Credit Card and Med school

[Maali]

Alright well I'm a freshman in college and have been applying to several credit cards. I would like to have very good credit so that when I apply for loans it will help out. I don't know anything about loans or credit cards or how that process goes, but logically I'm thinking that it would benefit me to have a excellent credit score. Anyways, I've applied to about 4 credit cards and most are accepting me since I have a 'thin file' or basically no credit history. Is it okay to open up that many credit cards. I will only probably be spending 30$ on each one a month and paying it off immediately. I don't plan on doing anything than buying lunch and stuff of that sort here and there w/ my credit cards. Also if anyone has tips on how to increase my credit score in a quick way feel free to give me advice. It's much appreciated. Thanks!

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[DrEnderW]

Alright well I'm a freshman in college and have been applying to several credit cards. I would like to have very good credit so that when I apply for loans it will help out. I don't know anything about loans or credit cards or how that process goes, but logically I'm thinking that it would benefit me to have a excellent credit score. Anyways, I've applied to about 4 credit cards and most are accepting me since I have a 'thin file' or basically no credit history. Is it okay to open up that many credit cards. I will only probably be spending 30$ on each one a month and paying it off immediately. I don't plan on doing anything than buying lunch and stuff of that sort here and there w/ my credit cards. Also if anyone has tips on how to increase my credit score in a quick way feel free to give me advice. It's much appreciated. Thanks!

If you're taking out federal loans in med school, your credit score doesn't have any bearing on your interest rate. It's set by congress and fixed for all students. As long as you don't actively have an abysmal credit score you'll be fine for med school loans. Personally, I've never heard of it being a problem for anyone.

I don't think SDN is the place for financial advice... but that there's no need to have 4 credit cards with minimal income spending $30 a month. It's actually more likely that all those inquires will bring your score down in the short term haha.

 

[mcloaf]

I see no upside to having four credit cards you barely use. I didn't have any trouble getting med school loans and I don't even have a credit card (I've paid off a car loan, but that's it).

 

[EnergyDrink]

Multiple credit checks hurt your credit, especially when they're condensed. Many cards do soft checks which don't hurt your credit, but as a first time applicant, I'm not sure if that's true. (Pre-approval is a soft check)

Whatever card you choose, you'll have for a while, so pick one with good benefits. Building credit takes a long time, there are no shortcuts.

You don't need more than 2. Use them, pay them off immediately. Ask for credit raises when you're eligible.

When you build your credit, then apply for a better card. Keep your older cards, as they show a track record of good credit.

FYI: Keeping a balance on your card does not help your credit.

It probably won't affect your ability to get loans for school. Gradplus is credit based, but as long as you didn't default in the last year or something, you're good.

 

[Mr Avante]

Alright well I'm a freshman in college and have been applying to several credit cards. I would like to have very good credit so that when I apply for loans it will help out. I don't know anything about loans or credit cards or how that process goes, but logically I'm thinking that it would benefit me to have a excellent credit score. Anyways, I've applied to about 4 credit cards and most are accepting me since I have a 'thin file' or basically no credit history. Is it okay to open up that many credit cards. I will only probably be spending 30$ on each one a month and paying it off immediately. I don't plan on doing anything than buying lunch and stuff of that sort here and there w/ my credit cards. Also if anyone has tips on how to increase my credit score in a quick way feel free to give me advice. It's much appreciated. Thanks!

credit scores at your age and position don't matter

 

[thesauce]

If you're taking out federal loans in med school, your credit score doesn't have any bearing on your interest rate. It's set by congress and fixed for all students. As long as you don't actively have an abysmal credit score you'll be fine for med school loans. Personally, I've never heard of it being a problem for anyone.

I didn't get the sense he was talking about student loans. Personal credit will help with car loans, etc.

OP: 4 cards is fine. It will give you a low utilization to available credit ratio, which is good. Credit score is actually pretty complex with a lot of false/counterintuitive information out there. I agree with others that this probably isn't the best place for this advice. Boggleheads, etc would be better.

 

[LizzyM]

Multiple credit checks hurt your credit, especially when they're condensed. Many cards do soft checks which don't hurt your credit, but as a first time applicant, I'm not sure if that's true. (Pre-approval is a soft check)

Whatever card you choose, you'll have for a while, so pick one with good benefits. Building credit takes a long time, there are no shortcuts.

You don't need more than 2. Use them, pay them off immediately. Ask for credit raises when you're eligible.

When you build your credit, then apply for a better card. Keep your older cards, as they show a track record of good credit.

FYI: Keeping a balance on your card does not help your credit.

It probably won't affect your ability to get loans for school. Gradplus is credit based, but as long as you didn't default in the last year or something, you're good.

qft

One or two are good. You will need them (and a pot of money to pay them off) when you go into your application year so having a track record of 2-3 years will be good as you can ask to raise your credit limit so you can afford secondary fees, travel expenses, interview clothing, etc.

Bottom line for a good credit rating -- live below your means and pay your debts on time. Taking out a bunch of credit cards is treated like borrowing up to your limit on each one but that shouldn't matter at this point as you are far from applying for a mortgage, etc. Just to keep things simple, you might want to pick the two cards with the best terms and drop the others.

 

[thesauce]

One or two are good. You will need them (and a pot of money to pay them off) when you go into your application year so having a track record of 2-3 years will be good as you can ask to raise your credit limit so you can afford secondary fees, travel expenses, interview clothing, etc..

