First Discover Card

[CivalV]

My brother filled out the preapproval form for Discover and to his surprise he was pre-approved for the Discover Cash Back 5% and Discover Miles with 0% APR for 14 months on purchases and BTs. I noticed the interest rate after the 14 months was high at 25%! Is this normal for a first time Discover card holder? Anyone who opened their first Discover credit account can share their experience and add data points?

My brother would like to BT one of his cards but also have a travel card. But with a 25% APR he will probably receive a limit that is useless to him? I’m not sure. 

I don’t have all his data points but here are a few

Income: $140,000

FICO Scores: Ranging In the high 600s-740s

AAOAA: Well over 15 years 

Overall UTL: 60-70% “I told him to lower this as it is hurting his scores. He noted paying down some of 1 card and got an easy 20 point increase”

Current Cards: 3 major. 2 are with HSBC all 3 have $5000 limits each

Car Loan that he is almost done paying for 

60 day lates from several years ago reporting 

[Anonymous]

With that utilization, probably a $500 limit. 

Disco is unpredictable though. Could be $500 could be $6000. Probably $500 because of UTIL with early significant growth potential for lots of spend and lots of pay. 

[CreditInspired]

IMHO, I’m surprised he was preapproved with such high UT and agree with @saeren that the limit may be small.

Yes, in the last couple of years, APR has been increasing steadily, but for those of us who PIF, we really don’t let APR bother us.

But in your brother’s case where he is comfortable with carrying balances, that 25% will be a stranglehold after the promotion wears off. So if he snags a decent CL and if he BT, he should divide the BT by 13 for the monthly payment so that doozie can be paid off by the time promo expires.

[Anonymous]

wait a minute...your brother has an income of $140,000...and his utilization is 60-70% on $15,000 total line of credit? What is he waiting for? 

[xaximus]

I'd recommend not apping for any card for now and to get an idea on how UTI works and the impact of a high UTI. Once a game plan is in place, I would recommend a card that is geared more towards BT's. A UTI of 60-70% - is basically hitting 4 thresholds and that is most likely going to be on any lender's radar. If either of you have military affiliations, I would definitely look into that as well.

[CivalV]

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@Anonymous wrote:

wait a minute...your brother has an income of $140,000...and his utilization is 60-70% on $15,000 total line of credit? What is he waiting for? 

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Trust me I told him to his face “why in the world is your UTL so high! I know you have the means to pay it down”. Slightly joking but not really. He truly did not realize that the high UTL is hurting his scores aside from the lates. Now he is aware and making progress. Honestly when he disclosed all of this to me I was shocked that he had such high UTL. 

[CivalV]

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@xaximus wrote:
I'd recommend not apping for any card for now and to get an idea on how UTI works and the impact of a high UTI. Once a game plan is in place, I would recommend a card that is geared more towards BT's. A UTI of 60-70% - is basically hitting 4 thresholds and that is most likely going to be on any lender's radar. If either of you have military affiliations, I would definitely look into that as well.

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Thank you! I agree with you 100%. I made my own plan and have stood by it. I went from 98% UTL to 50%. I am trying to get it down below 30% overall. He said he is going to pay down more on each card hopefully he can get his UTL below 30% to find a BT card with a better APR and also find a travel card since he travels often. 

[CreditInspired]

OP
I just noticed the NFCU CC in your wishlist, which tells me that you and your brother either are members or can become members. So here’s my suggestion. Become a member and he works on paying his CCs down to less than 28.9%, and then apply for a NFCU card. They seem to always have some promo running. The two that just ended 2/28 were for 0% and 1.99% BTs and with NFCU, there’s no BT fees!