topic Re: Recent Grad Needs Advice in Credit Cards

Recent Grad Needs Advice

mmoon24 — Mon, 01 Jul 2013 17:31:54 GMT

Hey everyone. First I'd just like to say I've been a longtime lurker of these forums, and it's been awesome how much information and advice you can get on whatever you need. It's been a year, but I finally got around to joining the forums. So with that being said, here comes my long post.

I'm a recent college grad. One year removed to be exact. I struggled to find a good job and was doing retail for the past 10 months. Thankfully, I'll be starting a more career oriented job next week, that will be paying about 41.5k per year. I'm currently living with my family, so I don't have to worry about rent. So right now, my focus is just on repaying my student loans (12,000 left), and going from there.

My question is, I've been looking into a travel credit card. I don't really travel often. Probably take a trip once a year. This winter, our family is going to Disney World. Next year, we'll be going to Pakistan to visit family. So since I don't travel much, I figure a "basic" travels card would be enough? There are some caveats though...

1. Was approved for an AMEX BCP two months ago. The letter I got showed my credit score was 720. I don't really use this card. I made my mom a secondary member, and she's been doing well in taking advantage of the 6% back on groceries.

2. Was approved for a Chase Freedom card last August. Great card.

3. My third credit card is a Chase +1 (those black matte cards) that I've had since 2007. This card "annoys" me the most, cause the only thing I get back on it is 1% off purchases. It's essentially a card I use to pay a few bills so I can get points on it. Otherwise, it's collecting dust.

So I'm looking at PC'in the student card into a Chase Sapphire or applying for a BoA Travels Card, cause it gives back 1.5% on all purchases. If there are any other cards or tips you can provide, I'd greatly appreciate it.

Re: Recent Grad Needs Advice

Anonymous — Mon, 01 Jul 2013 17:34:40 GMT

@mmoon24 wrote:
Hey everyone. First I'd just like to say I've been a longtime lurker of these forums, and it's been awesome how much information and advice you can get on whatever you need. It's been a year, but I finally got around to joining the forums. So with that being said, here comes my long post.

I'm a recent college grad. One year removed to be exact. I struggled to find a good job and was doing retail for the past 10 months. Thankfully, I'll be starting a more career oriented job next week, that will be paying about 41.5k per year. I'm currently living with my family, so I don't have to worry about rent. So right now, my focus is just on repaying my student loans (12,000 left), and going from there.

My question is, I've been looking into a travel credit card. I don't really travel often. Probably take a trip once a year. This winter, our family is going to Disney World. Next year, we'll be going to Pakistan to visit family. So since I don't travel much, I figure a "basic" travels card would be enough? There are some caveats though...

1. Was approved for an AMEX BCP two months ago. The letter I got showed my credit score was 720. I don't really use this card. I made my mom a secondary member, and she's been doing well in taking advantage of the 6% back on groceries.

2. Was approved for a Chase Freedom card last August. Great card.

3. My third credit card is a Chase +1 (those black matte cards) that I've had since 2007. This card "annoys" me the most, cause the only thing I get back on it is 1% off purchases. It's essentially a card I use to pay a few bills so I can get points on it. Otherwise, it's collecting dust.

So I'm looking at PC'in the student card into a Chase Sapphire or applying for a BoA Travels Card, cause it gives back 1.5% on all purchases. If there are any other cards or tips you can provide, I'd greatly appreciate it.

Do not PC the Chase card into a Sapphire.

Apply for the Chase Sapphire Preferred instead. Solely because of the 40k sign-up bonus.

Since you already have the Freedom, the Sapphire Preferred will work nicely together with it to rack up UR points to pay for your vacation.

Re: Recent Grad Needs Advice

injustifiiable — Mon, 01 Jul 2013 17:34:44 GMT

The +1 is supposed to automatically PC into a Freedom, I believe. You'll end up with two.

Re: Recent Grad Needs Advice

Simply827 — Mon, 01 Jul 2013 18:01:34 GMT

The CSP has a nice sign up bonus but you will incur an annual fee after the first year. You likely won't spend enough to make the AF worth it so you should downgrade to regular Sapphire.

I hear the BOA card is a good deal for light travelers like yourself.

Re: Recent Grad Needs Advice

mmoon24 — Mon, 01 Jul 2013 21:19:06 GMT

Well, I don't think I'm going to be making anywhere enough money to make the CSP worth it...

