Credit Primer & Discussion w/ JL
What is this thread: This thread is meant to be a collection of information and discussion about credit. Your credit is one of your greatest assets; unless you plan to live the rest of your life paying cash for everything. There's a good chance you will need to leverage your credit rating to buy a car or a house at some point. How you handle your credit will determine if you qualify for a loan, what your interest rate will be, and ultimately how much you actually end up paying for that house or car.
I am not an expert, and this is not meant to be an "Ask me about..." thread.
Why is there this thread: There is a great deal of misinformation and misunderstanding about credit, how to establish it, how the scoring works, etc. I have seen people on 2p2 talk about building credit in nonsensical ways. I have talked to my friends who are deathly afraid to open a credit card because of how it will affect their credit score. Invariably, my friends don't actually know the value of their credit score when they say this.
Who am I: I'm just a guy on the internet. I don't work in finance, in fact I make cosmetics for a living. In the last year, I have taken on credit cards as one of my new hobbies, with the goal of reaping rewards in the form of cashback, frequent flier miles, hotel points, etc. Since April (2012) I've opened 12-15 new credit cards. I've monitored my credit score. My only qualifications are that I've read a lot about credit and how it works, and I've seen the impact leveraging my credit has had on my FICO score.
Where I am lacking: I was fortunate to have a credit history established for me when I was younger, and to have good credit by the time I got interested in credit card rewards. I have helped friends write "good will" letters to have late payments removed, but I have very little experience with removing negative tradelines from credit reports. If your credit is in shambles and you're looking to repair it, go to [B]www.creditboards.com[/B] and spend several days reading.
9 Replies
This hasn't been bumped in so long. I thought about this thread today when I received an email for a new Southwest Card that gets me a Companion Pass plus 30k points. Most of my travel is solo, so I'm probably not going for it, but thought I'd come bump this and see what CC bonus' I might be missing out on.
I have a visa that I never use except for emergencies and they just started 3% on food so now it's every restaurant and grocery store. In three months I now have 17k points. nice.
Not for everyone, but one of my favorite combos these days is $100k+ in a Merrill Lynch Self Directed account which opens up platinum preferred rewards and gets a 75% uplift on credit card points earned.
This makes their 1.5x everywhere cards earn 2.63% on all purchases which is the best return out there for un-bonused spend.
It also makes their "3% on selected category up to $2500 spend/quarter" cards earn 5.25% in that category. One of the categories you can choose is 'online shopping' which covers pretty much everything. I earn a decent pile of cashback between these cards on spend that would otherwise earn 1-2x with other cards.
But in terms of big bonuses, there are still a ton. I'm currently working on the 150k bonus for the Amex Biz Platinum
I got mad at Amex and closed all of their cards about a year and a half ago. Any idea how long before I'm elegible for the same bonus', if ever? I had them for a pretty long while, so it's not like I closed them right after hitting the spend.
Amex is "lifetime" but it seems to vary what lifetime means. In one case for me it meant 7 years. But Amex also has "the popup" now, which is actually great. If you start applying for a card for which you will not be eligible for the bonus, a window pops up when you hit apply and tells you, so you have nothing to lose.
JL/All,
Any specific card or general credit advice for a current early 20's just out of college with a steady job?
I’d tell him if he has to order a grilled cheese then make sure he uses the cc with the most restaurant rewards.
😀 its the other one, but solid advice nonetheless!
JL/All,
Any specific card or general credit advice for a current early 20's just out of college with a steady job?
Check their credit score, if 730+ or so get a good rewards card, if lower, get a basic rewards card. Start with one that checks a lot of boxes based on current spend, like a flat 2% or a rotating 5% card, or amazon prime card (which surprisingly is not bad for gas and restaurants etc).
Don't complicate things at the start or go super flashy without knowing what they're trying to achieve. Most people are probably better being uncomplicated.
