College Student 2nd Card

Anonymous · ‎01-11-2020

I've been teaching my little sister about how important credit is & I helped her choose her first credit card when she turned 18 two years ago. It was the Capital One Journey & she was approved for $1,700. Over the course of the two years, she completed the "credit steps" and every 6 months we requested a soft pull CLI and have brought the CL to $5,500. Lastly, we recently PC'd the card to a QS successfully. (I like the QS as a first card because it's accepted everywhere, no annual fee, no FTF if she travel outside the country and 1.5% CB is nice)

My sister knows how to use a credit card, PIF every month, has never been late or carried a balance. Now that she's 20 and the infamous Capital One 3 HPs have disappeared from her credit report, I'm thinking about having her apply for a second card, (DiscoverIT or Chase Freedom) so she has one rotating category card & the QS for all other general spend. I think that's a really good combo for a college student. Also, by the time she's in her 30's and ready to apply for a mortgage/auto loan/personal loan she'll have a nice file with 2 aged accounts.

However, she's nervous about having two cards. She's thinking it will be more complicated to keep track of her spending if she has to log into two different accounts. While that is true, I believe that it is an important skill to master for financial health & once she gets comfortable checking her balances on multiple platforms, it will benefit her.

Should I advise her to get the 2nd card so she's better set up for her future? Or keep things as is with just the one account?

thornback · ‎01-11-2020

If she's not comfident in her own ability to keep track of more than one account -- then don't push it.

What you could do is suggest that if she were to get a 2nd card - to drop the limit down to $200-$500 on one of the two and use the low limit card for age/buidling purposes only, putting a small charge on it once every 6 months and paying it off to keep it active. This way, she'll still build, but not feel overwhelmed in attempts to monitor spending (especially if she's in college --it may be a bit much and too easy to get distracted). And then when she's ready, she can always seek a CLI.

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HeavenOhio · ‎01-11-2020

Sell her on the benefits of having a backup card. You never know when a card might be briefly taken out of commission. The cause could be as simple as the terminal not being in the mood to talk to a particular bank for a short time. Or if there's fraud, a card would be less than fully functional until replacement plastic is in hand.

It doesn't sound to me that the additional credit limit is going to make her nervous. Rather it's the additional account. She isn't going to really know about her ability to handle that until she tries. But I think it's pretty safe to assure her that she's going to be fine.

Anonymous · ‎01-11-2020

@HeavenOhio wrote:
Sell her on the benefits of having a backup card. You never know when a card might be briefly taken out of commission. The cause could be as simple as the terminal not being in the mood to talk to a particular bank for a short time. Or if there's fraud, a card would be less than fully functional until replacement plastic is in hand.

It doesn't sound to me that the additional credit limit is going to make her nervous. Rather it's the additional account. She isn't going to really know about her ability to handle that until she tries. But I think it's pretty safe to assure her that she's going to be fine.

I agree, a second card would not hurt. But also agree with OP about being nervous about missing a payment. That's a no no in the credit card world. It takes a lot of discipline to manage multiple accounts, but there are also benefits that extend past owning credit cards. I carry and use 9 cards every month. But my due dates at this stage of the game go off automatically in my head as soon as I look at a calendar, which is daily.

Does she have a cell phone bill she pays herself? If so, she has to pay that anyway, unless it's on auto pay on her credit card account. That's one bill she can put on the backup card, while eliminating going online to pay it. 1 new payment, 1 less old payment. Or maybe some other monthly bill that can be paid by credit card that isn't already on auto pay on her card.

Anonymous · ‎01-11-2020

Get a chase freedom.

She will have to learn to manage this. Managing two credit card is just a baby step considering how many other financial stuff she will eventually HAVE to manage later. Everyone has to start somewhere. If she can't even manage two credit cards at 20.... that won't bold well for her later.

If needed, you can help her by reminding her monthly to pay bills and take advantage of 5% categories.

HeavenOhio · ‎01-11-2020

Another angle is that this is just a rerun of something that she's already become good at handling.

Also, this is a really ideal time to grab a card. Banks are going to drool over her profile, and most products are going to be available to her.

What she may want to avoid are hurdles that make cards more difficult to manage. Cards that don't show pending transactions, don't have an app with nice notification capability, or don't promptly restore available credit upon payment may not be up her alley.