Recent Grad Needs Advice

[mmoon24]

Hey everyone. First I'd just like to say I've been a longtime lurker of these forums, and it's been awesome how much information and advice you can get on whatever you need. It's been a year, but I finally got around to joining the forums. So with that being said, here comes my long post.

I'm a recent college grad. One year removed to be exact. I struggled to find a good job and was doing retail for the past 10 months. Thankfully, I'll be starting a more career oriented job next week, that will be paying about 41.5k per year. I'm currently living with my family, so I don't have to worry about rent. So right now, my focus is just on repaying my student loans (12,000 left), and going from there.

My question is, I've been looking into a travel credit card. I don't really travel often. Probably take a trip once a year. This winter, our family is going to Disney World. Next year, we'll be going to Pakistan to visit family. So since I don't travel much, I figure a "basic" travels card would be enough? There are some caveats though...

1. Was approved for an AMEX BCP two months ago. The letter I got showed my credit score was 720. I don't really use this card. I made my mom a secondary member, and she's been doing well in taking advantage of the 6% back on groceries.

2. Was approved for a Chase Freedom card last August. Great card.

3. My third credit card is a Chase +1 (those black matte cards) that I've had since 2007. This card "annoys" me the most, cause the only thing I get back on it is 1% off purchases. It's essentially a card I use to pay a few bills so I can get points on it. Otherwise, it's collecting dust.

So I'm looking at PC'in the student card into a Chase Sapphire or applying for a BoA Travels Card, cause it gives back 1.5% on all purchases. If there are any other cards or tips you can provide, I'd greatly appreciate it.

[enharu]

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@mmoon24 wrote:

Hey everyone. First I'd just like to say I've been a longtime lurker of these forums, and it's been awesome how much information and advice you can get on whatever you need. It's been a year, but I finally got around to joining the forums. So with that being said, here comes my long post.

I'm a recent college grad. One year removed to be exact. I struggled to find a good job and was doing retail for the past 10 months. Thankfully, I'll be starting a more career oriented job next week, that will be paying about 41.5k per year. I'm currently living with my family, so I don't have to worry about rent. So right now, my focus is just on repaying my student loans (12,000 left), and going from there.

My question is, I've been looking into a travel credit card. I don't really travel often. Probably take a trip once a year. This winter, our family is going to Disney World. Next year, we'll be going to Pakistan to visit family. So since I don't travel much, I figure a "basic" travels card would be enough? There are some caveats though...

1. Was approved for an AMEX BCP two months ago. The letter I got showed my credit score was 720. I don't really use this card. I made my mom a secondary member, and she's been doing well in taking advantage of the 6% back on groceries.

2. Was approved for a Chase Freedom card last August. Great card.

3. My third credit card is a Chase +1 (those black matte cards) that I've had since 2007. This card "annoys" me the most, cause the only thing I get back on it is 1% off purchases. It's essentially a card I use to pay a few bills so I can get points on it. Otherwise, it's collecting dust.

So I'm looking at PC'in the student card into a Chase Sapphire or applying for a BoA Travels Card, cause it gives back 1.5% on all purchases. If there are any other cards or tips you can provide, I'd greatly appreciate it.

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Do not PC the Chase card into a Sapphire.

Apply for the Chase Sapphire Preferred instead. Solely because of the 40k sign-up bonus.

Since you already have the Freedom, the Sapphire Preferred will work nicely together with it to rack up UR points to pay for your vacation.

[injustifiiable]

The +1 is supposed to automatically PC into a Freedom, I believe. You'll end up with two.

[Simply827]

The CSP has a nice sign up bonus but you will incur an annual fee after the first year. You likely won't spend enough to make the AF worth it so you should downgrade to regular Sapphire.

I hear the BOA card is a good deal for light travelers like yourself.

[mmoon24]

Well, I don't think I'm going to be making anywhere enough money to make the CSP worth it...

1. Would I be even eligible for a CSP?

2. Would downgrading it next year...wouldn't Chase take notice and I dunno...I guess I feel like it's cheating the system or I'm just worried about some backlash on my credit score.

[enharu]

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@mmoon24 wrote:

Well, I don't think I'm going to be making anywhere enough money to make the CSP worth it...

