New MedSchool grad can't get a credit card!!

[WCI24]

Hi,

I just graduated medical school and about to start residency in a few weeks.

I have tried to apply for 2 credit cards but have gotten denied both times (first with my new bank PNC, then with Chase Freedom)!! The main reason is my Debt-to-Income ratio.  I have about 360K in student loan debt and a PGY1 salary of about $47K.

I am planning on closing my BOfA account soon (checking + credit card; PNC will be replacing BOfA) so I want another credit card to make sure my available credit doesn't decrease, therefore negatively affecting my credit score. I would like a credit card (preferably 0% for the first 12-15 months) now so I can use it to buy new furniture/a mattress/etc. as I move to another state for residency.

I am not a big spender, I have ALWAYS paid off my cards every month, and have a credit score of 760+.

 

Is anyone else in a similar situation? Any advice/help would be greatly appreciated!!

[Kamban]

Why can't you keep the BofA card and close just the checking account?

[Zaphod]

Why change banks at all? BofA is a national bank with online services, making any banking changes for practical purposes unnecessary. Is there some special reason you're switching?

[StarTrekDoc]

OP, if you payoff monthly, why need the 0 APR on the new card?

Keep the old CC and KIS.

BOA should be available to you.  If local ATM is the issue and no BOA presence, can understand the need that outstrips getting cashback at point of sales.  I rarely need cash anymore unless it's for kids at school functions for concessions.

We have our original BOA account from med school and moved across four states.

[Zaphod]

StarTrekDoc wrote:

OP, if you payoff monthly, why need the 0 APR on the new card?

Keep the old CC and KIS.

BOA should be available to you.  If local ATM is the issue and no BOA presence, can understand the need that outstrips getting cashback at point of sales.  I rarely need cash anymore unless it’s for kids at school functions for concessions.

We have our original BOA account from med school and moved across four states.

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Same here. Four different states, same account. You can deposit up to 50k/month on the mobile app so I rarely have to visit a bank branch and a resident wont for sure.

[WCI24]

@Zaphod - BOA standard checking requires a $1500 minimum average daily balance, otherwise there's a $12 fee each month. From my calculations/predictions my take home should be about $2500. My expenses (rent, student loan repayment, car insurance, gas, food, savings, other) will be more than $1000.

@StarTrekDoc - I've never had to make large purchases before (ex: furnishing an apartment) so even though I always paid off my credit cards each month to build my credit, the balances have never been that high. Also, the money I used to pay off those balances were always from either my parents or student loans. A 0% card would give me time to pay off my large purchases over the course of a few months without any interest added (very important to me, although, it's looking like that won't be a possibility right now).

@Kamban - Wow I didn't know I was able to do that! I thought closing an account = cutting all ties with that bank. I think that may be my only option right now.

 

Thank you all so much! I just recently found WCI. This is an amazing resource!!

[Zaphod]

WCI24 wrote:

@zaphod – BOA standard checking requires a $1500 minimum average daily balance, otherwise there’s a $12 fee each month. From my calculations/predictions my take home should be about $2500. My expenses (rent, student loan repayment, car insurance, gas, food, savings, other) will be more than $1000.

@startrekdoc – I’ve never had to make large purchases before (ex: furnishing an apartment) so even though I always paid off my credit cards each month to build my credit, the balances have never been that high. Also, the money I used to pay off those balances were always from either my parents or student loans. A 0% card would give me time to pay off my large purchases over the course of a few months without any interest added (very important to me, although, it’s looking like that won’t be a possibility right now).

@kamban – Wow I didn’t know I was able to do that! I thought closing an account = cutting all ties with that bank. I think that may be my only option right now.

 

Thank you all so much! I just recently found WCI. This is an amazing resource!!

Click to expand...

If you have your check direct deposited, that will be waived. There are usually other ways as well, before I was preferred platinum all I had to do was open up a savings and transfer some nominal amount over, aka, move money from left to right pocket and then back.

[WCI24]

Zaphod wrote:

WCI24 wrote:

@zaphod – BOA standard checking requires a $1500 minimum average daily balance, otherwise there’s a $12 fee each month. From my calculations/predictions my take home should be about $2500. My expenses (rent, student loan repayment, car insurance, gas, food, savings, other) will be more than $1000.

