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Valued Contributor
trumpet-205
Posts: 2,505
Registered: ‎11-11-2010
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Re: Starting out!


jamie123 wrote:

I would keep it open for 3 to 4 years. It will add to your average age of accounts which is a part of your FICO score. That's one reason you don't want to apply for JUNK cards. Once they are open it becomes a hard decision on if you should close them. That's why you want to stay away from store cards except for Walmart.


You can close it whenever you feel like it. A closed account stays on your CR for 10 years before being deleted, and does contribute toward AAoA.

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Rackham12
Posts: 55
Registered: ‎07-13-2012
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Re: Starting out!

Why is Walmart so valued ? I keep seeing it on peoples sigs

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DaveSignal
Posts: 2,111
Registered: ‎07-29-2011
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Re: Starting out!


trumpet-205 wrote:

jamie123 wrote:

I would keep it open for 3 to 4 years. It will add to your average age of accounts which is a part of your FICO score. That's one reason you don't want to apply for JUNK cards. Once they are open it becomes a hard decision on if you should close them. That's why you want to stay away from store cards except for Walmart.


You can close it whenever you feel like it. A closed account stays on your CR for 10 years before being deleted, and does contribute toward AAoA.


+1   FICO calculates closed and open accounts exactly the same way for AAoA.  Closing an account does not hurt the FICO AAoA.

EX:694 TU:744 EQ:777
Amex ED $19.5k - BoA Travel Rewards $15k - CSP $5k - SDFCU EMV $15k - NFCU goRewards $20k - Barclays Arrival $6.5k
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DaveSignal
Posts: 2,111
Registered: ‎07-29-2011
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Re: Starting out!


Rackham12 wrote:

Why is Walmart so valued ? I keep seeing it on peoples sigs


Because you get free TU FICOs with a wal-mart card.

EX:694 TU:744 EQ:777
Amex ED $19.5k - BoA Travel Rewards $15k - CSP $5k - SDFCU EMV $15k - NFCU goRewards $20k - Barclays Arrival $6.5k
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jamie123
Posts: 927
Registered: ‎03-22-2012
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Re: Starting out!

Credit Unions are an awesome resource. THAT'S WHERE YOU SHOULD GET YOUR AUTO LOANS AND MORTGAGE FROM!

 

You need to establish a relationship with a local credit union next. I would stongly suggest that you NOT use a credit union for all your banking. Credit unions are different than banks in a few KEY areas that most people aren't aware of.

 

If this (God Forbid!) were ever to happen to you...

 

You default on a car loan you have with the credit union. They can freeze your accounts and take all your money! You are pretty much screwed at that point.



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CreditCrusader
Posts: 799
Registered: ‎09-27-2011
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Re: Starting out!


jamie123 wrote:

Credit Unions are an awesome resource. THAT'S WHERE YOU SHOULD GET YOUR AUTO LOANS AND MORTGAGE FROM!

 

You need to establish a relationship with a local credit union next. I would stongly suggest that you NOT use a credit union for all your banking. Credit unions are different than banks in a few KEY areas that most people aren't aware of.

 

If this (God Forbid!) were ever to happen to you...

 

You default on a car loan you have with the credit union. They can freeze your accounts and take all your money! You are pretty much screwed at that point.


I hate to break the news to you, Jamie...but banks are just as likely to offset money owed to them upon default. In fact, during my decades of experience with both banks and credit unions, it is my experience (YMMV) that credit unions are more likely to work with you after you build a solid relationship with them than banks. Banks seem far more motivated by the profit motive and are willing to suck as much money as possible out of you rather than help you as you get back on your feet.

I'm Spartacus!

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mistabgeez
Posts: 55
Registered: ‎06-27-2012
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Re: Starting out!


jamie123 wrote:

Credit Unions are an awesome resource. THAT'S WHERE YOU SHOULD GET YOUR AUTO LOANS AND MORTGAGE FROM!

 

You need to establish a relationship with a local credit union next. I would stongly suggest that you NOT use a credit union for all your banking. Credit unions are different than banks in a few KEY areas that most people aren't aware of.

 

If this (God Forbid!) were ever to happen to you...

 

You default on a car loan you have with the credit union. They can freeze your accounts and take all your money! You are pretty much screwed at that point.


I concur. My first credit card came from my credit union. They increased my limit from initial $500 to $2500 one year later. That card also has my lowest APR and they usually run 0% BT's once a year. By no means is it my primary card, but it serves its purpose when needed.  It is an asset that I would definitely suggest you utilize.

