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A reader emailed me the following question:
I am a college student and I was looking to open my first credit card today. I applied for the Chase Freedom Unlimited Card but was instantly rejected. I had called Chase before applying to make sure that my lack of real income (minus my paid summer internship) was not an issue and they said it was not and that college kids frequently get approved for the card. Additionally, it is listed as one of the best cards for college students. I’m wondering if you might have any guesses as to why I was rejected?
Also, as I am still looking to open up a card, I was wondering how long you think I should wait before applying for another card?
Getting approved for your first credit card (or first few credit cards) can be challenging, especially if you’re a college student. In my head I always feel like it was just yesterday that I applied for my first credit card while still in college, but then I realize that was over a decade ago… time flies!
So, what should this reader have done differently, and what’s his best course of action from here?
Chase cards can be tough to get approved for
Of course this is all going off anecdotal evidence, since issuers don’t directly publish how difficult it is to be approved for a card, other than saying you need “average” or “excellent” credit, for example.
The three biggest card issuers are Amex, Chase, and Citi, and as a general rule of thumb I find Amex cards easiest to be approved for, followed by Citi cards, followed by Chase cards.
Maybe some have different experiences, and of course it very much depends on your specific situation. But I do generally find this to be true. The Chase Freedom Unlimited is a great card, but it’s not a card specifically for college students, and certainly isn’t the first card I’d get if trying to build credit, given that it can be tough to get approved for (as you found out).
So, what’s the best way to get started in your credit card journey as a college student?
Step 1: Apply for a student credit card
First you have to build your credit and show that you’re credit worthy, and the way to do that is to first get a student credit card. There are many options out there, and frankly it doesn’t even matter much which you apply for.
You’re not getting this for the great rewards, but rather because it’s a good investment in your future ability to get credit cards.
Two cards I often recommend are the Citi ThankYou® Preferred Card for College Students and Journey® Student Credit Card from Capital One®. Both cards offer modest rewards, but the point is that they have no annual fee, and hopefully spending money responsibly on one of these for six months or so will improve your credit.
By “spend money responsibly” I mean making purchases on the card every billing cycle, not utilizing too much of your credit (stay under 30%), and paying off your card on time.
Step 2: Apply for an Amex credit card
Take my word on this. As mentioned above, Amex cards are anecdotally among the easiest “regular” cards to be approved for, assuming you have excellent credit.
So I recommend the next step of the strategy is to apply for a personal American Express card. It doesn’t particularly matter which one, but the point is that you get a card that you actually find rewarding that you can spend money on.
That’s because Amex cards are going to be easier to get approved for than most Chase or Citi cards, so this is an opportunity to get a card you want while continuing to build your credit.
As of now, some good options include the following (based on the big welcome bonuses and/or generous return on spend):
- Gold Delta SkyMiles® Credit Card from American Express
- Platinum Delta SkyMiles® Credit Card from American Express
- Starwood Preferred Guest® Credit Card from American Express
- Hilton Honors™ Card from American Express
- Hilton Honors Ascend Card
- Premier Rewards Gold Card from American Express
I’d recommend then using an Amex credit card for several months to continue to develop good credit.
Step 3: Check your credit score
At that point I’d recommend checking your credit score and seeing what it looks like. There are plenty of free services out there for checking your credit scores.
Before you even consider applying for more cards, make sure your score is at least 720, and ideally even a bit higher. That’s not the only metric that matters, but it’s good to confirm that there’s nothing inaccurate on your credit score.
Step 4: Apply for a Chase or Citi card
After using a college credit card for several months, and then using an Amex credit card for several months, and then checking your credit score, hopefully you’re ready for the big leagues. At this point consider applying for one of the premium cards you’ve been wanting, whether it’s the Chase Sapphire Preferred® Card, Chase Sapphire Reserve® Card, or Citi ThankYou® Premier Card.
If you get approved, maybe try to get a couple of cards, but then take it easy and for the next year or so don’t apply for too many new cards, since your score is still pretty “fragile.”
In the event that you do get denied, don’t panic. It’s not the end of the world. Keep using your existing cards responsibly for a few months to continue building good credit, and then try again.
It can be tough to get approved for some of the mainstream travel rewards cards if you’re a college student with limited income and limited credit history. So while there’s no “one size fits all” strategy, what I’d recommend if you’re denied for a card is to first pick up a card specifically for college students, use it responsibly for several months, then pick up an Amex card, use it responsibly for several months, and then apply for a Chase and/or Citi card.
To college students (or recent college students) — what has your experience been getting approved for cards?