Comments (55)

Aug 13, 2018

If they offer to raise your line of credit - TAKE IT
Also PAY YOUR BILLS

Seriously, I'm 19 and I currently have a pretty significant line of credit (more than my yearly income) and a score just shy of 800 - which I think is pretty good

Aug 13, 2018

As a 19 year old how much yearly income do you have?

May I ask how many cards you have and which cards you'd reccomend?

Aug 13, 2018

I only have 1 card currently. I buy everything on credit and pay it off every week (I'm trying to accumulate points). I definitely don't spend more than I have. That being said, if you know you will not be able to pay the full payment make sure you at least pay the minimum.

Last year I made approximately $40k (with RESP withdrawal). I worked full-time during the summer and part time during the school year.

Aug 13, 2018

Get at least one credit card but don't carry a balance unless you absolutely need to and pay your bills on time.

Aug 14, 2018

Unless you get a 0 percent intro rate in which case you should hold the cash in a high yield Savings until your intro rate period is over.

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Aug 13, 2018

set an auto pay for the minimum payment every month (incase you forget a due date you wont get a late payment)
Pay off every month
Seldom use

Aug 13, 2018

I'm a first year analyst, i make over 100k and have never used a credit card in my life. Chase sends me an offer for their shitty credit card and i decide its a good time to build credit and they fkin deny me. why are you sending me shit just to deny me.

any advice on what to do? i had to tell my apartment lady to call up HR so they know my base is 85 and i can afford the apartment. but i dont want to do this for my next location.. and i want to own a vehicle one day. Using the Bird electric scooter to dry clean my pants on the weekend is getting old.

What concert costs 45 cents? 50 Cent feat. Nickelback.

Most Helpful
Aug 13, 2018
Jamie_Diamond:

I'm a first year analyst, i make over 100k and have never used a credit card in my life. Chase sends me an offer for their shitty credit card and i decide its a good time to build credit and they fkin deny me. why are you sending me shit just to deny me.

any advice on what to do? i had to tell my apartment lady to call up HR so they know my base is 85 and i can afford the apartment. but i dont want to do this for my next location.. and i want to own a vehicle one day. Using the Bird electric scooter to dry clean my pants on the weekend is getting old.

Get a Capital One or a Discover card. You're getting denied because you have no credit history at all. To clarify, what you're receiving in the mail is an Invitation To Apply. It's not a Pre-Approval. They haven't pulled your credit bureau information before they send you this. When you go to apply, they pulled your credit bureau data and no history came up so you got denied. The bank doesn't know beforehand that you have no credit history because you're just a name and contact info on a marketing list they purchased. In fact every time you cause them to get your credit bureau info it costs them money but obviously that isn't your problem. Also the bank doesn't magically know what income number you gave to your landlord...

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Aug 13, 2018

Go into a branch of whatever bank you have direct deposit with and ask one of the reps to help you apply for a card.

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Aug 14, 2018
Cov:

Go into a branch of whatever bank you have direct deposit with and ask one of the reps to help you apply for a card.

I second this. I have a dude at chase that helps me with all my applications. Idk why you are having issues with getting a chase credit card. Did you apply for the Sapphire reserved? Maybe you can start building your credit with Freedom Unlimited. Its a pretty solid card with 1.5% cashback on all purchase.

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Funniest
Aug 13, 2018
Jamie_Diamond:

I'm a first year analyst, i make over 100k

damnnnnnnnnn

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Aug 14, 2018

Was in the same boat as you starting out as an analyst - no prior credit cards, no student loans, etc. so no credit history. Got rejected for a freedom unlimited and instead got a citi secured credit card for ~6 months to accrue credit and then was able to get a better card after that

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Aug 13, 2018

Back in high school I wanted to start building my credit history, so I got a secured card where your limit is equal to some pile of cash you deposit to a reserve account. It's inefficient, but it works if you have zero credit history. Now I have my autopay set to pay the entire balance every month for my cards so I don't have to worry about it.

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Aug 13, 2018

I have four credit cards and I'm 29. Credit score is at like 804. I've had a credit card since freshman year of college. Building credit is definitely a smart thing to do. Make sure you pay your credit cards on time and make sure you use them every now and then. I made the dumb mistake of letting one of my oldest credit cards collecting dust and Chase ended up cancelling it and my credit score took a hit because of that.