AMEX BCE $18,000 Citi Forward $6500 USAA $6000
Chase Freedom $2500 Discover It $4000
M & T Visa $2500 CU Visa $2500 Walmart $2200
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andyaycw
Posts: 298
Registered: ‎07-25-2007
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Re: Starting out!

OP, lots of great advice have been given so far. I'll add my advice into the mix for consideration also.

 

Since you've found this forum, I'll assume that you are financially responsible, have a good grip on finances, paying bills, only charging what you can PIF each month etc. With that said, I'll also go ahead and make the assumption that you're looking into credit cards for three main purposes: 1) build a solid credit history, 2) convenience of payments (easier to swipe and pay versus fumbling for cash and coins), and 3) rewards program.

 

I would strongly recommend thinking long-term and applying for credit cards that have rewards program that you believe you will make effective use of for some time. Gas, groceries, and restaurants are just a few of the top "long-term" categories I can think of. You can start out with a few student cards to build a solid enough credit history to go for the credit cards, then after about 12 months of solid payment history, try going for the credit cards that have the better rewards programs. My personal favorites:

 

Penfed Platinum Rewards

Chase Freedom

Discover More

 

I'd also personally recommend something from Amex for the "fringe" benefits of amazing customer service and purchase protection. All of my Ebay and other large purchases go on Amex because I know that if something goes wrong, Amex will have my back.

 

Take it nice and slow and think through each and every app very carefully, if you think it will be a card you will make good use of for many, many years to come. Don't fall for any promo teaser rates/teaser rewards programs. The last thing you want is to be stuck with a dozen credit cards which give you minimal/no rewards.

 

Also thought you might like to know - when I started my credit journey at 18, I started with just two student cards from Citi.  I also had no prior credit history and was surprised that they approved me with limits of $1200 and $1000. Both apps gave me the 7-10 day message and ended up being approvals. Now, seven years later, I have a total of 7 credit cards and over $95k in available credit which I am very proud to say is all individual - no cosigners, joint, or AUs. So OP, it can be done! Just be sure to take it nice, slow, and easy.

 

Good luck, and kudos to you for doing your due diligence, finding these forums, and learning about credit this early.

 


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andyaycw
Posts: 298
Registered: ‎07-25-2007
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Re: Starting out!

On a related note: If the Penfed Platinum Rewards interests you, then what you might try doing is opening up membership with Penfed, even if you may not qualify credit-wise. You can always hold out for the 1 in 100 chance that they will give you a card via pre-approval on the basis of just your credit, without any need for proof of income. I did this in my sophomore year in college, and by the time I graduated, they offered me the Penfed Platinum Cash Rewards card without me even applying for it. (Penfed does verify income, and I did not want to apply for it until I had a full-time job as I pretty much knew they would most likely decline me without any proof of income. Applying with a co-signer also was not an attractive option for me. After being a member for just two years, apparently they peeked at my credit report, liked what they saw, and gave me a $500 limit without requiring any proof of income from me.) Plus, the card will most certainly grow with you. They started me off at a $500 limit (since I was still a student and made less than $10k/year), but here I am just three years later and the card now sits at over $32k. 


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Senior Contributor
jsucool76
Posts: 4,036
Registered: ‎12-11-2011
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Re: Starting out!


andyaycw wrote:

On a related note: If the Penfed Platinum Rewards interests you, then what you might try doing is opening up membership with Penfed, even if you may not qualify credit-wise. You can always hold out for the 1 in 100 chance that they will give you a card via pre-approval on the basis of just your credit, without any need for proof of income. I did this in my sophomore year in college, and by the time I graduated, they offered me the Penfed Platinum Cash Rewards card without me even applying for it. (Penfed does verify income, and I did not want to apply for it until I had a full-time job as I pretty much knew they would most likely decline me without any proof of income. Applying with a co-signer also was not an attractive option for me. After being a member for just two years, apparently they peeked at my credit report, liked what they saw, and gave me a $500 limit without requiring any proof of income from me.) Plus, the card will most certainly grow with you. They started me off at a $500 limit (since I was still a student and made less than $10k/year), but here I am just three years later and the card now sits at over $32k. 


This!! ^^ I was thinking about moving my banking to penfed (or one of the similar CUs that are talked about here so often) so I could build a history with them since being able to do everything with one company is a lot more attractive to me. I currently have 6 different banks and it's a hassle. lol. Do you like their regular banking (non-credit) services too? 

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