Hello! I am currently a junior in college. I have about $6,000 in subsidized stafford loans and two credit cards, which are paid in full each month and I have never missed or been late on a payment. They are my own, not my parents' and I cover all living expenses with my own money. ---The first card is a Wachovia Visa Preferred at 7.9 fixed APR on purchases with no annual fee and $5,500 limit. Very basic card, no rewards or anything, just a low APR. I charge one purchase every month or two to keep it up. I have had it for two years. ---The second card is Citi Dividend Platinum currently at 10.99% APR (9.24 variable + Fed Rate) with $3,000 limit. I use this card for everything, because it gives me cash back and has no annual fee. I have had it for a year. Credit scores were all 718+ when I last checked three months ago. I just got a pre-selected letter for AMEX blue for their 5% cash back card with no annual fee and a 10.74 fixed APR and I was thinking about accepting it, but then I started thinking. I will probably graduate with (HOPEFULLY) less than 15k in loans from my undergard school, which isn't too bad for a 40k per year college (grants, scholarships, work-study, and parents). Most of these loand will be subsudized, so I won't worry about payments for awhile. However, I will eventually have to start making payments, regardless of whether it will be after college or law school. Since I don't think I will ever need more than 3 credit cards, I am thinking of saving my last slot for a credit card for later, so that I can use the introductory 0% balance transfer to transfer the loans and save some money. Another option is to cancel the Wachovia, and get the AMEX but since it has the lowest APR and is also the oldest credit line, I am feeling uneasy about doing that. What are your expert opinions? Thanks in advance!!
I would get the card but sock drawer it for emergencies only. The repay amount on SL is very low, plus other benefits. ALSO DO NOT CLOSE ANY OF YOUR CREDIT CARDS!
I agree. You appear to be able to handle credit responsibly, based on paying of your cards every month, which shows in your high scores. Gradually establishing broader credit history showing responsible usage with increasing credit but low balances will improve your FICO scores resulting in increasingly competetive credit offers. Don't apply for a bunch of cards, just select the best terms, based on rates being better than what you already have, and screened by the reliability of the creditor. No more than one new account every 6 months should have minimal impact on your scores. The initial 0% teaser rates are probably not enough to justify applying, if the other normal terms are not competetive. With good scores, and low balances, a prime card with a good bank will likely result in good terms on balance transfers to existing cards. Although you may only need 2 cards to actually use, for diversifying the risk of bank mergers, and to maximize the possibility to BT to another card on good terms, you may eventually want one or two more. Department store cards with their high rates are a waste of time. Long credit history with "pays as agreed" will position you for good terms when you need a mortgage to buy a house.
