Update: These offers for the Hilton Honors Ascend Card from American Express, The Hilton Honors American Express Business Card and the Amex EveryDay® Credit Card have expired. Learn more about the current offers here.
Getting approved for a credit card with limited credit history can be a challenge. Credit card companies want to see that you can spend responsibly before they’ll extend you credit, but at the same time if they don’t extend you credit, you can’t really prove that you can use credit responsibly. This is a situation I was in about a decade ago, and I remember my frustration at first. Fortunately I quickly figured it out, and have been earning amazing credit card rewards ever since.
A couple of years ago the Chase Sapphire Reserve® Card was introduced, which has been extremely popular with millennials. I get lots of questions from young professionals regarding their approval odds for the card. Is it really practical for a 20-something year old to be approved for the Chase Sapphire Reserve® Card?
In this post I wanted to answer that question on a few different fronts:
- Why the Chase Sapphire Reserve is so popular with young people
- How tough is it to be approved for the Sapphire Reserve?
- Why the Sapphire Preferred could be a better first card to apply for
- What happens if you get denied for the Sapphire Reserve?
- If you get denied, what should you do?
Let’s get right into it:
Why the Sapphire Reserve is so popular with young people
Chase reached their one year sales target on the Chase Sapphire Reserve® Card within two weeks of introducing the card. They’ve been pleasantly surprised by the number of millennials who have applied for the card, which is pretty powerful on their part, since historically young people have avoided high annual fee cards (conversely, I feel like the Amex Platinum Card has largely targeted seniors, who still view the card as a prestige symbol).
While Chase has been thrilled with the number of young people who have gotten the card, that’s also an issue, because they’ve learned that young professionals often have different credit card usage patterns than previous generations. They’ve found that fewer people are financing charges (which is one way credit card companies make money), and people are also spending a disproportionate amount on dining and travel, which are the most rewarding categories.
So in addition to the great welcome bonus of 50,000 Ultimate Rewards points upon completing minimum spend, what else makes the Sapphire Reserve so great?
- 3x points on dining and travel
- A $300 annual travel credit
- A Priority Pass Select membership with guesting privileges
- The ability to redeem points for 1.5 cents each towards the cost of a travel purchase
- No foreign transaction fees
- Great travel and purchase protection
As you can see, this card is very much geared towards young professionals, who may spend more on dining and travel than on gas and groceries, for example. Furthermore, the “travel” category is so broad, and includes things like Uber, which many of us use on a daily basis. That $300 annual travel credit can be applied towards anything that’s coded as a travel purchase, including Ubers, so just about everyone should be getting the full value out of that credit.
How tough is it to be approved for the Sapphire Reserve?
Let me share a scenario I get asked questions about all the time. Say you’re a young professional who is a few years out of college, but you’ve primarily used debit cards up until now. Maybe you applied for one credit card in your name, because you’ve operated under the (incorrect) assumption that having multiple credit cards is bad for your credit score. Your credit score is good, but you don’t have that much credit history.
What are your chances of being approved for the Chase Sapphire Reserve® Card?
Probably not amazing, but you do have a chance. This has more to do with being approved for Chase cards in general, rather than this card specifically. In my experience for those with excellent credit but not much credit history, Amex cards are easiest to be approved for, followed by Citi cards (though they’re wildly inconsistent when it comes to approvals, in my experience), and then Chase. So Chase is one of the tougher issuers to get cards from, though in my experience once you have your first card with them, getting more cards is much easier.
Why the Sapphire Preferred could be a better first card to apply for
The Chase Sapphire Preferred® Card is the more mainstream version of the Reserve. It has a $95 annual fee (waived the first year) and offers:
- 2x points on dining and travel
- The ability to redeem points for 1.25 cents each towards the cost of a travel purchase
- No foreign transaction fees
- Great travel and purchase protection
The card has the same welcome bonus, and if you get the Sapphire Preferred you could upgrade it to the Reserve after a year. So in many ways this strategy gives you the best of both worlds, as you get a slightly better bonus and a waived annual fee for the first year.
