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CA Manager / RHLC
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Discussion Starter · #1 ·
I'm not really sure where to start. I currently have a $2,500 line of credit (zero balance) attached to my checking account through my credit union and an Amex card for my expense account at work but no actual credit card (and no idea if I'm building credit). I have a bit of an aversion to debt so I've been putting it off for a while.

What I'm looking to do:
-Build credit (want to take out a small auto loan some time later in the year)
-Use rewards points for traveling.

I usually rack up around $1,500 or so a month on my employee Amex and pay it off as soon as I get reimbursed (bi-weekly). I was thinking of opening up a personal card and using that for my monthly work expenses instead of the Amex (employer doesn't care, reports will just take more of my time to fill out). The balance would still be paid off in full every month but I figured I could whatever sort of award points the card offers fairly quickly due to the volume of spending. Is this a stupid idea from a credit standpoint?
 

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Bro of Bros, Bro.
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15,373 Posts
It's not a bad idea at all. I put just about everything on some sort of credit card, and pay everything off at the end of the month. I will every so often carry over a balance for fun, but your thinking is right in line.

First you need to figure out your points. How are you going to be spending to maximize the point system for the rewards you want? That's a somewhat rhetorical question, but it should get you in line with what you want to do.

Typically with most of the cards we carry, the rewards we use are either maximized by the spending pattern or drastically outweigh the annual fees.

Forget about the credit line right now; get the personal card and spend away. Just be responsible by paying it off or maintaining a low (<10%) carry over balance. If you are comfortable paying off every month, get an Amex. Hell, get an Amex as well AND another card, potentially through your bank, but shop around. Keep in mind (and I'm sure you already know this) but Amex is not taken a lot of places.

Word on the street is Visa and Mastercard are going to be upping their fees. This is going to bring Amex into a much more competitive market. Also, hush hush word on the street is Mastercard has something big up their sleeve, so you may want to go with that one.
 

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DOO)))M
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Hell, get an amex as well AND another card, potentially through your bank, but shop around
Since you mentioned it, is there any real benefit to having a card from your bank vs. say someone like Capital One, Discover, etc? I get offers all the fucking time and every time I apply for one I get denied (PRE-APPROVED MY ASS!) so I may just go through my bank since I SHOULD start a line of credit besides my car payment/school loan.
 

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Bro of Bros, Bro.
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Your bank may be able to vouch for you and get you a better rate and limit as opposed to Capital One or Discover, but in the end they will most likely be outsourcing that as well.
 

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CA Manager / RHLC
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Discussion Starter · #5 ·
It's not a bad idea at all. I put just about everything on some sort of credit card, and pay everything off at the end of the month. I will every so often carry over a balance for fun, but your thinking is right in line.

First you need to figure out your points. How are you going to be spending to maximize the point system for the rewards you want? That's a somewhat rhetorical question, but it should get you in line with what you want to do.

Typically with most of the cards we carry, the rewards we use are either maximized by the spending pattern or drastically outweigh the annual fees.

Forget about the credit line right now; get the personal card and spend away. Just be responsible by paying it off or maintaining a low (<10%) carry over balance. If you are comfortable paying off every month, get an Amex. Hell, get an Amex as well AND another card, potentially through your bank, but shop around. Keep in mind (and I'm sure you already know this) but Amex is not taken a lot of places.

Word on the street is Visa and Mastercard are going to be upping their fees. This is going to bring Amex into a much more competitive market. Also, hush hush word on the street is Mastercard has something big up their sleeve, so you may want to go with that one.
Can you expand on this? I ideally want to minimize my annual fees.

I haven't really considered getting a personal Amex; is there some sort of benefit over other cards? What makes them different? I know they seem to have higher merchant/processing fees and that's why certain places do not accept them.
 

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Bro of Bros, Bro.
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Our Amex cards are $175 a pop per year, but we get way more than $175 worth of cumulative point bonuses for our purchases in areas on these cards, so it pretty much negates that fee.

Another card is something like $80 a year, but with free bag checking, two trips pays that.

