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should i get a new card now or wait?

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Anonymous
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should i get a new card now or wait?

Hi, I'm new to the forum.

In feb I got approved for an unsecured mastercard w/ a 1k limit at 25.24% apr, it also has cashback of 1% to 3% on various things. it's my first and only card. i had a totally empty credit report and no fico score when i applied for it.

I will ask for better terms and CLI at the 6th month mark, that's when my fico score will first become available.
But, I have an idea for right now that I need to ask about:

#1: Will it help or hurt my fico score to get a high limit secured card right now? (opening cards fast is bad, but improved utilizations limits is good)
#2: If I open a secured card with SDFCU or DCU right now in the amount of 6k, will my limit be for 6k or above when that card graduates to unsecured in a year, or will they lowball me?

I would probably qualify for another unsecured card w/ 1k limit right now, but I think a high limit secured card from a CU would be more helpful to me.
should I do it? what would you do?

My fico score will become available in about 2 months, and I don't know how good it will be or what that would allow me to do.

Message 1 of 34
33 REPLIES 33
Anonymous
Not applicable

Re: should i get a new card now or wait?

Wait.  25.24% APR on your first card is high.  You can raise your FICOs with only one card.  Don't get stuck with several cards with high APRs.  

 

(Mod cut - keep comments FSR) Take it slow, enjoy the ride but don't mess it up trying to get somewhere so fast.

 

Research what your next card will be in the meantime.  I would recommend a Discover card due to low APRs and SP CLIs.  Stick to increasing your limit on what you already have rather than constantly apping for something new.  It took me 5 years to get 3 cards with limits at $20k and above.  I still get the itch for a new card if folks are getting high limit approvals but it makes no sense to keep getting new cards.

Message 2 of 34
Anonymous
Not applicable

Re: should i get a new card now or wait?

the secured SDFCU card is a guaranteed rate of 14.24% and the DCU card is guaranteed to be 13.75% so it would be as low a rate as i can find. the cards graduate to become: 9.24%-17.24% and 10.75%-18.00% apr.

 

with that said, the rate isn't too important to me right now since I'm paying in full when establishing credit. carrying a balance is suppose to be detrimental. and with a CU membership i would be eligable for installment loans at 3% this is far better than using a credit card.

Message 3 of 34
Kforce
Valued Contributor

Re: should i get a new card now or wait?


@Anonymous wrote:

Hi, I'm new to the forum.

Welcome  !

In feb I got approved for an unsecured mastercard w/ a 1k limit at 25.24% apr, it also has cashback of 1% to 3% on various things. it's my first and only card. i had a totally empty credit report and no fico score when i applied for it.

Excellent way to start your credit, not many start with an unsecured CC as first.

I will ask for better terms and CLI at the 6th month mark, that's when my fico score will first become available.

But, I have an idea for right now that I need to ask about:

#1: Will it help or hurt my fico score to get a high limit secured card right now? (opening cards fast is bad, but improved utilization's limits is good)

Like most things pros and cons, depends on how you use, pay, financial stability, income, etc

Apr = Only important if you carry a balance, I have never had a balance with 50+ years of having CC's.  Don't even care what APR I have, and never asked to have one lowered, a non factor for me

Utilization = If you are really a PIF person, this can be controlled by when you pay, as apposed to continually getting higher CL's and lots of credit cards.  You can report what ever utilization you want with what ever CL and number of cards you have.

I only have a few CC's, moderate CL's and control utilization any month I want


#2: If I open a secured card with SDFCU or DCU right now in the amount of 6k, will my limit be for 6k or above when that card graduates to unsecured in a year, or will they lowball me?

Most CL's are figured by your profile, (income, spend, credit history, on-time payments, etc) not what you were willing to tie-up for a secured card. Just because you put 6k in a savings does mean you to keep that CL.

 

I would probably qualify for another unsecured card w/ 1k limit right now, but I think a high limit secured card from a CU would be more helpful to me.  Should I do it? what would you do?

An unsecured card should grow with time.

If you need a high CL "Now", a secured card is not a bad thing.

My though, in 2 years they would be about the same, if from the same CU.

CL growth is very dependant on issuer

My fico score will become available in about 2 months, and I don't know how good it will be or what that would allow me to do

It will allow you see your score, then become obsessed with how slow it grows.

