My Thoughts on my Younger Brother's First App-O-Rama (2 out of 3 Credit Cards Approved) (2024)

Good morningeveryone, my younger brother (a recent UCLA graduate with a masters in engineering) had no credit cards 2 weeks ago. I would often get text messages from him late at night asking me to buy something for him on Amazon or to pay for his apartment’s electricity bill. He would then Venmo money to me for the exact amount that I paid. He would argue that he was helping me earn “points” and would guilt trip me into helping him. From a profit point of view, the “points” I would earn would be less profitable than 1 $500 VGC, therefore nota big deal to me.

Shortly after graduating and starting his first real job, he asked me to help him get a credit card. When I was home for the 4th of July weekend, I talked to him about credit cards. Even though he loves to travel (like his big brother), I told him to get a few cash back credit cards that have no annual fees (therefore you can keep them open forever). These credit cards will be the basis for his credit report and will help him establish relationships with the credit card companies. He commutes to work by car, so getting a gas credit card was a high priority. After comparing all the no annual fee credit card options, here were his final 3 choices:

Chase Freedom Credit Card

• Get a $100 bonus after spending $500 in 3 months (actually paid in 10,000 Chase Ultimate Reward Points).
• Get a $25 bonus after adding an authorized user to your card and making 1 purchase on that credit card.
• Get 5% cash back at rotating categories (Q3: gas stations and Kohl’s).

Discover It Credit Card

• Double cash back at the end of the year.
• Get 5% cash back at rotating categories (Q3: home improvement stores, department stores, and Amazon.com). (Gas was 5% cash back inQ1)

Bank of America MLB BankAmeriCard Cash RewardsCredit Card

• Get a $100 bonus after spending $500 in 3 months.
• 3% cash back at gas stations, year round.

[side note: my go to credit card for gas is my Old AMEX Blue, which offers 5% cash back at gas stations, year round, with no annual fee. The only downside is the $6,500 hurdle to activate the 5% cash back. My brother will probably spend about $6,000/year on credit cards, so I thought he should pass on this card. Plus, he lives at home and my parents do all the grocery shopping.]

After reviewing all the cash back details, I helped him fill out the online applications. I knew all his personal information except his SSN, so entering the info was very easy. After entering in the information for all 3 credit card applications, I submitted them all at the same time.

• Chase Freedom was instantly approved with a $13,000 credit line (he has been an authorized user on my mom’s Chase Freedom and my dad’s Chase Sapphire Preferred for almost 2 years).
• Discover It was also instantly approved with a $1,000 credit line (no previous banking history with Discover).
• Bank of America MLB BankAmeriCard went to pending. I google Bank of America’s reconsideration phone number (Doctor of Credit)and dialed the number. This was Sunday afternoon (not the best time to speak with a credit analyst) and the rep who answered the phone told him to call back in a few days to check on the status of the application.

I quickly learned that my brother is pretty awkward on the phone and doesn’t do a very good job of befriending customer service reps (essential if you want to get a positive result from the reconsideration call). Anyway, a few days later, he received his Chase Freedom Credit Card, Discover It Credit Card, and a denial letter from Bank of America. The denial letter said that his credit history was not long enough.

A few days after that, I get another text from my brother asking if I can buy him something online. Hello? You have credit cards now, use them! He tells me he hasn’t activated the credit cards yet and I walk him through the activation process. Here are the steps:

• Call the number on the sticker to activate your credit card.
• Tell the rep to enroll you in the rotating cash back categories (Q3 just started).
• Ask the rep to lower yourcash advance limit to $0 (you don’t want to accidentally get hit with a cash advance fee).
• Lastly, ask the rep to change the bill due date to the first of the month (so your statement closes sooner and you get your cash back rewards faster).

Apparently the Chase and Discover reps give him a hard time about lowering the cash advance limit and he forgets to ask about changing the bill due date (you can lead a horse to water, but you can’t make him drink). Since the Chase Freedom Credit Card has a $100 bonus after spending $500 in 3 months, I tell my brother to keep track of his purchases so he doesn’t miss out on the $100 bonus.

Here is some good brotherly advice (which everyone can use) to increase your credit score:

• Stay under 30% of your credit utilization ratio (Chase Freedom $3,900/$13,000 = 30%, Discover it $300/$1,000 = 30%) to increase your credit score.
• Better yet, stay under 10% of your credit utilization ratio (Chase Freedom $1,300/$13,000 = 10%, Discover It $100/$1,000 = 10%) to watch your credit score really go up.
• If for whatever reason, you spend over the 30% credit utilization mark, try to pay down/off your balance right away.
• But… always keep a small balance on your card when your statement closes. This small balance will be reported to the credit bureaus and it will show them that you use credit responsibly. If you pay off your full statement before your statement closest, no balance is reported to the credit bureaus and it looks like you never used the credit card, therefore not improvingyour credit score.

If you have any questions, please leave a comment below. Have a great day everyone!

P.S. I am expecting to get a text from my brother in a few weeks asking about the cash back bonus and best ways to redeem cash back. If there is an interesting story, I will share it here.

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