I am looking for a card that i can have a 5k limit on, and use about 25% utilization and pay it off monthly. I have 6 figures liquid in the bank but no credit history and no debt. Where would you go?
32, no credit history, 0 debt, lots of liquid. What card do i get?
byu/Fortknoxgaming inpersonalfinance
Posted by Fortknoxgaming
7 Comments
Without credit history you can get a secured card, i.e. putting down a deposit. Just call your bank
Edit: having more than a couple months’ expenses in cash is not a great idea. At least get a HYSA or bonds or something
>Where would you go?
Normally I’d recommend you go to r/CreditCards and fill out their new card template. But for your first credit card you don’t get a lot of choices. Basically, you’re looking for a no-fee beginner card from a reputable bank.
I recommend checking out Capital One and Discover’s websites and using their preapproval tools. Your local bank or credit union might also have good options. Then just follow the golden rule of credit cards and pay the statement balance each month by the due date.
And if they want you to start with a secured card, that’s fine. You’ll get your deposit back after showing a history of responsible usage (meaning you always pay your statement balance by the due date each month).
>and use about 25% utilization
There’s no reason to artificially keep your utilization low or to keep it below any specific mythical percentage. That whole thing is the single biggest myth in credit. Most of the time you should focus on your finances and just ignore utilization entirely.
“Always keep your utilization low” is a myth because the utilization metric resets completely each month, so it has no memory and doesn’t build credit. The only thing that builds credit with credit cards is time.
So the best way to pay your credit cards is to let the statement post and pay the statement balance by the due date each month. If you always do that, then anything between 0% and 100% utilization is usually just fine.
The only exceptions to this are mentioned in this flow chart:
https://imgur.com/a/pLPHTYL
Also, this thread might be helpful:
[Credit Myth #14 – You shouldn’t use more than 30% of your credit limit(s).](https://www.reddit.com/r/CRedit/comments/1d27d4h/credit_myth_14_you_shouldnt_use_more_than_30_of/)
Income?
With no credit history, a $5K limit might be out of reach at first, even with lots of liquid. The credit card companies care more about credit history and income.
Regardless, just get a card and get started. Doesn’t matter which.
Try robinhood. It’s the only CC I use anymore. Love the ability to use the cash back to invest. In terms of no credit, id think robinhood being an investment platform would enjoy you have cash over just a credit score.
Go to the bank that’s partnered with your brokerage firm and get whatever card they offer. Might be worth giving a call to your relationship manager to see if they have any CC offers for you. Otherwise, you’re probably going to be stuck with secured card for a few months and might take a few years of building history to get approved for a $5k limit.
U.S. Bank has a few options for secured cards with $5000 as the max limit.
Chase! I love them.
Amazon, United air, plus a other generic points card and they took over my mortgage last time it got sold. So easy to work with, have late payment forgiveness. The website and app are amazing.