Try using Mint. It'll tell you the best credit cards that you can qualify for and will give you info such as annual fees and perks.

Also, I don't spend a lot if you're wondering why I have four credit cards. But I do setup automatic billing like monthly memberships for gym, Apple Music, and Netflix and spread it around all of my credit cards to ensure my bank doesn't just cancel a credit card on me again because of no activity.

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Aug 13, 2018

I think that paying in cash and using credit cards minimally is likely a smarter thing to do, as you are less likely to overspend, run of debt, and have to pay off that debt at very high interest rates. The only drawback to cash is that it can be invested in financial securities to generate a higher ROI (e.g. investing at 7-8% annualized over 20 yr period vs. paying off debt at interest rate of 2-3% over 20 years). Obviously, one should strive to have no debt beyond possibly a mortgage, as debt is basically modern slavery imo.

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Aug 14, 2018

Use credit cards but also track a budget so you're not spiraling into the credit card trap. Don't listen to the people saying to use cash, if you can't handle having access to credit you'll never achieve an 800+ score regardless. Research the best card stacks to optimize reward points.

I pay my cards off in full every couple weeks out of habit. You should have a 3-6 month rainy day fund of cash anyways so I wouldn't worry about trying to optimize cash flow (what are you going to do, earn 0.01% in a savings account for the extra two weeks? Congrats on optimizing your way to an extra $0.25/year). My credit score is above 800 at 25.

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Aug 13, 2018

Having a high credit score is good, but what is the point of it if an individual never has to obtain credit in the first place to purchase any form of consumer good (clothing, food, mortgage, etc.)?

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Aug 14, 2018

You certainly need it for a mortgage...

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Aug 14, 2018

As you getting older, you have to have revolving debt that you are paying off responsibly, otherwise they don't want to top-score you. My credit score had actually fallen since I paid off my mortgage some 5 years ago, despite the fact that I probably spend over a 100k on my Amex every year. To be honest, I don't care.

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Aug 14, 2018

I used to have like 10 credit cards each with USD 1,000 limit and I managed to max them out. I thought I was trying to improve my credit scores by slowly adding credit cards and maintaining the balance. One thing leads to another, I end up maxing out. And then got unemployed and went broke - then the monthly minimum payments keeps increasing.

In the end, had to borrow from my family to pay off so that the high interest rates don't keep adding up the balances. Credit cards make you get into debt without knowing it. I think as human being, we feel a lot different handing over a physical 10 units of USD 100 bills - compared that to swiping a credit card for USD 1,000. And that made me wanted to spend more money. So I would stay off that.

Now I still have credit cards, but I only use them 1) when I want to buy things online, 2) when I am traveling and don't want to carry cash, and 3) when I am in an emergency situation and where they don't accept cash (i.e. China with mobile payment linking to your bank/card account). Other than that I pay everything in cash.

Compared to previous 10 cards for USD 10,000 limits now I only have 3 cards for USD 20,000 limits but zero balance on them. Average credit score is 758, based on three different credit agencies that give a monthly FICO scores of 793-740-740. 33 here, been using credit cards since 18 - when I first started undergraduate.

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Aug 14, 2018

Having (3) cards is a good balance in terms of activity and FICO scoring. The catch though is if all (3) report a zero balance each month then the FICO model says you are not using revolving credit so therefore your score goes down a few points. So keep (3) cards, let (2) report with zero balances and the other report a balance of $75-$100 or so.

I'll save the rant of paying off a mortgage and then your score goes down.

Get your facts first, then you can distort them as you please.

Aug 14, 2018

1) As a minimum, hold 2-3 cards and use one as your primary and set some recurring and low-cost monthly bill to be paid by your non-primary cards. Pay off the balances each month. You can use all cards if you want to maximize points/cash back by spending categories etc, but at a minimum just make sure you aren't inactive on any of them. Also, don't listen to advice saying that you should carry a balance on your card. Doing so does not improve your scores any more than paying it off each month and consequently forces you to pay unnecessary interest fees.