1. Would I be even eligible for a CSP?

2. Would downgrading it next year...wouldn't Chase take notice and I dunno...I guess I feel like it's cheating the system or I'm just worried about some backlash on my credit score.

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1. I've seen people get approved for CSP with around 30k+ income. 

2. If you're doing it just a couple times, you will probably be okay. There will not be any backlash on your credit score, though there might be some on your internal score with Chase. People downgrading the card after using it for a year is perfectly okay. Maybe you realized the card wasn't as good as you had thought it out to be, or it just doesn't suit your needs. It only become a problem for habitual abusers who do this multiple times.

[mmoon24]

Alrighty, thanks! Just one last question. Not to sound like a clueless dork, but if I spend enough to get the CSP bonus in the first three months, what happens if I downgrade it to a CP a year later?

[enharu]

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@mmoon24 wrote:

Alrighty, thanks! Just one last question. Not to sound like a clueless dork, but if I spend enough to get the CSP bonus in the first three months, what happens if I downgrade it to a CP a year later?

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Apply for the CSP in the branch. 

The branch requires only 2k spend for 40k UR points, while the online application requires 3k spend for 40k UR points. 

So if reaching 3k in spending is going to be a problem, the branch offer will make things a little better for you. 

If you downgrade it to CS a year later, you will just receive the new card in the mail. They will not take back any bonus(es) that you received previously.

[scenery_guy]

Welcome to the forum, glad you decided to post questions!

Have you considered trying to combine the limits on your two Chase cards? Not sure if they will allow but call them and ask what your options are with the Chase +1. That's a nice history with that card from 2007 and it should count for something. Don't work yourself up to make a decision right away, just call the number on the back of your Freedom and ask them about combining limits or other options. Tell them you *might* want another Chase card (tell them you love Chase - sure it's old but they like hearing it). The reason I mention the limit combining is I think you really want to have a $5K limit card before applying for the CSP. I don't know if it's a requirement but showing a higher limit card would help especially with another Chase card). If you can combine limits you are part of the way there. You could also hold off on everything and ask for a CLI this August on the Freedom. That's a good point as it's a year old. You could ask for $5K to $6K and offer up the +1 card in the process (as in transfer the limit and close the card). 

I know you don't think you need a specific travel card - and I could be way off here but depending on who you fly an airline card even with a small limit would be a sizable help when traveling with the family. Delta and AA allow you first free bag up to 9 people both ways as long as you travel on same flight as a party.  (I know this on Delta not sure on AA). Not good international I believe but even a trip to Disney it could be more saved than you pay on the card first year. Plus you earn 2X points for flight purchases on the card. If you buy all the tickets that's a good amount of points for future travel. 

You already have an Amex so the Delta card would be an easy application in a few months. They have some nice signup deals too. Same with AA or most other airlines. Search out the airline you like, look at credit card programs and make sure you look at free bags. Would be nice to get a limit large enough to pay for all the family's tickets. I would value this over the CSP in terms of return on AF right now. Most airline cards are churnable meaning you can keep for 10 months to a year and cancel before the fee hits and there is no consequence. Just tell them you are not flying much and don't need the card. You can always wait out 12 months without card and reapply and get bonus again (except for Chase airline cards they are pretty strict about multiple bonuses).

Good luck!

[Anonymous]

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@mmoon24 wrote:

Well, I don't think I'm going to be making anywhere enough money to make the CSP worth it...

1. Would I be even eligible for a CSP?

2. Would downgrading it next year...wouldn't Chase take notice and I dunno...I guess I feel like it's cheating the system or I'm just worried about some backlash on my credit score.

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On 2) Chase made the rules!  They could have done any of:

1) A less impressive sign up bonus.  Obviously they want a big one to attract customers

2) Not waive the fee for the first year.

3) Pay some portion of the bonus only after renewal.

They have in fact done a little of 3).  Depending on timing, you might not get the 7% annual bonus if you downgrade before paying the fee.

So Chase knows that some people will "try out" the card and cancel before the fee is due, but they are betting that either that number is small (because people decide to keep the card) or that they make enough money in the first year anyway, from the spend to get the bonus and other spending.

So don't feel that you are gaming the system by doing this, this is perfectly normal (as enharu says, people can certainly discover that the card isn't for them, perhaps because their needs have changed).   Just don't do it too often on every card.

But it really is the cost of doing business for Chase.