Fico scores take time to grow. My daughter went from no score to 790 with one secured card in 4 years, got a nice student card 6 months ago and now has 830's. Next card will be a good reward card. It does not take a lot of cards or high CL's, just time, PIF, and patience. 

 

You can get a bunch of starter cards or move slow and get one at a time that have better value and no need to be cut into pieces in a few years.  Are you the "Tortoise or the Hair", both will get you to the end, and we will never really know the best method.

I was a "Tortoise" and had 850's in about 10 years, many on this forum have had 40 cards "Hair's" and also got there. But all had a time of 10+ years.  it is a long race. 

 


Message 4 of 34
KJinNC
Valued Contributor

Re: should i get a new card now or wait?

Do you have a specific goal, or just a general goal of higher scores at some point in the future?

 

Opening more cards now will temporarily drop your score but may have some benefit in the long run. Not opening more cards now will preserve your score in the short term but you may be more likely to get thin-credit denials in the future. If you are thinking long-term, I would probably try prequalification for some more cards I would keep longterm, and, I would probably get an installment loan of some sort; Self Lender is an easy one to get, but you probably qualify for other options. Having three cards gives a score boost and allows use of the All Zero Except One method. An installment loan will give you a "good credit mix" that gives a boost. But there are tradeoffs to everything. If you did that, you risk being shut out of Chase cards for a while (Chase has a notorious "5/24" rule that if you've opened five cards in the last 24 months, you are denied for any Chase card), and, you would get dinged for "credit-seeking behavior" and your average age of account would go down. So, in the short term, this would probably hurt.

 

I am not sure that a secured card with a high credit limit will do that much for you. Most (not all) secured cards report as secured cards, meaning, lenders can tell the difference between secured and unsecured. They count the same for the credit score but may be counted differently by human loan officers. Again, is there a particular reason you want a high credit limit (like do you need it for travel), or is it just part of a plan to have higher scores down the road? If the former, it may make sense for you, but if the latter, I would just wait to get higher unsecured limits.

 

There is no credit benefit to paying in full, in and of itself. What helps credit is paying on time, and keeping utilization below 9% at the time your statement is cut. Paying in full is a good practice to avoid paying interest and to ensure utilization doesn't creep up on you, but you don't get rewarded for it in terms of credit score beyond the factors I just mentioned.

 

Good luck!



FICO Resilience Index: 64. Cards: 5/24, 2/12, 2/6. Accounts including loans: 8/24, 4/12, 3/6. Card CLs total $213,900, or $240,400 including the AU card. Cards (oldest to newest)

Authorized user / Corporate / Auto loans / Personal loan
Message 5 of 34
Anonymous
Not applicable

Re: should i get a new card now or wait?

the main goal is to improve my credit is so that i will be able to rent an apartment in my name. i'd also like to be a part of a CU to get access to low rate loans for if i want to buy a car in a few years. another goal is to be able to buy appliances without paying all upfront in cash. my credit was trashed my whole life because of identity thefts, i waited it out so i have a fresh start now.

 

I'd like to have a card where i can put a big purchase on it of say 3k just in case of an emergency or have a quick way to buy something like a computer, since i can probably balance transfer it later onto a 0% apr card or pay it off the card with a low rate loan.

 

the cost of a phone these days is approaching and sometimes exceeding 1k, and that would max out my current card just to buy that single item. if you apply for samsung financing, it counts as a "consumer finance account" and that will ding your fico score. so it's suggested that you buy it on a 0% apr card, and right now i don't qualify for any such 0% card offers, or any samsung financing. so having a larger limit card would at least allow me to buy it without paying cash.

 

it seems to be that certain lenders are very stingy and others aren't. chase, capital-one, and citi seem to be the worst ones. they are giving out small limits and tiny CLI's, whereas discover and others seem to give out thousands in a single CLI. cap1 is known for never unsecuring their secured card, even after they promise that they will do it. so i want to avoid these banks and credit unions that are hostile to the customer, some of them don't even offer secured cards. some give you the runaround when you apply demanding all kinds of paperwork and questioning you about your reasons for joining. so i'm really leaning towards joining SDFCU or DCU as these seem to be the least hostile.

 

my end goal for cards is to end up with 2 or 3 cards with high limits, rather than lots of cards with small limits. it seems to be that lenders will set  your limit based upon the limit they see someone else already gave you. that's another reason i was curious about a high limit secured card, so that maybe other lenders would see a reduced risk and be less skittish about giving me a similar limit on unsecured cards.