2) Get an auto loan (if you don't already have a mortgage). Make a very large down payment and take a full 60 month term so you're paying <$100 per month. Don't pay it off early and just set your payments to auto-pay so you don't have to worry about it.

With this setup, you build both revolving (credit cards) credit and installment (loan) credit. It's tough to crack the 800 mark with only one or the other, as lenders (and the algorithms behind credit bureau scores) like to see good history with both types.

Source: myself, intimately familiar with consumer credit.

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Aug 14, 2018
OverTheHedge:

With this setup, you build both revolving (credit cards) credit and installment (loan) credit. It's tough to crack the 800 mark with only one or the other, as lenders (and the algorithms behind credit bureau scores) like to see good history with both types.

Mkay, so maybe I am being silly, but it sounds like one has to pay for good credit score via interest payments. Do you think the PV of the future savings from having a top credit score exceeds the PV of these additional payments?

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Aug 14, 2018

With credit cards, you can avoid paying interest altogether if you pay off your balance each month. To build installment credit history, you need to demonstrate that you can manage installment loan type obligations. Sure, that necessitates paying some interest, but how much you pay is controlled by you and again, paying more interest will not increase your score more than paying less interest will.

To answer your PV question, compare the interest you pay on a $1k auto loan at 6% over 5 years versus the difference in interest on a $400k 30-year mortgage with a 4% versus 4.75% rate. imo it's absolutely worth it.

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Aug 14, 2018

Best way to build credit is just to have one credit card and treat it like a debit card. Never spend more than cash you have in the bank, and always pay on time each month. It's also worth noting that building credit is a lengthy process that happens over several years.

Not having a credit card is literally losing free money given all the points you can accumulate. I've looked into "churning" credit cards, which essentially gets you mad points, but it's too cumbersome. At this point I have the trifecta of chase cards: sapphire reserve, freedom unlimited, and regular freedom. Each serve a different purpose in terms of spending so that I maximize points.

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Aug 14, 2018

Have two credit cards, 1 I never use, the other I always use. Combined about $25K in spending limit, but pay off each month. Also took out auto loan.

This after ten years gives me a credit score in the 810-815 range, which gives you the lowest rates when getting a mortgage.

Aug 14, 2018

Revolving credit is important as stated above but another component is paying off a fixed amortizing loan which I personally did not have. I was frustrated with my credit card limits/score in light of carrying no credit card balances and ended up taking a small-ish Upstart loan. This added to the depth of my credit history and ended up boosting my credit score significantly. Was the underwriting fee and financing costs worth it? Not sure over the long run but now my limits are way up and score is where it should be ~800.

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Aug 14, 2018

no churners here eh? The game is all about maximizing your points and hitting those sign up bonuses.

"I did it for me...I liked it...I was good at it. And I was really... I was alive."

Aug 14, 2018

Right? I have opened around 10 credit cards in the last 2 years closed 3 of themand between them have gotten from bonuses around 150k AMEX points 150k Chase points 200k Hilton points and over 100k AA points. With these points I have gone to Europe for free stayed at multiple Waldorf Astorias while on the trip for free got upgraded to the top floor executive room for free. Yeah there are Annual fees but I use the airline and travel credits.

I have a high credit score and a credit line of around 80k. I pay them off each month and keep a spreadsheet of how I am doing with bonuses/Payments. You can rack up points with bonuses and go do all the ridiculously expensive things (First class flights/Nice hotels) with your rewards points.

If you make any money at all get a Amex platnium or CSR reserve. If you are scared of a big annual fee get a Chase sapphire preferred.

Start saving those points, I am about to cash out my AMEX and Chase points for a first class flight on emirates airlines to DBX that retails around 8k USD each way....

Let me refer you if any of you guys are interested!

Aug 14, 2018

This is the approach I've taken. Definitely requires discipline and hard work but the payoff is totally worth it. Did a first class round trip on the nice Asian airlines two years ago with the mileage bonuses which was amazing - definitely not something I would have ever been able to experience otherwise.

Aug 14, 2018

When/how do you decide to close them? I am trying to build up the number of cards I get so I can get points for travel, but also don't want to continually pay annual fees on all of them.

