Credit Card Assistance please!

[gibbow]

I was wondering, does opening 2 credit cards within a weeks time look significantly bad for me?

I recently started working a "real job" with an adult salary. I just opened a discover for cash back and am considering applying for an airline credit card for bonus miles. As I now live across country from family, I figure it would be worth it paying less than $2 per week, for priority boarding, free checked bags, and bonus miles since I will now likely travel home during major holidays. And hopefully use miles to lessen the out of pocket cost of vacations.

My question is, as a young adult who already has a basic credit card from before college (opened 5 years ago), would this hurt my credit applying for 2 cards within such close proximity.

On a side note, I will hopefully be purchasing a car within the next 1-6 months, do not carry a credit card balance, and pay my card bills on time.

Any suggestions?

Cheers!

 

[Marionnette]

I was wondering, does opening 2 credit cards within a weeks time look significantly bad for me? I recently started working a "real job" with an adult salary. I just opened a discover for cash back and am considering applying for an airline credit card for bonus miles. As I now live across country from family, I figure it would be worth it paying less than $2 per week, for priority boarding, free checked bags, and bonus miles since I will now likely travel home during major holidays. And hopefully use miles to lessen the out of pocket cost of vacations. My question is, as a young adult who already has a basic credit card from before college (opened 5 years ago), would this hurt my credit applying for 2 cards within such close proximity. On a side note, I will hopefully be purchasing a car within the next 1-6 months, do not carry a credit card balance, and pay my card bills on time. Any suggestions? Cheers!

Any "hard pulls" on your credit report can go against you when you apply for a loan. Too much available credit sends up a red flag to lenders and applying for a lot if credit in a short period of time also is a warning.

If you're positive that you will be applying for a car loan soon, my advice is to hold off on the airline credit card application until after you've gotten the car.

 

[msmama]

If you will be financing the car, I agree with the person above. If you're paying "cash" for the car then it probably wouldn't matter.

Also, the only time it's ever been mentioned to me about "too much credit" is when buying a car (nobody cared when buying a house or refinancing or having home equity loan or anything else). I think car dealers may use anything at their disposal to avoid giving you the best deal.

 

[MomToOne]

How much any hard pull affects you depends on what your credit score was to start with.

I suggest going to a site like CreditKarma.com (it's totally free) - they have a simulator that lets you see how different actions will affect your credit score.

 

[ssawka]

If you will be financing the car, I agree with the person above. If you're paying "cash" for the car then it probably wouldn't matter.

I would never pay "cash" for a new car, unless it was a rebate or special financing offer. Often the manufacturers will offer better deals if you are going to finance through them. Even if you have the cash, see what the offer is for financing. You can always pay it off the first month.

 

[tvguy]

I would never pay "cash" for a new car, unless it was a rebate or special financing offer. Often the manufacturers will offer better deals if you are going to finance through them. Even if you have the cash, see what the offer is for financing. You can always pay it off the first month.

Okay, I am missing something. Yes, they might sell you the car at a slightly lower price if you finance thru them, but they more than make it up on the commission from the lender, and you will of course pay more because you have paid interest on the loan. I have never seen a car purchase where the final paid off price was lower by financing.

 

[JediBonas]

Okay, I am missing something. Yes, they might sell you the car at a slightly lower price if you finance thru them, but they more than make it up on the commission from the lender, and you will of course pay more because you have paid interest on the loan. I have never seen a car purchase where the final paid off price was lower by financing.

We just recently got a rebate by financing through their credit company AND 0% financing. Definitely saved money by financing, plus not paying cash keeps our money in our savings account earning interest.

 

[tvguy]

We just recently got a rebate by financing through their credit company AND 0% financing. Definitely saved money by financing, plus not paying cash keeps our money in our savings account earning interest.

What automaker? Not sure how they can afford to give a rebate and zero percent financing. Yeah, that whopping .05% interest you'll get in the bank, or the .5% you'll get with a 4 year CD. Sadly, I remember in 1977 having $5,000 in savings from my college summer job, and locking it up in a 6 month CD at 16%.

 

[JediBonas]

What automaker? Not sure how they can afford to give a rebate and zero percent financing. Yeah, that whopping .05% interest you'll get in the bank, or the .5% you'll get with a 4 year CD. Sadly, I remember in 1977 having $5,000 in savings from my college summer job, and locking it up in a 6 month CD at 16%.

Ford. It might not be a lot, but it's still a benefit of using their financing (if you qualify).

To the original poster: I agree with many of the others regarding holding off on the credit cards (or at least one of them) until after your car purchase.

 

[gibbow]

Thank you all for your input!

I think I'll be postponing getting an airline card. I do not charge much, and having good credit for the car is more important.

I plan to put a decent amount down on the car and financing the rest, so the best interest rate is a top priority.

I do appreciate all of the advice!

 

[sweetdana]

Thank you all for your input!

I think I'll be postponing getting an airline card. I do not charge much, and having good credit for the car is more important.