1. Would I be even eligible for a CSP?

2. Would downgrading it next year...wouldn't Chase take notice and I dunno...I guess I feel like it's cheating the system or I'm just worried about some backlash on my credit score.

Re: Recent Grad Needs Advice

Anonymous — Mon, 01 Jul 2013 21:31:09 GMT

@mmoon24 wrote:
Well, I don't think I'm going to be making anywhere enough money to make the CSP worth it...

1. Would I be even eligible for a CSP?
2. Would downgrading it next year...wouldn't Chase take notice and I dunno...I guess I feel like it's cheating the system or I'm just worried about some backlash on my credit score.

1. I've seen people get approved for CSP with around 30k+ income.

2. If you're doing it just a couple times, you will probably be okay. There will not be any backlash on your credit score, though there might be some on your internal score with Chase. People downgrading the card after using it for a year is perfectly okay. Maybe you realized the card wasn't as good as you had thought it out to be, or it just doesn't suit your needs. It only become a problem for habitual abusers who do this multiple times.

Re: Recent Grad Needs Advice

mmoon24 — Mon, 01 Jul 2013 22:42:18 GMT

Alrighty, thanks! Just one last question. Not to sound like a clueless dork, but if I spend enough to get the CSP bonus in the first three months, what happens if I downgrade it to a CP a year later?

Re: Recent Grad Needs Advice

Anonymous — Mon, 01 Jul 2013 22:44:47 GMT

@mmoon24 wrote:
Alrighty, thanks! Just one last question. Not to sound like a clueless dork, but if I spend enough to get the CSP bonus in the first three months, what happens if I downgrade it to a CP a year later?

Apply for the CSP in the branch.

The branch requires only 2k spend for 40k UR points, while the online application requires 3k spend for 40k UR points.

So if reaching 3k in spending is going to be a problem, the branch offer will make things a little better for you.

If you downgrade it to CS a year later, you will just receive the new card in the mail. They will not take back any bonus(es) that you received previously.

Re: Recent Grad Needs Advice

scenery_guy — Tue, 02 Jul 2013 02:34:30 GMT

Welcome to the forum, glad you decided to post questions!

Have you considered trying to combine the limits on your two Chase cards? Not sure if they will allow but call them and ask what your options are with the Chase +1. That's a nice history with that card from 2007 and it should count for something. Don't work yourself up to make a decision right away, just call the number on the back of your Freedom and ask them about combining limits or other options. Tell them you *might* want another Chase card (tell them you love Chase - sure it's old but they like hearing it). The reason I mention the limit combining is I think you really want to have a $5K limit card before applying for the CSP. I don't know if it's a requirement but showing a higher limit card would help especially with another Chase card). If you can combine limits you are part of the way there. You could also hold off on everything and ask for a CLI this August on the Freedom. That's a good point as it's a year old. You could ask for $5K to $6K and offer up the +1 card in the process (as in transfer the limit and close the card).

I know you don't think you need a specific travel card - and I could be way off here but depending on who you fly an airline card even with a small limit would be a sizable help when traveling with the family. Delta and AA allow you first free bag up to 9 people both ways as long as you travel on same flight as a party. (I know this on Delta not sure on AA). Not good international I believe but even a trip to Disney it could be more saved than you pay on the card first year. Plus you earn 2X points for flight purchases on the card. If you buy all the tickets that's a good amount of points for future travel.

You already have an Amex so the Delta card would be an easy application in a few months. They have some nice signup deals too. Same with AA or most other airlines. Search out the airline you like, look at credit card programs and make sure you look at free bags. Would be nice to get a limit large enough to pay for all the family's tickets. I would value this over the CSP in terms of return on AF right now. Most airline cards are churnable meaning you can keep for 10 months to a year and cancel before the fee hits and there is no consequence. Just tell them you are not flying much and don't need the card. You can always wait out 12 months without card and reapply and get bonus again (except for Chase airline cards they are pretty strict about multiple bonuses).

Good luck!

Re: Recent Grad Needs Advice

Anonymous — Tue, 02 Jul 2013 04:21:48 GMT

@mmoon24 wrote:
Well, I don't think I'm going to be making anywhere enough money to make the CSP worth it...

1. Would I be even eligible for a CSP?
2. Would downgrading it next year...wouldn't Chase take notice and I dunno...I guess I feel like it's cheating the system or I'm just worried about some backlash on my credit score.

