Is it time for a new Credit Card?

Anonymous · ‎05-01-2008

I am trying to advise a relative on if they should get a new credit card or not.

She is about to turn 20 years old and for the last year she has only had one credit card (MTV Student Visa Card from Citi) and has always paid in full each month.

In thinking of the future and I know part of a good Fico score is length of credit history so would it be wise for her to now apply for a MasterCard or should she just keep the one Visa all through college?

Thanks

Message Edited by Texcalibur on 05-01-2008 02:28 PM

Anonymous · ‎05-01-2008

I would have her bite the bullet and get three or four credit cards now. Insane? No...gaming the FICO system. Here's why:

Right now she has one account. Sooner or later, she's going to want another credit account...a card, a car, a house. Five years from now, her average age of accounts will be 5. If she gets a second account, that's slashed to 2.5.

On the other hand, if she already has five revolving accounts, her average age will be 5 in 5 years, and getting another account will only lower it to 4.25 or so.

I encourage young people to get a card, work their score over 700, and then lock in three or four more cards.

Note that having a credit card and using a credit card are two different things.

Anonymous · ‎05-01-2008

Any suggestions on what cards are good to get for a 20 year old college student.

She already has the MTV Student Visa from Citi.

Thanks

Anonymous · ‎05-01-2008

I just found out that she just got a new car and is financing $5,000.

Will this hurt or help when applying for a new credit card?

Thanks

Anonymous · ‎05-02-2008

I know there are many different types of credit cards (rewards, low APR, Balance Transfer, etc...) but what banks are the best to have your credit cards with?

I ask this because I was looking at the Geico MasterCard that was offered by Merrick Bank and I think it is now offered by New Millenium Bank and I read post where people didn't like these banks at all.

Thanks

haulingthescoreup · ‎05-02-2008

Do you know what her scores are now, after the car loan?

Total history is now what, 2 years? and the car loan drops her average to 1. (This is important for recommending CC companies.)

With the combination of low income due to student status and thin, short file, she might be stuck with student cards for another couple of years. These are fine, but it would be a good idea to find out for each card if it can be switched over to a non-student card after a while, but keep the history (opening date). No big deal to pick up an inq for a card upgrade; she just wouldn't want to have a new opening date.

Also, it can be tougher to upgrade an "affinity" card (one with the name of a store, etc. on it), so if she can get a straight student Discover, student AmEx Blue, etc., that should give her more options in the future.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

Anonymous · ‎05-02-2008

If she just got the car last week will it already be on her credit report if she applies for a new card now?

Anonymous · ‎05-02-2008

Did the banks finally stop handing out "free money" to college kids.

I got my most prime best card with almost no income in college, and the rest when we only made 25k a year. With 5k limits on most of them.

Anonymous · ‎05-02-2008

@Anonymous wrote:
If she just got the car last week will it already be on her credit report if she applies for a new card now?

Does anyone know when this new car purchase will show up on her report?

Would it be better to apply for a new credit card before or after the new car shows up on the CR?

Message Edited by Texcalibur on 05-02-2008 12:04 PM

Anonymous · ‎05-02-2008

@Anonymous wrote:
@Anonymous wrote:
If she just got the car last week will it already be on her credit report if she applies for a new card now?

Does anyone know when this new car purchase will show up on her report?

Would it be better to apply for a new credit card before or after the new car shows up on the CR?

Message Edited by Texcalibur on 05-02-2008 12:04 PM

It depends on who she purchased the car through. I bought one with financing through USAA on the 23rd last month and it still has yet to hit my reports.

I would expect the car loan may drop her score's a bit.

Discover offer's a student card. See if she would be interested in it.

ETA: Chase and BofA offer student cards. Prime banks would be a plus.

Message Edited by stef37 on 05-02-2008 12:15 PM