So why is the Sapphire Preferred potentially easier to get approved for? Because the Sapphire Preferred is a Visa Signature Card, while the Sapphire Reserve is a Visa Infinite Card. In general, each of those types of cards has a credit line minimum:
- A Visa Signature has a $5,000 minimum credit limit
- A Visa Infinite has a $10,000 minimum credit limit
What this means is that you can have an excellent credit score, but they could decide that they only feel comfortable giving you a $7,000 credit limit, for example. If that’s the case, you could be approved for the Sapphire Preferred but not the Sapphire Reserve. As a result, if you’re not sure if you’ll be approved, the Chase Sapphire Preferred® Card could be a good card with which to start.
What happens if you get denied for the Sapphire Reserve/Sapphire Preferred?
My general recommendation for this with excellent credit but with limited credit history is to just try applying for the Chase Sapphire Reserve® Card or Chase Sapphire Preferred® Card. Should you be super angry if you get denied? Absolutely not. The reality of how credit scores work is that your score will be dinged by a couple of points temporarily (that falls off your report after 24 months), and those couple of points shouldn’t make a difference for all practical purposes. You can still apply for the card in the future, but then at least you know if you have to build up more of a credit history before trying again. There really is very little downside to trying to apply.
If you get denied, what should you do?
As I mentioned above, I find that for those with excellent credit but limited credit history, Amex cards are among the easiest to be approved for. So my recommendation would be to pick up a couple of American Express personal credit cards, spend on them for several months (let’s say 6-12 months), monitor your credit score, and if you’re seeing positive changes to your score, you can try applying for the Chase Sapphire Reserve® Card or Chase Sapphire Preferred® Card again.
Which Amex card makes the most sense? It doesn’t really matter much, I find there’s not huge variance in terms of approval odds by cards. If you want a card that’s generally useful for earning points, my recommend would be one of the following:
- American Express® Gold Card has a $250 annual fee, but does offer a $100 annual airline fee credit. The card has excellent bonus categories, including 4x points at US restaurants, 4x points at US supermarkets (up to $25,000 each year), and 3x points on airfare purchased directly with airlines
- The Amex EveryDay® Credit Card from American Express has no annual fee and offers 2x points at US supermarkets (on the first $6,000 spent annually) and a 20% points bonus when you make 20 or more purchases per billing cycle (learn more about this card here)
Those are two excellent cards that offer Membership Rewards points, though there are also some limited time welcome bonuses that it could make sense to take advantage of instead:
- The Hilton Honors Ascend Card from American Express is offering a welcome bonus of 100,000 Honors bonus points after spending $3,000 on purchases within the first three months, plus a free weekend night award on your first account anniversary; the card has a $95 annual fee
- The Hilton Honors American Express Business Card is offering a welcome bonus of 125,000 Honors bonus points after spending $5,000 on purchases within the first three months; the card has a $95 annual fee
- The Hilton Honors™ Card from American Express is offering a welcome bonus of 75,000 Honors bonus points after spending $1,000 on purchases within the first three months; the card doesn’t have an annual fee
There are lots of other options, though those are a few that I’d consider.
For those who haven’t had many credit cards, getting approved for a Chase credit card can be challenging. This is especially true for younger people, who are likely to have limited credit history.
To summarize my advice, if you don’t yet have any credit cards:
- Apply for a couple of Amex cards first, as they’re generally easier to be approved for
- After 6-12 months consider applying for the Chase Sapphire Preferred® Card, since it’s likely to be an easier or approval, or you can try for the Chase Sapphire Reserve® Card if you prefer
If you already have a couple of credit cards, have an excellent score, but have limited credit history:
- Try applying for either the Chase Sapphire Preferred® Card or Chase Sapphire Reserve® Card; if you get rejected it’s not a huge deal, as it just dings your credit score by a couple of points for a limited time
- Work on building your credit by applying for some Amex cards, which are likely to be easier to be approved for
- After using those cards responsibly for 6-12 months (paying off your balance in full and keeping your utilization low), consider applying for a Chase card again
This strategy worked for me back in the day when it came to getting my first Chase card, and it’s something I’ve generally gotten good feedback on from readers. Of course everyone’s situation is going to be different, so only take this as very general advice. I’m happy to provide more detailed recommendations in the comments based on data points I’ve heard if you want to share more details based on your situation.
If you have a fairly limited credit history, please share your experience getting approved for one of the Chase Sapphire cards in the comments section.