New to Credit Cards, Need Advice

Anonymous · ‎01-08-2019

Notice: Please excuse anything I say that may sound silly, I'm still new to all of this!

Hello all,

Long time lurker, first time posting. A little over a year ago, I decided to work on my credit. Never really focused on it (I know, bad). Starting credit score of 440. At 25, I had 7 years of student debt, 6 accounts in collections, no credit cards. Fast forward to today: 620 TU, 611 EQ, no deliquent accounts, on track with student loans, and I got two credit cards:

Capital one Secured Mastercards, 6 months- 500 CL (4% utilization)

Capital One Platinum, 3 months- 300 CL (1% utilization)

4 hard inquiries on EQ (2 that will fall off this year

2 hard on TU (will fall in 2 years)

So to say 6 months worth of history. I have learned about AZEO and gardening. However I would like to have 1 more credit card and call it quits and "garden" for a couple years. I know it's a long shot, but on CK i had "Fair" approval odds for the American Express Cash Magnet card and I've been wanting that one for awhile because of rewards. Should I keep gardening on my 2 before I apply to this one or should I go for it? Reason I ask is, I rather get all my credit cards at the same time since i'm still new to credit history and build my "Credit history" from there and not apply anymore. Or is it wise to build on two and worry about another card later on in the future. Thanks!

Priory_Man · ‎01-08-2019

What is your relationship like with your bank, do they offer a CC?
I am not so sure your score and short credit history would meet an approval from Amex.
If I was starting out, I would hold off until your oldest card hits 12 months and see where you are with your scores at that time.
Keep paying off the debt you have, 6 months from now I think the picture will look better and improve your chances of an approval.
Good luck.

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Total Revolving Credit: $300,000 UTIL: <1%
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mkhan1093 · ‎01-08-2019

Welcome to the forums, Lizania!

I wouldn't trust any approval odds that CK gives because they're almost always biased, to say the least, towards their sponsors and everything. I would check Amex's own preapproval site to see whether you find the Cash Magnet card there. Even if you don't see it there, it's not the end of the world - I have many Amex cards and I don't think I've ever had a single preapproval show up on their site. In my experience, Amex is usually lax about approvals but YMMV. If it doesn't work out, I'd actually suggest you apply for the Chase Freedom Unlimited - its rewards structure is identical (as far as the 1.5 is concerned) to the Cash Magnet but I think Chase is a little better about approving profiles that already have a card or two. Moreover, if ever in the future you get one of the Chase Sapphire cards then the rewards you earn from the CFU can be transferred over there, unlike the Cash Magnet where you can only ever earn cashback. Good luck!

HeavenOhio · ‎01-08-2019

Welcome, @Anonymous.

Don't rely on Credit Karma odds. Their objective is to push cards. Also, don't rely on Credit Karma's scores as nobody uses them. Their reports and alerts are great, though, so use CK for what it does best.

You're going want to see your FICO scores. AMEX uses Experian FICO 8. You can get that score for free at CreditScore.com or Discover's Credit Scorecard. CreditScore.com also comes with a nice Experian report.

As far as timing, I'd look to acquire a card when your newest card reaches six months in age.

Anonymous · ‎01-08-2019

-Relationship with bank is good, just 1 checking/savings account for about 5 years, no negatives.

Thank you! I was on the line between both decisions. I have about $3500 in debt total, so having more under my belt will probably look better.

Anonymous · ‎01-08-2019

Mkhan1093,

Thanks for the advice! Honestly, the Chase Freedom Unlimited was my second choice! I might just go that route. I did check AMEX pre-approval and didn't qualify, but your statement did give me courage to apply without the approval if I decide to go that way. I'm learning that maybe CK isn't too reliable but they also said I had "fair" approval odds for that card. Might look into it instead when the time comes.

Anonymous · ‎01-08-2019

Hi!

I had 2 cards my first year as well, then after one year got a third, and the next year got two more. I feel like this was a good strategy for me, but either way would probably be fine.

Nothing wrong with the Cash Magnet. I have one, but if I am being honest, there are several other cards out there that are at least equal, and some that are better. I already had the Cap One Quicksilver, and really have no reason to use one over the other. If I had it to do gain, I would have probably opted for another card other than the CM because of that.

One thing to keep in mind with the CM is that you have to have $25 in rewards before accessing them. That means that you will need to spend about $1700 on the card before even being able to access the first $25 you have in rewards. You can continue to accrue, and cash out anywhere over $25, but if you cash them out, that's another $1700ish spend to get back to that threshold. Also, Amex rewards post on the following statement (e.g. rewards from Nov-Dec usage will be posting in January)

Many other CC companies will allow access to the redemption at any level, and at least one statement period sooner.

Another thing to look at is what you spend on the most, and be honest with yourself. I think we've all said something like "oh, I shop at Target a lot, so I'll get X card". Then later discover that what seemed like "a lot" is much less than we initially thought, and another card would have been better. Take a few moments and write out your average monthly budget as best you can, and then start looking at cards that fit your lifestyle.

Anonymous · ‎01-08-2019

Credit Karma does not provide FICO scores. I would find out your FICO scores before applying.

CK may have said that you have "fair" approval odds for the Chase card but IMO don't bother applying until you have at least 1 year of revolving credit history. Since I don't know your real scores, I'm going to base my opinion on your current VS scores and say that your scores are too low for approval from Chase. You would be much more likely to get into Amex than Chase JMO. Find out what your Experian FICO 8 score is and if it below 640, then I would wait to apply for Amex. This of course is all just an opinion.

HeavenOhio · ‎01-09-2019

@Anonymous wrote:
Credit Karma does not provide FICO scores. I would find out your FICO scores before applying.

CK may have said that you have "fair" approval odds for the Chase card but IMO don't bother applying until you have at least 1 year of revolving credit history. Since I don't know your real scores, I'm going to base my opinion on your current VS scores and say that your scores are too low for approval from Chase.

This is important. If your oldest card is less than a year old, the chance of a Chase approval is slim. It improves markedly once your oldest card is in its 13th month of age.