Aug 14, 2018

Churning is almost a job in itself. Just get a solid card with something you value (cash back, miles, points), and then just use that. About 3-4 cards is good and the easiest for building credit it seems. Anything beyond that is overkill, although if you're in the points game then it can be worth the effort.

Aug 14, 2018

I don't think credit cards are the issue here...its the bad spending habits. I have about 12 credit cards, but have never had carried a balance and always pay them off, every month. I do this for the reward points and can say that it work, Ive travelled 8 times interantionally in the past 4 years and have never paid for a flight.

I also have a excellent credit score (800+) as my credit utilization is always < 3%. My only worry will be when I go to get a home loan, will my large credit line affect their decision to lend to me... not sure

If I didnt play the rewards game I would probably only have 1 cc

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Aug 20, 2018
Marti Kahn:

I have about 12 credit cards,

https://media1.tenor.com/images/40b968d5c9eb50fb907fc21b760d03b6/tenor.gif?itemid=3441119

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Aug 14, 2018

Excellent

Aug 14, 2018

First, as stated, make sure you have a solid budget.

Second, I'm not against credit cards, but doing think too much about it. It's great to get the rewards, play with transferring the balances, but I always advocate that your time could be used wisely elsewhere. You spend some time trying to get the credit card game in your favor, while the credit card companies spend night and day getting it in theirs. It's great to get free flights, and if you can manage it correctly do it, but at the end of they day much more people have lost wealth trying to play this game than people who have actually built wealth.

Again, I'm not against credit cards, my thing is, if you're trying to establish credit to accumulate wealth, just go full throttle into establishing wealth.

I tend to think of it like people who try to dab the grease off their pizza, I guess it cuts down calories, but its still pizza.

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Aug 14, 2018

Keep it simple:

1) Avoid interest payments on your credit card.

2) Pay all your bills on time. This alone will typically be enough to get you into very solid territory. All the other advice/tips/tricks probably aren't worth the effort unless you're about to buy a car/house and an improved score will get you a better interest rate.

3) A credit score is a tool. It doesn't put inches on your d---. If you avoid an otherwise sensible decision because a hard inquiry will temporarily ding your score, you're using your credit score wrong. Similarly, don't worry about your credit score too much if you're not planning to use it.

Aug 20, 2018
HighlyClevered:

Similarly, don't worry about your credit score too much if you're not planning to use it.

I've had potential employers make me agree to a credit check as well as buildings that I move into in the city (proof of employment, income, credit check, etc). You can get denied on things other than getting a mortgage.

I don't have bad credit or anything, but just want to note that it does come into play at times.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Aug 14, 2018

This is a fair point. But generally (I can't say always with certainty) those checks are to weed out people with very bad credit. Most people will never have to do anything but pay their bills on time to clear that low hurdle.

Aug 14, 2018

I have 6 - use 3 often and charge about 20k a month - mostly work related expenses... i pay them off monthly or within 6 weeks. Some were sign on bonuses i wanted or other sign up options i wanted. I travel a lot so points mean something to me. credit score in the 790s

Aug 15, 2018

Never carry a balance, if you can avoid it. Credit card debt is insidious. If you get in over your head, can literally take decades to pay off with the high interest rates.

Aug 15, 2018

Keep it simple.

Don't spend more than what you have. Keep charges below 30% on the credit cards (I spent close to 10-15% max). Pay the balance in full monthly (if you can, 2-3 days ahead of the due date).

Have money in the bank and limit your spending. Doesn't matter what your income level is. All that matters is personal financial responsibility.

No pain no game.

Aug 19, 2018

I've opened 22 over the last two years, closed 12, and plan on closing more in the coming months before they hit me with the annual fee.

Just classic churning -- I hit a sign up bonus and move on to the next. Have probably extracted $10k+ after tax benefit from hotels and flights from all of these. I spend the same as I would normally, but every dollar is going towards some sign up bonus that yields ~20%.

My score has steady stated at ~700 since the average age of my accounts is less than a year and inquiries on my credit only continue to rise as I apply for more, but this can be fixed in two years if I decide to stop churning tomorrow. Don't have a near term need for a mortgage, car loan, or other large facility so it doesn't worry me one bit.

Aug 14, 2018
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Aug 19, 2018
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Sep 10, 2018