Credit Card Question

[SoonerTexan]

Can anyone offer any insight?

Since we will no longer get rewards points with our debit card (see thread on Durbin Amendment), I decided I might as well get an AMEX for myself and the husband and start using it to get points. Plus, I have to make a large electronics purchase (dSLR). We get a credit card offer EVERY DAMN DAY, so I picked out an nice AMEX one and applied. I was were denied for the following reason:

In our estimation, the amount you have paid on your bank and retail credit card accounts over the last twelve months is too low.
High utilization of credit lines or insufficient utilization information
Too many recent credit checks.
Ratio of the highest account balance to the sum of the balances on all accounts


I have three credit cards through banks, all opened over the past three years (none recently). They have never been paid late. However, we don't use them often and I've never carried a balance. One has never been used. I'm wondering if this is why we were denied? I checked my credit report and there is nothing negative. I was told by the bank my credit score is good.



I'm wondering about recent credit checks--Capital One Showed up 20+ times (jerks). Other companies did too. Could this be the reason?


I'm new to all this, so I'd appreciate any insight. I've avoided credit cards in my short 5 year financial lifespan and really don't like the idea of them, but it seems like I should be doing something to make sure we can get the credit we may need in the next couple years.


At the very least, I'm PO'ed that I went through all that dang junk mail! I'm considering just opting out!

[scrub-jay]

I opted out of the cc offers as an FYI, I felt it was a security risk. My guess is that you didn't use your other cards enough. I don't carry a balance, but 2 things help me (and one really depends on your pay structure): (1) Use your cards and pay balance in full (2) If you can, overpay by a few dollars, but no more than $5. That really makes your score jump...but the company will issue you a check after a while. Is there a reason you don't want to use your other 3 bank credit cards?

[SoonerTexan]

One card was a crappy BOA card from my high school days. I've been wanting to close it forever, but I've heard it affects your score negatively, so I was told to leave it open. I'll probably just close it anyway.

The other two are Chase I got for the (now expired) 0% APR offer. The rewards are for them are okay, but I wanted to get the AMEX for the consumer protection since I'm about to buy $1500+ of photo equipment. Plus the offer was good. I don't really need/want another card, but felt like I should be taking advantage of the offer/protection.

Mainly I'm annoyed that I was denied. And I'm not going to lie, it dings my pride a little bit. I'm proud of the fact that at almost 23 we have no debt beyond med school loans (haha, for now!) and good credit. If you're going to bombard my mailbox with CC offers and issue credit checks once a month, at least give me the dang card!

[weeniegeniewife]

Amex is probably the toughest card to get, because you have to pay it off every month and there's no credit limit. DH and I were in our 30's before we got our first Amex cards. We use them for large purchases, trips, etc.

I hear ya on being bummed about losing your debit card rewards program. Has your DH tried to apply for an Amex? If he's approved you can be a signer on the account.

[SoonerTexan]

Has your DH tried to apply for an Amex?

Haha, fat chance if I cant get approved. Dude has never had a credit card and technically has no income if he cant count mine. Who knows what his credit score is.

[Urowife]

I like our Chase Visa card, I get 1% cash back on everything and 3% on bonus categories (they change every quarter). I also have a Citibank mastercard and a Costco AmEx card, but I only use the AmEx at Costco, and the Visa everywhere else. I like having a Visa because it is accepted everywhere. AmEx usually is as well, but there are some places that won't accept it.

[migirl]

My guess was also that you don't use your other cards enough.

I know you said you don't like the idea of using credit cards, but IMO they're somewhat necessary to building a good credit history.

[poky]

Right. I'm not surprised they're leery of giving you an unlimited card that you have to pay off every month if you barely use the three cards you have. How is the consumer protection better on amex than the other cards?

Definitely close the one you don't use, and just use one of the chase ones for the camera purchase. And start using the card(s) more for things like groceries; as long as you pay them off every month, the APR doesn't matter.

[Michele]

AmEx extends the warranty of many things.

https://www212.americanexpress.com/d...aq&type=intfaq

[Michele]

I'll ask Russ how we qualified. We used to pay our med/vet tuition w the card, then pay off the card w the student loans. We racked up a ton of hotel points that way!!

[MissCrabette]

It's probably that you don't use your cards enough to show much activity on your credit report. I have kept my very first credit card and set up a very small monthly charge on it. That way it keeps my credit score high, and it doesn't matter if it's my best credit card or not. I'd try using one of your credit cards regularly in order to build up a bit more credit history and then apply for an American Express card again later. I wouldn't even look at the interest rate if you plan on paying your card off every month. It makes no difference if it's 0% or 22%.

[Deebs]

AMEX is supposed to be the hardest card to get - we didn't get one until post-training (Chicago legend has it that Oprah's AMEX was revoked for one missed payment several years ago). I would be concerned about the frequent credit checks - that deducts points from your credit score. I guess the good news about being rejected is that (I think) you can get a free credit score, at least you used to be able to. I would google for a good rewards cards and go for that.

[SuzySunshine]

We have two American Airlines rewards cards, one is MC and one is Amex. We probably got the Amex because we already had the MC through Citibank and got the Amex through them too. When we're done with training we'll switch to a straight points AmEx.

I just requested my free credit score a few weeks ago and it specifically says on there that credit checks that you did not request do not affect your score. Like card companies checking so they can send you a pre-approved offer.

[poky]

I just requested my free credit score a few weeks ago and it specifically says on there that credit checks that you did not request do not affect your score. Like card companies checking so they can send you a pre-approved offer.

Right. They may not affect your score, but if one card company sees you're getting tons of offers from other card companies, that could still be a flag that you have opportunity to run up lots of credit and get yourself into trouble. With little payment history to go on, too, I can see where that could maybe contribute to denial.

[Michele]

Some companies pull "soft" checks which don't affect your credit score much, if at all. But when you sign up for utility services or rent an apartment/house, they will pull a "hard" check which does affect your score.

As I understand it, you don't necessarily want to cancel cards you don't use. Especially if it was one of the first cards you got. Length of history is part of your risk/benefit assessment. As is percent utilization. So even with a perfect full payment every month, if you are using most of your available credit, you are riskier than someone else. Say you have 4 cards: 3 $5000 cards that you never use and 1 $10000 limit that you do use. You have 25K available....say you average 5K use monthly (and pay it all off each month). You are at 20% utilization. If you cancel those three you don't use, you bump yourself up to 50% utililzation.