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SuperOwls Feb 16th 2011 8:48 pm

Credit Card Advice
 
Hi All,

Asking for your opinion on something. Have been in the US 6 months and have credit lines already open from VW on 2 lease cars and a Credit Card from HSBC.

Just had my credit score done on the 3 main companies and i average 700 between the 3.

Do you think it is worth applying for another credit card to keep building my history or do you think i should leave it another 6 months with what i have?

Any advice gratefully received.

fsm Feb 16th 2011 9:13 pm

Re: Credit Card Advice
 
I would leave it another 6 months before going for anything else, and make sure you do not run up more than 25% of your credit limit ont he current card.

cranston Feb 16th 2011 9:41 pm

Re: Credit Card Advice
 
I would get another card asap.

Either get a secured card from a big bank or (my preferred option) start a relationship with a good credit union.

Age of credit lines will make a big difference in the future. I do not agree with waiting.

tonrob Feb 16th 2011 10:42 pm

Re: Credit Card Advice
 
I agree. You may as well get a secured card and start some spending on that. Back when I got mine I purposely went for a low limit ($500) as I found it easier to routinely run up 25-30% of the credit limit each month (which seems to be the magic number by popular opinion).

tonrob Feb 16th 2011 10:46 pm

Re: Credit Card Advice
 

Originally Posted by fsm (Post 9181292)
I would leave it another 6 months before going for anything else, and make sure you do not run up more than 25% of your credit limit ont he current card.

Beware that some issuers don't report credit limits, only balances, to the agencies - so that if more of your credit portfolio is made up of this type of card then it can impact your balance/credit limit (utilization) ratio.

(In actual fact it seems that the agencies will treat the highest monthly balance for each card as the "limit" so it is possible to "work" this accordingly).

mmhendrie Feb 16th 2011 10:46 pm

Re: Credit Card Advice
 
take a google at building your Fico score.

You'll see that every application of credit takes a hit on your score, as it looks like you've desperately trying to get money. That said, having 5-7 lines of credit open for a good period of time (8-10yrs+) is typically regarded as a good place to be. Also, having lots of unused credit (low debt to credit ratio) is also a good thing for your score. So, applying for additional accounts now may mean your credit score takes a short term hit, but will set you up for a good score down the line, providing you manage it correctly.

These scores are key in this country. Having a bad one through one missed payment can have a crushing impact on your score, and add points to APRs for car loans, mortgages etc. which equate to hundreds and thousands in wasted dollars on interest. It's really worth putting in some work to maintain your score.

I've been here just over 13yrs now, and finally passed the 800 mark on my credit score this year. It takes time - you can get up around 730-740 relatively quickly (4-6yrs), which is the key place to be. Over around 730-740 most lenders will give you the best rate they have available. You probably are already paying 0.5% or more APR "penalty" on your car loans because of the 700 score - but early on, until you've had time to develop a good score, there's nothing you can really do about that, unless you can get a co-signer to the loan with a good score. Length of credit history is also a factor in the score, so to get the high numbers you basically have to keep playing ball and wait.

-Matt

Bob Feb 16th 2011 10:51 pm

Re: Credit Card Advice
 

Originally Posted by mmhendrie (Post 9181469)
... Also, having lots of unused credit (low debt to credit ratio) is also a good thing for your score. So, applying for additional accounts now may mean your credit score takes a short term hit, but will set you up for a good score down the line, providing you manage it correctly.

Double edged sword.

Have to much potential for credit and it'll also ding you badly because you have that potential to get that much in the hole, so having a couple of unused cards is good, having a bunch not so.

Also, score alone means nothing. It's actual credit history and varied lines of credit that have any meaning of worth when going for anything important such as a house mortgage.

SuperOwls Feb 16th 2011 11:32 pm

Re: Credit Card Advice
 
Wow, thanks for the advice everyone. Certainly got my head spinning. I had a quick look at creditcard.com. It has a tool where you can view which card will more than likely be accepted if applying. Think I will give one a go and see what happens. It seems everyone is advising to go for another line of credit so will give it a crack.

Anyone got any good recommendations on cards with good benefits that I should look at?

mmhendrie Feb 16th 2011 11:38 pm

Re: Credit Card Advice
 
yeah, this one is great:

http://www.officialfootballcreditcar...edit-card.html

sorry, couldn't resist!

I use AmEx, which i like, but many smaller places don't take, and isn't as international as Visa. It depends on your needs, if you think you'll be carrying a balance, then obviously look for low APR's - otherwise low or no cost cards that have rewards programs. Captial One do a lot of commercials pushing that line - I don't use them, but they might be worth a look in...

-Matt

SuperOwls Feb 16th 2011 11:41 pm

Re: Credit Card Advice
 

Originally Posted by mmhendrie (Post 9181572)
yeah, this one is great:

http://www.officialfootballcreditcar...edit-card.html

sorry, couldn't resist!

I use AmEx, which i like, but many smaller places don't take, and isn't as international as Visa. It depends on your needs, if you think you'll be carrying a balance, then obviously look for low APR's - otherwise low or no cost cards that have rewards programs. Captial One do a lot of commercials pushing that line - I don't use them, but they might be worth a look in..

-Matt

Thanks Matt but would rather have bad credit for the rest of my life than carry that filthy thing around in my wallet!

steve100100 Feb 17th 2011 2:00 am

Re: Credit Card Advice
 
It's all about history, for the most part. Having a wallet full of cards, even with zero balance, won't help you.

Forget the score, I had high 700's after a month of being here. Means nothing.

History. They need to see at least three years.

Your score is secondary. That's what my car finance guy told me. That's why I got hit with a high apr.

steve100100 Feb 17th 2011 2:02 am

Re: Credit Card Advice
 
Also, having bad credit history is better than having no credit history

mmhendrie Feb 17th 2011 7:13 am

Re: Credit Card Advice
 
<<Your score is secondary. That's what my car finance guy told me. That's why I got hit with a high apr.>>

maybe that's how he justified giving you a high apr ;)

Bob Feb 17th 2011 3:17 pm

Re: Credit Card Advice
 

Originally Posted by mmhendrie (Post 9182180)
<<Your score is secondary. That's what my car finance guy told me. That's why I got hit with a high apr.>>

maybe that's how he justified giving you a high apr ;)

It's true though, the score means nothing, it helps you get through the pre qualifying rubbish but it's the history behind it that'll get you a low score.

Fact of life till you've got a couple years of credit history that interest rates won't be those best advertised rates.

SuperOwls Feb 17th 2011 4:11 pm

Re: Credit Card Advice
 
OK thanks for the input everyone. I was accepted for a capital one visa card this morning with a grand total of $500 credit limit.

Very different to my HSBC one with a limit of $15k!!

Anyway, ideas on how i play these 2 very different cards or is it just the same principal. Between the 25-30% mark each month and pay it off?


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