Credit Card Question

[scrub-jay]

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.

This is my understanding as well.

[Vishenka69]

We both got Amex cards back in college through their student cards (which have small limits). Amex actually has lots of diff card options. I'd suggest going to their website and applying for one of those.

[SuzySunshine]

Yes, I should say that our Amex limit is tiny compared to our 2 MC's.

[SoonerTexan]

Thanks for all the advice. It was good motivation to take a look at what we have and whether or not it is what will work best for us. I'm closing one that we will never use and adding DH as a co-owner on the one I think we will use exclusively to get points now. I checked with Chase and they have a card with similar benefits to AMEX I might apply for later.

Actually, I have a corporate AMEX that I was told I could use for personal purchases as long as I paid them off, but I don't like to cross that line.

Apparently I slipped through the cracks with AMEX because they gave me a Gold card when I was 21 and had just graduated from college, I had no job, and up until then had only had a student credit card with a $300 limit....!!! I'm not sure how that happened. I still have it and have racked up a ton of points, we filter almost everything through it for that purpose. I have to say I love AMEX for their customer service, I always find it to be above par.

DH was recently turned down for a SWA Visa for an insufficient credit history/revolving accounts (he got his first credit card 2 years ago.) Does anyone know if it's a good/bad idea for me to try for one? I have a much more extensive credit history although I honestly have no idea how good my credit is and don't want to hurt it by being denied. Also, how can he build up more credit? All the utilities are primarily in my name because that way I can easily call customer service to deal with them. I'm so clueless about this crap. Any thoughts?

[MissCrabette]

Getting a credit card used to be MUCH easier, especially in college.

You could try adding your husband as an authorized user on your accounts so he can build some credit history. He can also try getting a credit card through a credit union or a bank he's been doing business with for a while. If at all possible, apply in person at a branch or try to talk to someone directly instead of just filling out an application.

Someone correct me if I'm wrong, but it's not the act of being denied that hurts your credit score (I'm not even sure the denial gets reported). It's the credit check that the issuer does when you apply that lowers your score a few points. It will bounce back up soon after it. Just don't go applying to a whole bunch of credit cards in a short period of time because your chances of being approved keep going down with each application.

Thanks for the advice! He's on my AMEX and he's got WF credit card (his one and only ever) so hopefully that will help. I went to college quite awhile ago and remember being shocked even then when I was approved for my gold card, but let's face it I shell out a lot every year to have it and they constantly hound me to upgrade to platinum ($375 a year? No thank you!) I am just starting to worry that our credit won't be good enough to buy a house next year and I really have no idea how these things work. I don't think I have ever checked my credit score, is that something I should do?

[SuzySunshine]

Everyone should check annually regardless of their financial situation. Use the site that Really is free, not the ones that are selling you protection. If someone doesn't beat me to it I'll post when I get to my computer.

[MissCrabette]

http://www.annualcreditreport.com/

Sorry. And thanks for the reminder to check regularly. I've been slacking recently.

[scarlett09]

Getting a credit card used to be MUCH easier, especially in college.

Yup, and there are now restraints on how much credit card companies can access college campuses and sign up college students. Most of them don't seem to understand the consequences of using a credit card and the damage the debt can do.

http://abcnews.go.com/Business/credi...ory?id=8357735

ST, I applied for a bank-issued credit card late last year and I was turned down because I didn't have enough of a credit history, despite student loan payments and car loan payments over the last 7 years. My efforts probably were not helped by the fact that I don't have any income because I am a grad student. But you need to use your cards on a regular basis in order to have a varied credit history. I just need someone to take a chance on me and give me the card so I can create the varied credit history, lol.

[MarissaNicole]

When I was in college I got an email about making some money so I went to the meeting...I can't remember the details but I made several hundred dollars for getting friends to APPLY for credit cards. They also gave me gifts to give to the people who filled out the credit card applications. My friends were willing (didn't know that applying for credit cards can effect your credit at the time) and I made some money.... okay hijack over...

what about Discover? I love our card, we charge everything and rack up 1-5% cash back on all our purchases.

[bokelley]

We use our Discover ten times more than any other card. We use our AMEX card for travel and Costco! Everything else is Discover! I love the customer service and the rewards (cash back)

[MDPhDWife]

Definitely don't close the card you don't use! You can destroy it, but don't close it. Michele is right about it being a part of your credit use ratio. By closing the card, your score will drop because of lack of history & it doesn't help your ratio.

I'm sure it's a lack of proven history that's keeping you from getting approved.

I've never applied for an Amex before because I don't like paying annual fees. The only card I'll pay an annual fee on is my SWA Visa through Chase. It's only $49 & we pay DH's tuition with it & pay it off with the loan. The tuition alone gives us a couple of RT tickets so it makes it worth the $49. Most Visas have purchase protection plans already included, but I'm not sure how they compare with what AMEX offers. It would warrant looking into.

I got my first credit card at Macys when I was 16. I lied to cashier about my age because I wanted the discount & to my surprise got approved! Thank goodness I was smart enough at 16 to pay the bills diligently. By the time I was 18 I bought my first house. Crazy how easy it was to get credit back then!

[MissCrabette]

I've never applied for an Amex before because I don't like paying annual fees.

If you have a Costco membership, there is no fee for their American Express card. We only got it last April, and we got a nice rewards check for using it. Sure, we bought 6 RT tickets for interviews during that time, but that still only counts the activity starting in April, so it more than evens out.

And please, PLEASE, don't close your oldest account. Michele and MDPhDWife are right. Your score will drop if you close it, and you'll be considered more of a credit risk because you'll have less credit history.

[Michele]

Our Starwood (hotel points) AmEx is $50/yr.