On 2) Chase made the rules! They could have done any of:

1) A less impressive sign up bonus. Obviously they want a big one to attract customers

2) Not waive the fee for the first year.

3) Pay some portion of the bonus only after renewal.

They have in fact done a little of 3). Depending on timing, you might not get the 7% annual bonus if you downgrade before paying the fee.

So Chase knows that some people will "try out" the card and cancel before the fee is due, but they are betting that either that number is small (because people decide to keep the card) or that they make enough money in the first year anyway, from the spend to get the bonus and other spending.

So don't feel that you are gaming the system by doing this, this is perfectly normal (as enharu says, people can certainly discover that the card isn't for them, perhaps because their needs have changed). Just don't do it too often on every card.

But it really is the cost of doing business for Chase.

Re: Recent Grad Needs Advice

mmoon24 — Tue, 02 Jul 2013 15:47:42 GMT

After reading what everyone has to say, I think my first and best course of option will be to combine my limits on my +1 and Freedom. After that, I'll look into probably Southwest, CSP, or an Arab Emirates if one exists. One question, if I combine two credit cards, doesn't that "close" my +1 account? I always thought closing old credit cards was a bad thing?

Re: Recent Grad Needs Advice

Creditaddict — Tue, 02 Jul 2013 15:55:07 GMT

Sounds like you are past your 61 days on Amex too... you should ask for a 3x current CLI. $9900.

I would just go ahead and apply for whichever chase you want now and then you can figure out combining or PC the other ones later.... you have a lot of history with them which they love and these newer cards they have been giving some much higher limits especially to those adding additional chase accounts to their wallet.

Re: Recent Grad Needs Advice

scenery_guy — Tue, 02 Jul 2013 18:11:46 GMT

Good observation with closing the card. you have been reading the boards.

The card will still be on your reports for 10 years with the history of good payments. In 10 years when that card drops off you will have a great robust history with prime cards. Sometimes it's a better move to close an older lower limit card. For some people it's a forever card and for some it's a stepping stone. You will never be going backwards so I doubt you will need that stone again. My suggestion of talking to a Chase representative is to get their feeling on your future. Sometime they are of no help and sometimes they have a good idea. It never hurts to ask, you can always decline anything they offer and hang up. Nothing bad will happen from the call. Let Chase have the opportunity to offer something.

Creditaddict brought up a good point and I missed it. If you are past 61 days with AmEx you should call the number on the back of the card and request an increase. They will ask how much you want, the maximum is 3X your current limit - request $9,900. They may counter offer a much lower number or very close to what you ask. I would take what they offer. I would suggest you wait until you start the new career even of you do this the week you start. They ask you information about income and this is a great opportunity to update your info with AmEx with new salary. I would call but you can do it online if you don't like talking to CSR. Both outcomes are the same so pick one.

Re: Recent Grad Needs Advice

mmoon24 — Thu, 04 Jul 2013 03:31:14 GMT

Just want to make one last post thanking everyone for their input and answers. I'll definitely take this advice to heart. Can't wait to start my new job, and better my overall credit card usefullness!

Re: Recent Grad Needs Advice

mmoon24 — Sat, 06 Jul 2013 17:42:20 GMT

Just wanted to give a bump, because I have an update.

Went to my local Chase Branch this morning and spoke to a banker. I will say, I was a bit annoyed that I knew more about the credit cards and rules than my own banker. When I asked her questions about closing, combining, or applying, she wasn't sure on most of them and had to call another line.

Anyways, turns out I'm Pre-Approved for a CSP. So I'll probably apply for that a bit down the road, and also increase the limits on my AMEX and Freedom.

Re: Recent Grad Needs Advice

scenery_guy — Sat, 06 Jul 2013 18:08:20 GMT

That's awesome! An offer in branch typically has a lower spend threshold for the bonus points than available online. When you are ready to apply check the online offer then go in branch and ask what they can offer. It's nice to throw the branch a bone and let them get the new card account. Helps with branch quotas.

It's pretty common that the bankers in branch don't know the ins and outs of the credit card game. As long as they know who to call it's all good. When it's time for you to combine and cancel call the number on the back of your card. You will be speaking to an expert (as close as you will get first call). Remember you can always ask to speak to a supervisor to confirm something or try to get a better deal. Also you can always say no thanks and call back later.