going to be applying for 1-2 more cards (possibly Chase Freedom or AmEx or both), idk if this would be a wise time. Or maybe it's irrelevant, idk.

Thanks so much!

[MidnightJester]

If you can, I feel the SP Self initaited CLI with Discover is better then Discover Auto-CLI. You can ask for more and get the maximum counter offer.

[Credit333]

Jester,

I can see how that would make sense, but in order to do that, I'd have to request another CLI within 3 months (since they just keep increasing mine every 3 months). Wouldn't this reflect negatively on my credit report, even if just a SP? That's what the Discover rep told me at least.

[coldnmn]

This is an example say you got an AMEX in Dec 2014 your member since date would be 12 the month you got the card and 2014 the year you got the card so member since date 12/2014. So now it's Jan 2015 and you get another AMEX card 1 the month you got the card 14 the year you became a member. So your member since date would be 1/2014. So even though the second card is a month newer, in your credit report shows it's older. Then a year later you decide to get another card in Feb 2016 that card would show member since 2/2014. 2 Feb the month you applied 2014 the year you became a member. Again appearing to be older then your first card 2/2014. I think you would get the Freedom but be sure your CLI shows. It seems larger limits get larger limits.

[coldnmn]

If your wondering why I don't have AMEX. I live in northern mn and I would have to drive 45 miles to use it. My small town nobody takes AMEX. I only apply for cards I need for rewards etc. I never apply for cards that I want but don't need.

[Credit333]

Thank you, that was actually very helpful! Is this something that only occurs with AmEx, or is backdating something with all cards?

Also, could you address my other question:

How often would you deem it "okay" to request a CLI? For example, I would really like to on my SF Visa (which I've had for 2 years and is still sitting at $1500), but if I'm going to be applying for 1-2 more cards (possibly Chase Freedom or AmEx or both), idk if this would be a wise time. Or maybe it's irrelevant, idk.

Much appreciated.