If he gets multiple cards now, he won't need to ask for a credit limit increase in the future, as the limits across cards would likely suffice. It's a "pay me now or pay me later" situation with regard to the credit inquiry.

Taking out a bunch of credit cards is treated like borrowing up to your limit on each one.

This is not true. What is looked at is your utilization:credit available ratio. Which is the reason that credit score often goes up when you open a new credit card.

To keep things simple, you might want to pick the two cards with the best terms and drop the others.

BAD IDEA. If he closes the cards now, it will decrease the average age of his credit accounts, which will HURT his credit. If his cards have high annual fees, he either got them waived or paid them already, in which case it's best to close them just before they come due again so he at least gets a year of credit age out of them. If they don't have annual fees, might as well sock-drawer them forever as they will improve his utilization:credit available ratio and he may even have need for them later (during application season as you mentioned).

OP: once again, I recommend boggleheads personal finance forums.

 

[Status Sciaticus]

anyone got recommendations on which credit cards have the best benefits?

So far, I've looked at the Amex Blue and the Chase Sapphire.

 

[thesauce]

anyone got recommendations on which credit cards have the best benefits?

So far, I've looked at the Amex Blue and the Chase Sapphire.

It really depends on what you're looking for (straight cashback vs. airline/hotel miles/points vs. purchase protection/other perks, etc.) It also depends on where you tend to spend money (grocery vs. department stores vs. eating out, etc).

 

[Mr Avante]

anyone got recommendations on which credit cards have the best benefits?

So far, I've looked at the Amex Blue and the Chase Sapphire.

Chase Freedom or Slate are perfect. I have used both for quite few years. However, I prefer to use debit 9/10 🙂

 

[thesauce]

Chase Freedom or Slate are perfect. I have used both for quite few years. However, I prefer to use debit 9/10 🙂

Perfect in what way? Why do you prefer to use debit?

 

[Status Sciaticus]

It really depends on what you're looking for (straight cashback vs. airline/hotel miles/points vs. purchase protection/other perks, etc.) It also depends on where you tend to spend money (grocery vs. department stores vs. eating out, etc).

I have the Amex gold charge card and it gives me the purchase protection/other perks and points.... so im looking for a credit card along those lines.

 

[Mr Avante]

Perfect in what way? Why do you prefer to use debit?

No annual fee, low introductory rate, purchase protection - the perfect credit card for the common user. I don't get sapphire because I don't travel very often nor dine at restaurants every week.
I prefer to use a debit card because it is my own personal money and therefore I have more control on what I buy.

 

[thesauce]

I have the Amex gold charge card and it gives me the purchase protection/other perks and points.... so im looking for a credit card along those lines.

AMEX points and Chase Ultimate Rewards are among the most valuable points and can be redeemed in numerous ways. AMEX has the best perks.

 

[thesauce]

No annual fee, low introductory rate, purchase protection - the perfect credit card for the common user. I don't get sapphire because I don't travel very often nor dine at restaurants every week.
I prefer to use a debit card because it is my own personal money and therefore I have more control on what I buy.

Both good cards for the common consumer, I agree.

Unless you're one to carry a balance, using debit is just leaving money on the table in terms of rewards. The most concerning thing to me, though, is the lack of protection in terms in terms of fraud, etc. If someone steals your credit card, Visa/MC/AMEX will just reverse the charges and issue you a new card. If someone racks up charges on your debit card, it can be a nightmare getting your money back from the bank.

 

[Mr Avante]

AMEX points and Chase Ultimate Rewards are among the most valuable points and can be redeemed in numerous ways. AMEX has the best perks.

Yes. I had the opportunity to use a centurion card, which I received from my employer, for 1 week. The benefits are without doubt the best. However, I always get the feeling amex is too much for me.

 

[Mr Avante]

Both good cards for the common consumer, I agree.

Unless you're one to carry a balance, using debit is just leaving money on the table in terms of rewards. The most concerning thing to me, though, is the lack of protection in terms in terms of fraud, etc. If someone steals your credit card, Visa/MC/AMEX will just reverse the charges and issue you a new card. If someone racks up charges on your debit card, it can be a nightmare getting your money back from the bank.

Yes, I understand. It is somewhat bothersome because it has happened to me in the past. If you prefer to save yourself from the hassle a credit card is the only option. I spent 2 hours at the bank before getting my case resolved. Nonetheless, Chase did the work.

 

[Status Sciaticus]

AMEX points and Chase Ultimate Rewards are among the most valuable points and can be redeemed in numerous ways. AMEX has the best perks.

I had already decided between one of the two..

The issue is that AMEX is partnered with Delta for their credit card... and its a crappy airline company.

 

[thesauce]

I had already decided between one of the two..

The issue is that AMEX is partnered with Delta for their credit card... and its a crappy airline company.

The Delta Card is one of many that AMEX offers and they reward you with Delta Miles (generally a poor value, I agree). The AMEX membership points (earned from the Gold, Platinum, etc) can be transferred to a number of partner airlines:

Air Canada Aeroplan, Singapore, All Nippon Airlines, British Airways, Iberia, Cathay Pacific, Delta, Air France/KLM Flying Blue, Alitalia, Aeromexico, Virgin America, Virgin Atlantic, El Al, Frontier, JetBlue, Hawaiian Airlines

Also look into the AMEX SPG card. It gives you the option of booking with hundreds of airlines without blackout dates.