A friend of mine lost their job and has been forced to accumulate some credit card debt. They are very responsible, and before the unfortunate layoff had $0 debt. As soon as they knew they'd be living on credit cards, I advised they open a Chase Freedom Flex with 15 month 0% APR offer. That card's 0% APR offer expires in September, and even if my friend finds a new job tomorrow, it's not likely they'd be able to pay off the $8k balance before then. So, I've been trying to come up with a plan for them to punt that debt until they are stable. Current situation:
FICO 8 Scores (Not Vantage): 750+ across the board
Overall Utilization: 17% (About $8,000)
New Accounts: 2/24
Total Available Credit: ~$50k
Friend has mailer offers in hand for the following:
BofA Cash Unlimited, 15 months ($200 SUB)
Discover It, 18 months
Wells Fargo Autograph, 21 months } Which lender is most likely to give the highest starting limit?
Citi Diamond, 21 months
Citi Simplicity, 18 months
Now, my thinking is that if my friend accepts one of these mailer offers, as soon as the balance transfer posts to their Chase Freedom, Chase will report it to the bureaus and there will be a window where their utilization drops to 0% (which is why I advised Chase as their the first 0% card). Once that occurs, I thought perhaps it would be opportune to try and pick up a big SUB, preferably also with 0% APR for purchases to continue using until my friend is working again.
Any and all input and advice appreciated!
@1LostArk wrote:A friend of mine lost their job and has been forced to accumulate some credit card debt. They are very responsible, and before the unfortunate layoff had $0 debt. As soon as they knew they'd be living on credit cards, I advised they open a Chase Freedom Flex with 15 month 0% APR offer. That card's 0% APR offer expires in September, and even if my friend finds a new job tomorrow, it's not likely they'd be able to pay off the $8k balance before then. So, I've been trying to come up with a plan for them to punt that debt until they are stable. Current situation:
FICO 8 Scores (Not Vantage): 750+ across the board
Overall Utilization: 17% (About $8,000)New Accounts: 2/24
Total Available Credit: ~$50k
Friend has mailer offers in hand for the following:
BofA Cash Unlimited, 15 months ($200 SUB)
Discover It, 18 months
Wells Fargo Autograph, 21 months } Which lender is most likely to give the highest starting limit?
Citi Diamond, 21 months
Citi Simplicity, 18 months
Now, my thinking is that if my friend accepts one of these mailer offers, as soon as the balance transfer posts to their Chase Freedom, Chase will report it to the bureaus and there will be a window where their utilization drops to 0% (which is why I advised Chase as their the first 0% card). Once that occurs, I thought perhaps it would be opportune to try and pick up a big SUB, preferably also with 0% APR for purchases to continue using until my friend is working again.
Any and all input and advice appreciated!
I think your friend would be better off with a credit union, non-rewards, platinum card with no balance transfer fee.
@1LostArk wrote:
- A friend of mine lost their job and has been forced to accumulate some credit card debt.
- Overall Utilization: 17% (About $8,000)
- Any and all input and advice appreciated!
I have full empathies with your friend, @1LostArk, but he has a problem. He has 17% utilization and apparently no income to report, unless he is getting some sort of separation benefit from the employer or unemployment pay. Since he is responsible and I assume honest, what will he put on his application for his income amount and source? Even with unemployment compensation, it's likely less than he made when working. To get approved, an applicant must appear to have the ability to repay, regardless of FICO score. And if he is honest about lower (or no) income, it will likely mean a lower than desired starting limit.
I'm sure he wants to get out from under the high APR debt as soon as possible, but in my opinion, he should wait until he starts a new job, has documentable income, and could qualify for a better SL than he could when unemployed.
That looks like a lot of effort on 1LA's part to avoid using he she his hers! 
Anyway, best of luck to your friend. I hope they find a job soon.
@Kforce wrote:
@Citylights18 wrote:Aren't card applications stated income?
Other income can count such as rental properties and investment income.
True.
I was just assuming loss of job would make it difficult to get a decent new card
While it's always possible, I would doubt someone out of a job and running up $8K in new credit card has much (if any) alternative income sources such as rental property or investments.
And I do agree that loss of a job would inhibit "good" approvals - if any not approvals at all.
Better to wait and sort it out after the employment is addressed.