Also, Amex pretty much has your back. It can be a pain at times, but if there is suspicious activity, they'll block it and call you. If you have a dispute, you will not really have anything to worry about. I think it's this way with a lot of cards these days, though.

In essence you just need to see how your spending offsets your fees.
 

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Jigsaw?
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Amex's fees are why we don't take them in the store, being a small retailer is expensive enough, it winds up feeling like you are buying some others guy's trip to Hawaii. I had no credit for a very long time and also hate debt. Fired off what felt like a hundred applications until Capital One finally gave me one. I pay it off every month and hate it every time :lol:
 

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Is Actually Recording
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Since you mentioned it, is there any real benefit to having a card from your bank vs. say someone like Capital One, Discover, etc? I get offers all the fucking time and every time I apply for one I get denied (PRE-APPROVED MY ASS!) so I may just go through my bank since I SHOULD start a line of credit besides my car payment/school loan.
Stop applying for six months to a year (Chris will chime in, and can give you a better idea) before you talk to your bank - every time you apply for a line of credit it's a hard inquiry on your credit report, and that hurts your score.

Also, +1 for Amex - their Blue Cash card has no annual fee (and looks awesome) so for the time being that's the one I'm using, though I'm not far from the point where I need to sit down and re-evaluate, I think.

I had my card compromised once, maybe 8 months ago - I woke up to an email from Amex, and had a phone call from them shortly after I got out of the shower that morning to discuss three suspect charges. One was valid, but the other two (a $1 donation to a school in New York, and a $600 plane ticket) were not, and they had them reversed that morning and a new card in my hands 24 hours later. Keep in mind these were both transactions from the prior night - their response time was awesome.
 

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Guiterrorizer
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Wirelessly posted

I think i should also get into looking at what rewards program is the best option. I have finally been able to pay off my airmiles mastercard every month for a little while now.. But I rarely shop at places where I can get airmiles :lol:
 

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Is Actually Recording
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I use cards less and less these days. Cash is King.
Cash is great, especially if you can negotiate favorable terms in return.

However, credit cards offer excellent buyer protection (Amex will refund my money if anything I buy is deemed defective and the manufacturer won't, for example, and offers FAR better fraud protection than my debit card), is much more theft proof (if your wallet is stolen, any cash in it is gone. However, your crdit cards can be shut off with a simple phone call and any erroneous charges will be taken off your statement) and having a proven credit repayment history is invaluable when it comes time to make big-ticket financed purchases, such as a house.

Unless you bought your house all cash, of course. :)
 

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Is Actually Recording
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:agreed: If it weren't for needing a good credit rating for the business I'd still be doing this.
...which is the best reason to do it anyway - you rarely know 2-3 years in advance that you're going to need a line of credit or a loan for a business or the purchase of a home, which is why you should be pre-emptively building credit. :yesway:
 

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Registered
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Wirelessly posted

It's all a moot point, though, because I never use points or miles for anything!
Not sure if you're talking any card in particular. At a minimum on AmEx you can flip your points into AmEx or store gift cards.

Great for gifts or spending on yourself.
 

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Bro of Bros, Bro.
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Not sure if you're talking any card in particular. At a minimum on AmEx you can flip your points into AmEx or store gift cards.

Great for gifts or spending on yourself.
I just never really use points or miles for any purchases of anything. I just use the cards to buy more stuff, to get more points that I'll never use. It's a viscous cycle!
 

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Jigsaw?
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...which is the best reason to do it anyway - you rarely know 2-3 years in advance that you're going to need a line of credit or a loan for a business or the purchase of a home, which is why you should be pre-emptively building credit. :yesway:
Very true. I had absolutely zero credit history when we started and was glad we could borrow a little money from our Dad to get this thing off the ground. I was extremely lucky that my lack of credit didn't completely fuck us over.
 

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HOLY DIVE-AH!
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Honestly, having credit cards, even with little/no balance and a solid track record of re-paying HURT me when I bought my house.


I had 5 or 6 at the time, all with like 25,000 limits. they just kept upping them all the time because I was a good customer. But, because I had access to $200,000 basically instantly, I was deemed high-risk for credit availability.
 
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