New credit card user; have questions

ccole93 · ‎12-06-2012

Hello! I'm a ninteen year old starving college student. When I turned eighteen, I immediately applied for several credit cards. Capital One approved me for a Journey card and several months ago, they approved me for a Visa Platinum and Discover approved me for their "More" card. I ended up canceling the second Capital One card because it had a 25% interest rate, which I couldn't do, and just received my Chase Freedom card in the mail.

I've had a rough go of it since my first card. My score started low (~600) when I turned 18 and several months ago it was at 700. It dipped again to 668 and dropped even further this month. I need these cards for my tuition for school--I work full time and pay off the limit as I go rather than dealing with more loans. I've NEVER had a late payment but it took me a year to pay off my first credit card, which is back up again. :/ I have eight (yes, 8!) credit inquiries on my credit report.

Any suggestions? I've read about "recon" where you call the credit card company when they deny you and ask for them to review your application again. Chase hasn't gotten back to me about a Slate card, which would be great to transfer my bills to because my interest rate with CapOne is 20%. I guess my credit utilization is pretty high, too. It's kinda tough when you're trying to make ends meet.

From left to right: NPSL; $10k; $6.2k; $4.5k; $4k; $3.5k; $2.75k; $2.3k
Other CCs: $2.5k American Eagle Visa, $2.2k Old Navy Visa, $1.7k Amazon Store; $1.55k BillMeLater; $800 B&N CC; $750 A&F CC

Creditaddict · ‎12-06-2012

@ccole93 wrote:
Hello! I'm a ninteen year old starving college student. When I turned eighteen, I immediately applied for several credit cards. Capital One approved me for a Journey card and several months ago, they approved me for a Visa Platinum and Discover approved me for their "More" card. I ended up canceling the second Capital One card because it had a 25% interest rate, which I couldn't do, and just received my Chase Freedom card in the mail.

I've had a rough go of it since my first card. My score started low (~600) when I turned 18 and several months ago it was at 700. It dipped again to 668 and dropped even further this month. I need these cards for my tuition for school--I work full time and pay off the limit as I go rather than dealing with more loans. I've NEVER had a late payment but it took me a year to pay off my first credit card, which is back up again. :/ I have eight (yes, 8!) credit inquiries on my credit report.

Any suggestions? I've read about "recon" where you call the credit card company when they deny you and ask for them to review your application again. Chase hasn't gotten back to me about a Slate card, which would be great to transfer my bills to because my interest rate with CapOne is 20%. I guess my credit utilization is pretty high, too. It's kinda tough when you're trying to make ends meet.

Anyway you can get into Navy Federal or maybe a school CU.... They will be more helpful as your needs go up and down trying to get through school.

Barris · ‎12-07-2012

Maybe use a secured credit card? Might help you control your spending which would keep things a bit more in line.

espnjunkie · ‎12-07-2012

Typically the interest rate on credit cards is much higher than on student loans. Be careful about applying for too much credit right now, once you have a workable amount stop applying for more. I completely understand how you are trying to make ends meet and the situation is tough. Paying 20%+ in interest is not a good solution though. Lenders will look at your utilization and if it is higher than 20% util it could raise red flags about your default risk.

There are times when it is ok to revolve a balance and carry debt, but in truth the best way to use credit cards is to limit your spending to only what you can afford to pay in full each month if possible. You don't want to put yourself in a hole at this age.

“The real measure of your wealth is how much you’d be worth if you lost all your money.” ~Unknown
Citi Prestige World Elite Mastercard ($35,000.00), Merrill+ Visa Signature ($25,000.00), Amex BCP ($29,700.00), Amex Green (NPSL), Capital One Quicksilver World Mastercard ($10,000.00), Chase Ink Business Bold (NPSL)
TU-778 (12/03/2014))
EX (Plus) - 777 (10/21/2013)
EQ - 735 (April 2013)

SwiftTone · ‎12-07-2012

I agree. Using credit cards to make ends meet over the course of months is a poor choice. Interest rates on CC now adays typically are more than 14%. A better choice is student loans, or a line of credit that you can actively draw on and pay off as you need. If you can offer something as collatoral the terms will be better.

AMEX: $25,000, CSR: $10,000, Chase Priority Club: $1,500, Freedom: $5000, Freedom Unlimited: $1000, Discover: $21,000, BoA $11,000, WF Cash Wise: $5000

EQ FICO - 753
TU FICO - 755
EX FICO(AMEX) - 766

SnackTrader · ‎12-08-2012

Not to mention student loans have MANY options for repayment once you graduate, so your payments may be more manageable at that time, especially if your income increases. I would avoid more credit right now and look into the payment options for tuition at your school (pay over time) and student loans. There are Federal PLUS loans, and many states have student loan programs for students living in their state or attending a school within their state.

Good Luck!

In My Wallet: Amex BCP (12/12) $50,000, Chase Freedom (12/12) $16,500, Cap1 Quicksilver (6/12) $14,000, Barclaycard Rewards (5/13) $10,500, Citi Prestige (4/16) $30,000

Last App: June 27, 2015

daybreakgonesXe · ‎12-08-2012

@SnackTrader wrote:
Not to mention student loans have MANY options for repayment once you graduate, so your payments may be more manageable at that time, especially if your income increases. I would avoid more credit right now and look into the payment options for tuition at your school (pay over time) and student loans. There are Federal PLUS loans, and many states have student loan programs for students living in their state or attending a school within their state.

Good Luck!

I agree with SnackTrader; student loans are the smart way to go for tuition, especially if they're the Federal Stafford Loan (in student's name) or the Federal PLUS loan (for independent students, grad students, or parents of dependent undergraduates). My Stafford Loan is 6.8% interest, and you can make payments depending on when the recent disbursement of funds for that semester occurs. They offer either paying toward principle, resulting in the refund of the accumulated interest or paying toward principle and interest (normal loan payments) for the first 120 days borrowed money is applied, and any time not in that disbursement period you can pay toward interest. Even though my loan is deferred until graduation!

I typically pay a measly $5 every 5 days as a refund, then every summer pay off the accumulated interest so I'm only dealing with the principle when interest accumulates again.

Weird system, I know, and I could pay more down on the loan, but I'd rather save up and pay more once payments are due and I actually have a real, full-time job in my major.