I plan to put a decent amount down on the car and financing the rest, so the best interest rate is a top priority.

I do appreciate all of the advice!

I am in the mortgage business and have been for over 10 yrs.

1-2 small credit cards with no balances, make very little difference to your credit score. If your credit pre-credit cards was over 700 there is no reason to wait, if you want it. If you already have 4-5 cards, I would hold off 6 months then 6 it, no reason to add credit inuires.

If you are below 700, than even 10-20 points can certainly effect pricing, so based on wanting the car loan, I would concour you are making a better decision.

CONGRATS on the job!

 

[GrnMtnMan]

1-2 small credit cards with no balances, make very little difference to your credit score.

Plus, people make too big a deal about minor fluctuations in credit scores. I kind of feel that some people take some sort of personal pride in their score(s), treating them like grades, as if a 750 will get them into Harvard, but a 680 means they'll be going to State U.

The truth is that lenders group people into buckets of scores, and minor fluctuations (up or down) won't be moving you from one bucket to another. It would be very unusual for credit inquires to cause you to move from one bucket to another, unless you actually end up taking out credit from those inquiries.

 

[ssawka]

Okay, I am missing something. Yes, they might sell you the car at a slightly lower price if you finance thru them, but they more than make it up on the commission from the lender, and you will of course pay more because you have paid interest on the loan. I have never seen a car purchase where the final paid off price was lower by financing.

Yes, this is true but there is nothing preventing you from paying off the loan early. They may give you a lower price because they figure they will make it up on the financing. However if you pay it off immediately, they never collect that interest.

 

[DOREEN1779]

We just recently got a rebate by financing through their credit company AND 0% financing. Definitely saved money by financing, plus not paying cash keeps our money in our savings account earning interest.

I bought a new explorer a couple of months ago. I was offered the 0 percent. Through Ford credit but Bank of America was offering 1.9 percent with a $3000 incentive to finance through them. I was financing $20,000 so the BOA deal was better.

 

[lost*in*cyberspace]

What automaker? Not sure how they can afford to give a rebate and zero percent financing. Yeah, that whopping .05% interest you'll get in the bank, or the .5% you'll get with a 4 year CD. Sadly, I remember in 1977 having $5,000 in savings from my college summer job, and locking it up in a 6 month CD at 16%.

Those were the days!

 

[gibbow]

As a kid I mowed lawns around the neighborhood and got a CD from the local bank once I had reached 1000%, even 6-7 years ago I was getting between 4 and 6% interest...now I get more putting it into a credit union account.

I'm trying to look long term as much as I can without growing up too quickly. I already put 20% of each paycheck into a separate account I hopefully will not touch and eventually move into a retirement investment of some safe sorts. But once I cease living out of hotels (I'm out traveling on the company dime at this point) I will need a car, so I will have a car payment and expenses on top of eventual housing costs... I'm saving as much as I can now to lessen the burden. Hopefully I will have enough to put a sizable down payment down to reduce any financing.


So for now, I will be putting that credit card application on hold as per all of your most appreciated advice!


And then comes a vacation fund!

 

[lauradis]

As a kid I mowed lawns around the neighborhood and got a CD from the local bank once I had reached 1000%, even 6-7 years ago I was getting between 4 and 6% interest...now I get more putting it into a credit union account.

I'm trying to look long term as much as I can without growing up too quickly. I already put 20% of each paycheck into a separate account I hopefully will not touch and eventually move into a retirement investment of some safe sorts. But once I cease living out of hotels (I'm out traveling on the company dime at this point) I will need a car, so I will have a car payment and expenses on top of eventual housing costs... I'm saving as much as I can now to lessen the burden. Hopefully I will have enough to put a sizable down payment down to reduce any financing.


So for now, I will be putting that credit card application on hold as per all of your most appreciated advice!


And then comes a vacation fund!

If your living most off the company dime for housing and not supporting a house some where else, I would be saving more then 20 percent into long term savings.

 

[gibbow]

If your living most off the company dime for housing and not supporting a house some where else, I would be saving more then 20 percent into long term savings.

Oh I am saving nearly all of it. I just have been putting that 20% into something separate to not touch hopefully for retirement.... Figured, if I get into the habit now, it'll only grow in the future!

 

[msmama]

I would never pay "cash" for a new car, unless it was a rebate or special financing offer. Often the manufacturers will offer better deals if you are going to finance through them. Even if you have the cash, see what the offer is for financing. You can always pay it off the first month.

My car is 7 years old now, but back when I was shopping around it wasn't uncommon for lenders to charge penalties for early pay off for exactly that reason!!

 

[elgerber]

My car is 7 years old now, but back when I was shopping around it wasn't uncommon for lenders to charge penalties for early pay off for exactly that reason!!

When we bought my husbands car last year, they actually encouraged us to do that. We didn't pay it off in cash, but refinanced it to a much lower rate. it was the dealers idea and they took care of all of it. So we got the higher rebate, and then the lower rate. We had to make 3 payments with the auto company financing and then they didn't care.