Message 6 of 34
Anonymous
Not applicable

Re: should i get a new card now or wait?

that 5/24" rule is a perfect example of a hostile policy towards customers. chase can stuff it, i don't want to ever deal with them.

Message 7 of 34
KJinNC
Valued Contributor

Re: should i get a new card now or wait?

If I were you, I would try Amex prequalification and see if anything pops up. If it does, I'd probably apply for it. Wait one to three months depending how conservative you want to be, check Discover prequalification. If you are prequalified for it, I'd get that. Then sit tight as far as cards. You will be close to setting off "credit-seeking behavior" alarms and your credit score may possibly go down due to age of accounts tanking, but then again, it may go up due to having three cards. If you don't get or don't want one of those two, another thing to consider is the Amazon Store Card if you shop a lot with Amazon. It's easy to qualify for and limits can build up there. I would probably also do a Self Lender loan. You don't actually get money you can spend. You "borrow" $500, they put it in a CD for you, you "repay" the "loan" over time, and at the end, you get the money from the CD. Since they charge a higher interest rate than the CD earns, it will end up costing you something like $60 or $70 altogether, but, you get a positive installment loan on your reports, which triggers the "good credit mix" FICO reason.

 

That's kind of a medium-aggressive plan I'm suggesting, but, I can't say it's the best plan, just that it's probably what I would do in your shoes. Good luck!



FICO Resilience Index: 64. Cards: 5/24, 2/12, 2/6. Accounts including loans: 8/24, 4/12, 3/6. Card CLs total $213,900, or $240,400 including the AU card. Cards (oldest to newest)

Authorized user / Corporate / Auto loans / Personal loan
Message 8 of 34
Anonymous
Not applicable

Re: should i get a new card now or wait?

Based on your last couple of posts it's easy to see that you might have a skewed view on how this all works.

 

1.) Applying for an apartment isn't a big deal.  Wait for your FICO to generate in a couple of months to see what it actually is.  Most apartments will approve a move-in at 600 but require a deposit and over 700 maybe a lesser deposit amount.

 

2.) If you're paying 1K for a phone then you need to be making a significant salary to substantiate it.  There's no reason to pay that much for a phone just to keep up with your buddies.  If it makes calls, texts, and can surf the web that's all there is to it.  If you're paying more than $25/mo for service you're getting bent over.

 

3.) laptop - sure they're expensive but, if you shop for anything besides the next MacbookPRO you can get them for about $500-$1000

 

4.) Appliances... If you're planning on buying a house then it's a potential necessity but, in most cases they come with the new place already if you write it into the offer

 

5.) hostile or not is subjective. Banks / CU's have lending criteria you must meet to get one of their cards or a loan. It's just how the business is run.  If you don't meet a/b/c criteria then you don't get what you want.  They don't hand out participation CC's to everyone with a pulse.  For that sort of thing you'd be looking for Credit One and First Premier and you'll pay dearly for it.

 

Back to the OQ at the top of the page.... 

If you open a card with either your limit is going to be whatever you deposit with them.

When it graduates (depends on lender) you may or may not receive a CLI at that time.

Yes, it will help your scores to lessen the burden of carrying a balance and the potential for higher limits down the road with other lenders if you're putting in a large deposit for as you put it $6K.  

 

 

Message 9 of 34
Anonymous
Not applicable

Re: should i get a new card now or wait?


@Anonymous wrote:

2.) If you're paying 1K for a phone then you need to be making a significant salary to substantiate it.  There's no reason to pay that much for a phone just to keep up with your buddies.  If it makes calls, texts, and can surf the web that's all there is to it.  If you're paying more than $25/mo for service you're getting bent over.


I agree with everything you said except this point. I would be hard pressed to find anything as cheap as $25/mo for the service I need. A lot of us conduct business from our phones + stream music frequently and as a result need unlimited data which isn't cheap. Maybe for those who don't rely on a cell phone as much you can swing using a prepaid phone for calls and texts for that price, but even prepaid phones are often more expensive than $25 a month.

 

In regards to the original post, I'd try for the AMEX prequal and see what happens- my vote is on getting one more card and hitting the garden for awhile (no new apps). I don't agree with getting a loan just for credit mix but some people have had success using that method. Just not my cup of tea.

Message 10 of 34
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