Next Step Advice!

[Anonymous]

Hi everyone,

I've been trying to educate myself more & create a financial map for the next year. I make $59,000 annually and my husband makes about $130,000. I was really adverse to what I perceived as debt until about 3 years (I was a pay-in-cash kind of person). My credit score is 728 on Credit Karma with a 99% on time payment rating, 3y 1 month average account age, 0 derogatory marks. I have $294 on an Apple Barclay card (crap card) out of $2500 balance. I have 3 open accounts according to Credit Karma--the Barclay card, $10k in auto loans and $49k in student loans. 2 hard inquiries in Jan & Feb 2019 (mortgage related).

We will be refinancing our property in December 2019 and I will be going onto the mortgage this time, so I want to make sure I'm not messing that up, but I think it's time to open up a better credit card. I keep hearing about the Chase Sapphire card and have been doing some research. What are my approval odds?

I was also considering the Amazon card as I'm a Prime member, Audible subscriber, and Kindle utilizer. I added up my transaction and actually only spend about $800 a year on Amazon.

My other biggest spending pattern is food; about $16,500-$17,000 a year with consistency. We are trying to cut this ridiculous number down! We spend about $5-$10k on travel per year, depending on the year. An increase of travel is in the future.

So: would you open a card, if you were me, considering the pending refinancing of a property in 6 months? Would you go take the chance on applying for  a Sapphire card? With my spending patterns, are there other cards I should consider?

Thank you,

[tcbofade]

Hello, and welcome!

If you're planning on a mortage in 2019, I would advise against opening any new accounts right now.

...but you've found the right web site to do some research on what card will fit you best AFTER the mortage!

Good luck! 

[Caardvark]

It's worth stating: Ignore Credit Karma. The score they provide is a Vantage Score, not a FICO score and, lenders use FICO. Credit Karma is great for the reports but lousy for everything else. 

[Anonymous]

would you open a card, if you were me, considering the pending refinancing of a property in 6 months? 

I agree with @tcbofade

If you are doing anything property/mortgage related I would hold off until you complete that. 

I am/was in a similar situation. The DW and I decided to put off applying for a mortgage last month for at one more yr. Then went on an app spree which effectively resets the no new tradelines before applying for property/land financing clock. Rather it be 6 months or a year.

Would you go take the chance on applying for a Sapphire card?

Since you are being added to the mortgage I would not; not sure who you are going through to refi. Some finance companies are stricter than others when it comes to "credit norm rules". So IMO I would hold off on adding new credit if the refi is priority. I would also advise that you DH also refrain from adding new tradelines also.

With my spending patterns, are there other cards I should consider?

With the amount of possible spend you and your DH have the Sapphire Reserve or AMEX Platinum would be a good choice for travel. These cards for me at least depend on where and how you travel along with how often you travel. Seems you would also benefit fromt either points system they offer. I dont personally have them as I dont spend as much on travel per yr. But with my Chase Sapphire Preffered I racked up about 120K UR points sans the SUB.

As for other cards I would look into any card that has 5% categories for groceries, gas or bounus categories for everyday spending that matches where you would normally buy/spend( Chase Freedom & Discover IT come to mind). As for the amount of spend on "food" the Amex Gold and Reserve cover dining out (Reserve I know for sure does). Amex also has the Blue Cash Everday has 6% cash back on supermarkets up to $6K spend (if cash back is your thing). There are SO MANY more cards and combinations of cards to obtain/maximize certain spend goals. It really depends on what you are looking to get out of or from "Your Credit Journey".

Again to be "safe" I would hold off on applying for any new lines of credit; DH too, game plan a credit goal or goals, research cards that fit into where your spend is already going then apply after you completed the refi.

[Anonymous]

I spend almost $1500/mo on groceries. That doesn’t count what I spend on fast food and restaurants, which is significant. I guess I’m spending too much? We do have four kids though.

[Anonymous]

An amendment to post #4 above - for the 6% cash back on groceries, you need the Amex Blue Cash Preferred. The Everyday is 3%.

At a $17,000 annual dining spend (if that’s all restaurants), that’s screaming for a CapOne Savor with 4% back on dining ($680 cash back per year at that level) or an Amex Gold for the 4x MR points per dollar on restaurant spend, which can be put toward your travel through their various redemption portals and transfer partners.

BUT, as the others have said, these are questions to answer after your refi, not before. But you can research them thoroughly on this forum in the meantime and lay out your app strategy for once your mortgage refi is completed.