Your first Credit Card - how to maximise your chance ?

[legroom]

Friends

Recently my son was knocked back when he applied for his first CC - on my advice (!).

He just started his full time job post a university degree some 2-3 months ago and the annualised income is approximately twice the 'mimimum' required by the CC.

Granted, there was no credit history.

He's still living at home so the expenses side of the ledger is nil (downside is that he has no bill in his own name yet).

But he was still knocked back !

I wonder when the time is right to apply for your first CC then.

Some of you may have more recent experience as my first CC was so long ago, I forgot when / how I got it.

Thanks in advance.

 

[JohnK]

Which credit card did your son apply for? Amex?

You may need to do some research on which banks/credit card companies are not as strict with their conditions. Bankwest? ANZ?

 

[Mwenenzi]

To get a credit history try applying for a CC from the bank he uses. Can be cancelled - not renewed in a year

He just started his full time job post a university degree some 2-3 months ago and the annualised income is approximately twice the 'mimimum' required by the CC.
< snip >
He's still living at home so the expenses side of the ledger is nil (downside is that he has no bill in his own name yet).

Send him a invoice for rent/food/internet use :idea:

 

[cove]

Both of my sons managed to get started with a Woolies Everyday Rewards credit card at $89 with bonus Qantas points.
This card is run by HSBC which is handy if your son wants to work in the UK or Hong Kong.

 

[tim374]

My first one was the 28 Degrees, however when I applied for a Bankwest card they wanted to see my completed probation form given I had worked for only 6 months at that point.

My point is, because your son had 2-3 months employment, that may not have been seen as secure enough.

 

[deejo77]

My first was a NAB visa at 20, i had worked part time through uni and had been an aps 1 government position for over 12mths. I was renting and had all ny own bills. I was rejected for a $500 limit. My dad and i went in and demanded to see the manager. I requested all my accounts to be closed and the 10k i had in a term deposit to be provided to me in cash. My dad then demanded his term deposit to be closed over $100k. Lets just say they quickly changed their mind and gave me the $500 cc. 12mths later i moved banks. This was back in the 90's

 

[legroom]

Got it

My mistake was to aim for the Citibank Plat free-for-life offer.

In hindsight, it was not a smart thing to do.

I like the suggestion of applying for a CC from his usual bank.

At least they can see his income coming in etc....

How long you reckon he should wait before making the next application: 6 or 12 months?

My first was a NAB visa at 20, i had worked part time through uni and had been an aps 1 government position for over 12mths. I was renting and had all ny own bills. I was rejected for a $500 limit. My dad and i went in and demanded to see the manager. I requested all my accounts to be closed and the 10k i had in a term deposit to be provided to me in cash. My dad then demanded his term deposit to be closed over $100k. Lets just say they quickly changed their mind and gave me the $500 cc. 12mths later i moved banks. This was back in the 90's

That was tough .... but sound very familiar.

Cheers

 

[Mal]

Certain banks have a reputation for allowing easy credit. Recall being knocked back for a credit card with a bank I owned shares in (4x the minimum credit limit) and they still refused it Lol. They told me to apply to Commbank. (And yes I was accepted). Long time ago though.

As others suggest. Apply to the bank where you have an established account.

 

[samas]

I applied for my first credit card at 18. I had been working casually at Kmart for the previous 6-9 months or so. Similarly still living at home etc.
I applied for the Coles Myer Source Mastercard, which I'm pretty sure had no annual fee. I can't remember if there was a promo or anything at the time I just wanted to be able to buy stuff online without relying on the parentals. I thought that perhaps working for Coles Myer at the time might help (not realising it was actually a GE Finance card.). Anyway I was approved for $750 fairly promptly.

That card has now long since been cancelled (before it was rebranded Coles Mastercard) and it became my pathway to better cards! When I used it for the first time at my work one of my team members said to me it probably wasn't a good idea being a really high interest rate but I said not to worry I wasn't planning on paying any interest and to this date I never have*

(*except the time I balance transferred a car purchase on credit to take advantage of a 2.9% balance transfer 'car loan' )

 

[ric_melb]

With the value of hindsight applying for a "premium" card for someone that is only 3 months in to a job would most likely be the reason for the application to be declined.
Even though your son may be earning twice the requirement of $35,000pa, the bank would be looking at length of employment history, age, and lack of credit history.
As others have suggested applying through a bank where he has accounts for a basic type card may produce an approval. Good luck.

 

[legroom]

.....
As others have suggested applying through a bank where he has accounts for a basic type card may produce an approval. Good luck.

Thanks for the suggestion

I'd reckon I would ask him to wait for another 6 mo then approach his bank directly to ask for an opinion before the actual lodgment of an application for a basic card - not Plat or Diamond.

That way, if they think he is still too green, he won't get knocked back and get a poor Veda score.

Your thoughts ?

 

[Cynicor]

Thanks for the suggestion

I'd reckon I would ask him to wait for another 6 mo then approach his bank directly to ask for an opinion before the actual lodgment of an application for a basic card - not Plat or Diamond.

That way, if they think he is still too green, he won't get knocked back and get a poor Veda score.

Your thoughts ?

6mo is probably fine, I sometimes wonder if the bank staff have any real idea. Call centre staff can be just as useless, you get so much varying information.

My first card was an Amex gold as a student, 3 months into my first job at K-mart too. But I had a scholarship with guaranteed tax free payments for 6 years until graduation, so that likely played a part.

Good luck with the CC.

 

[The Rok]

He needs to check his credit score. He may be in negative territory now. Having no credit history automatically starts you on a very low score.

 

[legroom]

He needs to check his credit score. He may be in negative territory now. Having no credit history automatically starts you on a very low score.

Been waiting to hear from one of the CC / Veda pro

I'm sure his score is low, even negative by now with that Citibank knock back.

Point is, what is the best way forward for people like him: stay at home, 1st well-paid job, no prior CC history... ?

What's the benefit of knowing your V score at this stage ?

Cheers

 

[cove]

Six months of working at one place will be helpful.
If that credit card application was to Citi then that doesn't really count as they are very good at losing documents, saying NO and so on.
He could try an easier to get card like the Woolies EDRCC when he has worked 6 months.

 

[The Rok]

The score is most likely negative now so the only chance is a visit to his local branch of whatever bank he is with. Ask for a cc with a $500 limit. Wait 6 months, then he will most likely have a positive score.

You only pay $85 per year to track your score monthly. That will tell him the opportune time to apply. If he gets 6 months continuous employment and has a score over 700 then it's time to apply.

The application to citi bank will actually help him long term. It will lower his score initially, but it gives him a starting credit profile, no applications will result in an increase each month from here on.

 

[medhead]

Whenever I apply for a card I put in something reasonable for expenses. My tip even if your son has no expenses from living at home, it will look better if he does have some expenses.

 

[JohnK]

Point is, what is the best way forward for people like him: stay at home, 1st well-paid job, no prior CC history... ?

Would a post paid mobile contract assist with credit rating?

How about a credit line type of facility such as GE Money or whatever is offered at stores such as Harvey Norman.

 

[cove]

I googled Veda and looked through their website.
Have never bothered to get my credit file but they say you should check it to avoid identity theft.
Between my wife and myself we have credit card limits of around seven figures and it does not appear to affect anything.
By always paying the monthly account to zero has been something we have always done since the 1970s.
The first card is always the hardest so patience and avoiding Citi would be a good plan. The only card I have had difficulty with other than Citi has been the 28 Degrees credit limit so you might choose to avoid these two.