Hello! I'll start with a quick background on my situation and then get to my questions.
I am a 24 year old male who works full time. I do not have a college degree, but through knowing people and having the right connections, I landed a job with Government contractor doing DoD procurement / logistics. I currently make about $43k per year. I enjoy my job, i'm good at it, and I see a lot of room for growth despite not having a degree. My only debt is my car loan, which I owe about $11,500.00 on. I have no credit card, student loan, or any other kind of debt. I do not have any savings outside of my 401(k) and HSA, as I have been throwing all of my extra cash at the car to get it paid off. My credit score is about 750. I have been with my girlfriend for two years, but have known her for many more. We are both very conservative when it comes to money and are in pretty good positions. She is a full-time nursing student and will graduate in about a year with no student debt thanks to well-planning parents. She has about $7k in savings, a 401(k), and a private roth IRA that she contributes regularly to. She lives at home for free and saves about 90% of her income, which is low (1 day per week as a CNA at a local hospital while she's in school). She also has an excellent credit score of around 780. (buys everything with her credit card and pays off the full balance by the due date each month). We plan to get married around the time she graduates and she should be able to get a full time job making $50-$60k pretty soon after graduating (going rate for starting RN's in our area). The plan is for her to move into my apartment at that point and save almost her entire income for a year, after which we plan to purchase a home using that saved income as a down payment. We would like this down payment to be as large as possible.
My immediate goal is to pay off the car as soon as possible and free up that monthly payment ($260) to be saved towards the down payment for the home. Here is my thought process:
Continue throwing any extra funds toward the car as I've been doing, but I am also trying to get creative with ways to do it quicker. My monthly bills (including the car) add up to around $1,400 per month. I am never late and I am very disciplined. My current credit card is entry level, the rewards program consists of restaurant gift cards, etc and I have a $1,750 limit. I am wondering if it would be wise to apply for a card that has cash back rewards and pay a percentage (around 30% of my available credit so I don't screw up my score) of my bills on that card to earn the cash back / build the credit. I bank with Navy Federal and they offer a card with 1.5% cash back on all purchases, no annual fee, and a variable APR of 11.15% to 18% (not worried about the interest rate. I ALWAYS pay my full balance off before the due date so as to not accrue any interest, I am very disciplined about this. Also, my current interest rate is 23.74% and I have an annual fee of $39, so its an improvement either way). My intention would be to close my current credit card upon approval for the new one.
I understand that this isn't going to get me rich quick, but it looks like a little bit of cash that I am currently leaving on the table. My bills are consistent each month, I will always be paying them and right now i'm doing that out of my checking account with nothing to show for it. In your experience, does this seem like a wise option or should I just leave it alone? I understand the risks of doing this, but trust myself to be disciplined and pay the full balance off each month (i'm already doing that when I pay the bills out of my checking account). Any feedback is appreciated!
