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Coming out of college into my first full-time job, one of my financial goals was to get a credit card of my own.
I had a credit card previously when my mom had the foresight to open a joint credit card when I started college — with her as a co-owner — to help me build credit. After four years of responsible usage, I had a credit score in the mid-700s.
After combing through the NextAdvisor credit card reviews, I set my sights on the Chase Freedom Unlimited® for its generous cash back in categories I knew I’d use, no annual fee, and generous intro bonus.
I applied online — and was promptly denied.
The online form didn’t provide any details, and I would need to wait several days for a mailed letter explaining the decision.
I turned to NextAdvisor’s senior writer and resident credit card expert, Kendall Little, for advice. “Call Chase and ask them for details and to appeal the decision,” Kendall told me. “At the very least, you’ll get a better understanding of why you were denied,” she explained.
I called Chase customer service and politely explained my situation, then asked if they could tell me why my application was rejected. The representative gave me several reasons, two of which stuck out to me:
- The total available credit line — the maximum amount I could borrow — on my current joint credit card was too low.
- I had too many recently opened loan accounts (I’d taken out some student loans the previous semester).
The Chase representative offered to submit a reconsideration request for me. I provided some information about my current employer, salary, employment history, and my reasons for wanting the Chase Freedom Unlimited card.
After some additional steps to verify my identity, I received a welcome package for the Chase Freedom Unlimited Card in the mail.
All in all, the whole process took around four weeks and a surprising amount of work. Aside from discovering the power of a polite phone call to customer service, here are five lessons I learned from the experience.
1. The credit score used by lenders may be different than what you see
In lieu of paying a fee to check my credit score, I used my bank’s free credit score reporting service, which uses TransUnion’s FICO scores. I thought I had a good credit score in the recommended range for the Chase Freedom Unlimited card.
When I got the decision letter from Chase, however, the score they listed was almost 20 points lower than what my bank had reported. According to the letter, Chase used its own proprietary scoring system and data from Equifax. Although it seems that my credit score was not the tipping point of the decision, the significant difference still surprised me.
The lesson I learned from this is that scores can vary depending on where you get them. Just because you’re in the recommended score range doesn’t mean you’re guaranteed to get a certain card.
2. It takes more than on-time payments to build credit
Even accounting for the variance, my credit score was still considered good to very good by most standards. However, the decision letter listed several factors other than my credit score as grounds for denial, including too low of a credit line on my current joint card and too many recently opened accounts.
For a long time, I had assumed that paying your bills on time and in full was enough. It’s true your credit score plays a major part in credit applications, and payment history accounts for the largest share of your credit score calculation. But I should’ve taken into account all the other factors that could affect my credit application.
In hindsight, I could have paid more attention to my credit utilization ratio — the amount borrowed divided by total credit available. The recommended credit utilization is under 30%, and because I had a low credit line with my previous card, my normal spending sometimes pushed me over the threshold.
3. Your current credit line can affect your future credit applications
The thing that surprised me the most was how my credit line on my existing joint credit card affected my application. Your credit line itself doesn’t factor into your credit score calculation — just your credit utilization ratio. I didn’t spend much with my card, so I never bothered to apply for an increase to the $500 credit line I started out with.
After several years of making on-time payments, I probably would’ve qualified for a credit line increase if I had asked for one. If I had known my credit line would affect my future card applications, I would’ve done the extra work to apply for a credit line increase.
4. Be patient and apply strategically
After being denied, I immediately started scouting out other options. I held back on actually applying, though, because I didn’t want new credit inquiries to hurt my credit score further. Thankfully, I convinced Chase to reconsider my application. But even if I had been rejected a second time, it would’ve been better to wait for the case to be closed completely before trying somewhere else.
Even though things worked out in the end, I probably could’ve saved myself some time and hassle by applying for a card with easier requirements. While it’s good to research which cards have the best rewards and perks, I learned that it’s also important to have realistic expectations and apply strategically for the cards you have the best chance of qualifying for.
5. It’s important to build credit early
One thing I did do right — thanks to my mom — was building credit early. Looking back, I’m grateful that my mom helped me get that joint credit card before I saw the need for one. Having an existing credit history made it possible for me to choose a high-value rewards cards for my first independent credit card.
For any parents out there, I recommend adding your teenager as an authorized user on your credit card or opening a joint credit card together. Teach them how to use it properly as soon as they’re old enough to handle the responsibility. College students and young adults who want a card independent of their parents can consider applying for secured cards and student cards specifically designed to help people with no credit history build credit.
Why I Chose the Chase Freedom Unlimited
When I was doing my initial research to decide which credit card I should get, I had two other contenders besides the Chase Freedom Unlimited: the Citi® Double Cash Card and the Capital One SavorOne Cash Rewards Credit Card. Though all three were highly-rated cash back cards with no annual fee — my most important consideration — I ultimately decided on the Chase Freedom Unlimited for two reasons:
- Intro bonus: Unlike the Citi Double Cash Card, the Chase Freedom Unlimited Card came with a $200 intro bonus after you spend $500 on purchases within the first three months of account opening. Even though the Citi Double Cash Card had a higher overall base cashback percentage (2% vs. 1.5%, not considering additional rewards categories), it would take $40,000 of spending for the difference in cash back rewards to exceed the value of the intro bonus — way more that I would spend in a year.
- Spending categories: My biggest monthly expense aside from rent and utilities is food. The Chase Freedom Unlimited Card and Capital One SavorOne both offer a $200 intro bonus and 3% cash back on restaurant dining. The Chase Freedom Unlimited offers 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year, 1.5% cash back on all purchases and the Capital One SavorOne offers 3% cash back on grocery stores (excluding superstores like Walmart® and Target®) and 1% cash back on other purchases. While I normally like to cook, part of my plan for meeting the $500 into bonus spending requirement was to eat out more. I knew that my food budget for the next three months would include more takeout than groceries, so I evaluated the cashback categories accordingly.
Of course, I made these decisions based on my personal financial situation and goals — as a twenty-something living independently, with no big purchases on the horizon and no reason to spend money on anything more than the necessities. For someone who has more opportunities for spending — for example, someone providing for a whole family — a higher cash back rate might be more beneficial than an intro bonus. Similarly, if you spend more in certain categories, it’s worth picking a card that has cash back bonuses specific to that category.