We're going to talk about what you can do if you get to climb for the freedom card, let's get started.
This probably applies for people who are either new to credit or especially students who are either finishing up or who recently graduated. If you're someone who's filled out a consultation on our website and again if you want to talk strategy I'd recommend fill it one out.
One of the really big things I recommend is that once you kind of has that first card, whether it's a student card or maybe it's a secured card, once you get that you want to get your credit score up, and afterward you want to focus on Chase cards. The main reason for this is due to the chase 5:24 rule, meaning that if you get any other card that is not a Chase card it's going to take up one of those slots.
Official Chase bank rule says
The Chase rule says that if you have more than five new cards from any issuer in the last 24 months then you're going to get rejected for certain cards. This means that if you currently have one card, if you add let's say 2 MX cards then you're taking up two slots, that could otherwise be Chase cards, because that's taking you closer to 5:24, for most people good cards that they're missing out on or the chase trifecta.
This is one of the best setups to maximize your everyday spend to get free travel long-term as well as cards at the Marriot card, the southwest cards, especially if you want companion pass. If you have someone, if you have a plus-one or friends that you fly with pretty often they can fly for free every single time you fly.
If you have companion pass, given this the optimal strategy is to focus on chase cards first before looking to other cards, even if you're pre-qualified for an Amex card, for the most part, it doesn't matter. The MX card is always going to be there, you should get the chased cards first because you're not going to be able to get them in the long term.
If you choose to get that AMEX card, given this, my recommendation to people is to apply for the freedom card after having credit for about nine to twelve months, depending on your income and some other factors earlier might also work, but again you can't really go from no anything, no credit, and very low history to something like the Chase Sapphire Preferred.
I've also had some people who are like 'hey, I am in my last year, I want to get the Chase Sapphire Reserve.' If you already have a history then yes, I think it's a lot easier, but I think going from 0 to 100 is very difficult, obviously, there are exceptions to this. If you are someone who works in a really good field and who already made a lot during the summer then that might be a huge exception. There are definitely people out there who study computer science, who end up working as an intern for one of these big software companies for maybe let's say three or four months, and during those three to four months they're getting paid $40,000 in total.
The main reason for this is because they're prorating to what you would typically get paid, out of school in your first year if you work at Google you're making about 140 to 160 before considering stocks, for other people though who don't have that high of a stated income, especially if you're still in your last year, it might actually be kind of hard to get the freedom card.
If you fall into this group there's kind of two routes they can consider, the first one is to consider other income that you can rely on if you need to. If you look into the chase application when you apply for credit cards it specifically mentions that if you rely on income from let's say your parents, you can actually put that into your income as well.
Some people feel bad about doing this or feel that it's kind of shady, but again it's specifically listed in the Chase application, the idea of being that maybe you're someone who is just rich and your parents pay you money every single month, so technically yes, you're still having a flow of income. Chase isn't as worried about it on Chases, and their whole goal is to make sure that you pay them back and that you don't bust out.
One of the really biggest risks for them is that you end up getting a ton of debt and just don't pay them back, the other alternative is that instead of applying for the freedom card directly you actually apply for the slate card which has lower requirements, and I've heard of a few people who actually apply for the freedom card who were rejected, and then they apply for the slate card and they were accepted for it.
The benefit of the slate card
The benefit of the slate card is that it's a balance transfer card, I typically wouldn't recommend using this at all though, the real benefit is that you can actually produce change it to the freedom card afterward. The big cost here is that you do lose out on a signup bonus for the freedom card, but I think it's fine, especially if you get your foot into the door of Chase and you start building the history of them.
Your whole goal and optimization plan is that you really want to start building history of Chase, that way you can go after the other higher tier cards, maybe you're getting to Southwest cards for companion pass or maybe you're building out your taste trifecta, if you are someone looking to apply for their first Chase card, my recommendation would be to apply for let's say the freedom card online and see what happens.
Again you can kind of see whether you get instantly approved or whether they tell you to wait if you do not get instantly approved you can actually call the chase backdoor number in order to get a credit analyst, that way they can kind of evaluate you on the spot. This number does change, call it you can get access to the right information if you call this analyst and they approve you there then you don't really need to worry about the slate card, and I think you're good to go.
If you get rejected though then I think it makes sense to apply for the slate card right away online, and again just see what happens. The main reason for this is because when you apply for to Chase cards online on the same day, then it's going to be only one inquiry, so that's better for your credit report, especially if you have a relatively young or thin file for your credit with the second application.
The worst that can happen is pretty much nothing, you already had that inquiry, so you're probably not going to get a second one. Sometimes it does happen, if you apply in the branch it typically ends up being two, if you apply in the branch as well as online, so one in one, that's also going to be two. In the past, having a checking account will Chase seemed to help as well, we don't really know whether that's still true moving forwards, but again I don't think it can really hurt.
Going back to the flow, if you do get a proof for the freedom card on the spot it might make sense to apply for another Chase card. The reason for this is again to combining queries, so it might make sense to apply for the freedom unlimited, but you could also make the argument that applying for two cards on the same day, when you're a new customer might not be the best idea.
One other thing too is that when you do to these applications, especially if you're doing a second one you need to actually switch browsers or declare your cookie history. The main reason for this is because, on a system side of Chase, these two applications sometimes don't allow the second one because they think it's an absence. When I was applying for chase cards I would apply for one using a Firefox browser and one using the Chrome browser, that way I would know that they would actually go through.
If the slate method doesn't work then it might make sense to add one other card from another issuer, that way you can kind of prove that you're worthy of credit to them. Maybe that doesn't make sense to you, maybe you just forget Chase, but I don't think that makes sense in the long term. If you think analytically if you look at the numbers, it just doesn't make sense to skip them, but it might make sense to add that secondary card maybe from Discover or Bank of America or Capital One. That way they see more history, so they know that you're trustworthy credits.
One of those weird things where you would think
One of those weird things where you would think that the more cards you have the riskier you are, but it's kind of like investing, where when you see a lot of people doing exactly the same thing or like that might not be a bad decision, the same thing with Chase. They see a lot of other people willing to lend you credit they're like maybe you're not as risky. If you are adding that additional card I would make sure that it's a value-adding a card for you long term.
I think Discover still makes a lot of sense, Capital One isn't a bad choice especially early on, but I would advise against getting store cards, just because I think a lot of them don't really add that much value, and again I just don't think that that great, obviously there are some that are fine, but the majority of store cards are just not really worth it.
I hope that was helpful.
Other webpage resource:
All Credit Cards: https://creditcards.chase.com/all-credit-cards
7 Easiest Chase Cards to Get in 2019: https://www.cardrates.com/advice/easiest-chase-card-to-get/