@startrekdoc – I’ve never had to make large purchases before (ex: furnishing an apartment) so even though I always paid off my credit cards each month to build my credit, the balances have never been that high. Also, the money I used to pay off those balances were always from either my parents or student loans. A 0% card would give me time to pay off my large purchases over the course of a few months without any interest added (very important to me, although, it’s looking like that won’t be a possibility right now).

@kamban – Wow I didn’t know I was able to do that! I thought closing an account = cutting all ties with that bank. I think that may be my only option right now.

 

Thank you all so much! I just recently found WCI. This is an amazing resource!!

Click to expand…

If you have your check direct deposited, that will be waived. There are usually other ways as well, before I was preferred platinum all I had to do was open up a savings and transfer some nominal amount over, aka, move money from left to right pocket and then back.

Click to expand...

Ok. I'll definitely consider that too. Actually, probably the best option right now. I just spoke with BOA and their direct deposit requirement is only $250 minimum/month...

Thanks!!

[StarTrekDoc]

The days of ACH transfers (moving cash from bank-to-bank) to meet criteria for fee waiver are mostly gone, but perhaps may still be out there.   Those were fun when we are PAID to do things like that

Direct Deposit (DD) is the easiest way these days and your new residency will be able to set you up with that.

That problem with the new CC isn't the your score.  It's the 360k debt.  You probably won't be able to play the 0 APR rotating card debt game for awhile.

Remember, you're about to enter internship.  You'll have little time to worry about a moderate APR short term on a small carried balance over the initial months of internship.   You'll be too sleep deprived to worry about $100 of interest on the credit card (and that's small potatoes compared to the student loans).  I realize the psychology behind credit card debt, but a proper budgeted plan clearly you see it disappearing within a few months.  --  Don't sweat it.

 

 

[RetiredERdoc]

Do you have to close the cc if you close the bank account? If not, keep it as it gives you age of credit accounts, increasing your score. How many cc do you have now? Check into a local credit union that has a fresh start program.

 

http://clark.com/credit/credit-card-application-rejection/

[Hank]

WCI24 wrote:

@startrekdoc – I’ve never had to make large purchases before (ex: furnishing an apartment) so even though I always paid off my credit cards each month to build my credit, the balances have never been that high. Also, the money I used to pay off those balances were always from either my parents or student loans. A 0% card would give me time to pay off my large purchases over the course of a few months without any interest added (very important to me, although, it’s looking like that won’t be a possibility right now).

 

Click to expand...

Keep the BofA card since you already have credit there and it's your oldest credit card for credit score purposes.

There's no need to buy new furnishings and carry a balance on your credit card.  Craigslist is your friend.  Check out thrift stores in the nicer parts of town too.

You might want to buy a brand new mattress to avoid the risk of bedbugs.  Other than that, let someone else take the depreciation hit on furnishings.  Far better to buy used oak or other hardwoods than to go into debt for sawdust, glue, and contact paper from Ikea bought on a credit card you don't pay off in full at the end of the month.

[HandFellow]

agree with above that you can avoid large expenses and buy mostly used furniture, excepting the mattress of course.

One idea is to try applying in branch with a new bank if you really think you need a new card.  Local banks might be more forgiving than larger banks.  However, agree with above that cancelling old card is not necessary.

 

[RPW25]

I had some difficulty getting a credit card from a local bank right out of medical school. Eventually I had saved up about $50K through moonlighting and had to threaten to move all my savings to another bank before they would give me a credit card.

 

Even in my first year out as an attending it took me about a year of paying off my loans aggressively before I could get a more nationally known card.

[adventure]

I loathe BofA for the horrible experiences we've had with them.

That said, the credit department is entirely separate from the checking and savings departments. That said, I left another bank who had a lousy daily balance that was too high.

A little interest won't kill you either, if you can pay it off w/ the first (and maybe 2nd) paycheck. Don't let it go further. Pay it off ASAP. A compromise is probably good... New mattress, craigslist other stuff - agree w/ Handfellow there.