What's the credit card for me?

October 11, 2012 2:21 PM

Should I switch from the HSBC Premier World Mastercard to the Amazon Visa? If not, which credit card will let me save the most money rather than be rewarded for spending more?

I have the HSBC Premier World Mastercard with a $30K credit line and I meet the requirements to not have any sort of fees and I watch my books vigilantly. I make maybe 90% of all purchases on the card and pay off the full balance every month, and have been doing so for the last ten years. On average I'm burning through about $1250 a month. The rewards the card provides are almost completely useless to me: I don't do a lot of travelling, and I haven't left the country in years. I'd rather have benefits with immediate relevance than free airplane tickets after five years of spending. The security of the credit line is nice, but I don't think I've ever had a balance over $5000. If, God forbid, I need to borrow a large amount, I'll find a cheaper way to do it than a consumer credit card. I have no car-related expenses and very, very few home-related expenses (in the "repair" sense, I live in a co-op apartment.)

I'm wondering if the Amazon Visa is right for me. They are the only retailer at which I regularly spend large amounts of money (I buy all house supplies in bulk on Amazon) so the triple-points toward other Amazon purchases makes sense. Again, the rate doesn't matter because I plan to pay off the balance every month as I have been doing. Stories of a low credit line worry me a litte: does anyone know how a credit line is determined in this case? My credit score is in ~780-790 and I'm reading a lot of conflicting things with not enough context to figure out what is going on. My Mastercard was opened under some pretty unique and unrepeatable circumstances so I'm not expecting $30K, but I think I'd need at least $10K to feel comfortable opening the card.

So, should I go with the Amazon Visa? Are there other options I am not seeing? I've looked at those "figure out the best card for me" websites and haven't seen anything to make me switch cards.

If I do open the card, is it better to keep the Mastercard open? Is that going to affect my credit somehow?

posted by A god with hooves, a god with horns to Work & Money (9 answers total)

From what I hear, part of your credit rating is the age of your single oldest line of credit. Closing the HSBC card would likely cause you to take a hit. I think total amount of available credit also plays in; if the new card didn't have as large of a line, you might lose some points there. (I know debt-to-available-credit ratio is part of it, but I'm not sure that applies to you since you pay in full each month.)

Sounds like you should transition to the Amazon card and use it for most things instead, but hold on to the HSBC card, perhaps with some small transactions on it each month so they don't close it on you.
posted by supercres at 2:28 PM on October 11, 2012

I'd probably keep the card open. Having a 10+ year history of on-time payments and a large limit is going to be a big plus for your credit score, as it brings up the lifetime of your accounts and decreases your credit utilization. There's no harm in keeping the account open, sticking the card in a drawer, and using it only every once and a while (so it stays active), unless you need to force yourself not to spend money you don't have, which isn't what's going on here.

You might get a lower credit limit when you start off, but after a while of steady payments and with good credit, you can always request an increase. I'm not sure why you're so set on needing a $10K+ limit right off the bat when your charges average $1250/mo and you aren't running a balance. Since you're not closing the HSBC card (see above), you'll have plenty of available credit if you need it.
posted by zachlipton at 2:32 PM on October 11, 2012

From what I hear, part of your credit rating is the age of your single oldest line of credit.

I guess it would be relevant to add that the Premier card was opened two years ago as an upgrade to my previous HSBC card, which had been open for eight. Would that be considered an extension of that line of credit?

* * *

I also forgot to ask: can I call and negotiate a credit line? Waiting for and talking to customer service drives me up the wall, so I'd like to know if the credit card system even works that way before I try. I'm not even going to bother with this if I'm started off at, say, $1000, which would be more trouble than its worth as I'd have to keep track of two cards.
posted by A god with hooves, a god with horns at 2:35 PM on October 11, 2012

The most recent issue of Consumer Reports did a nice comparison on rewards credit cards based on what you spend on and what type of rewards you want -- full text is here.
posted by jabes at 2:40 PM on October 11, 2012

You can absolutely request a higher credit limit, though the actual customer service reps may be limited by policy/the algorithms in what they can do. Asking for someone with more authority (see, for instance, this article) might help. In my experience, you generally get a limit when you first get the card, and later request a higher limit by phone (or even online in some cases). You might be less of a risk if you have at least a couple months of steady history on the card, and some cards even bump your limit up after a while without you asking. They'll want your current income and will consider your credit report and past spending/payment history with the card. On the phone, I've been asked how high of a limit I was looking for, and you can certainly discuss that with the customer service agent. It doesn't hurt to have a good reason for wanting a higher limit (e.g. "I'm going on vacation and want to be able to use the card for my airfare and hotel"), but not something that makes you sound desperate and a bad credit risk (e.g. "I need $1,000 right now or the casino loanshark is going to break my kneecaps").
posted by zachlipton at 2:56 PM on October 11, 2012

I had an HSBC Premier World Mastercard up until a couple of months ago when they sold off some branches and the credit card accounts held by people with accounts in those branches. I always used to use the "gift cards" rewards in their rewards catalog - they'd have cards for Target and other stores that I shopped in, so I just got those rather than soft goods. They also had (maybe still have) cash back rewards where they'll just give you actual money.

I wouldn't close that card either due to the credit history associated with it. If you don't have any annual fees with it and never use it and you do get a new card with rewards you prefer, just stick the HSBC card in the back of a drawer somewhere and don't use it.
posted by bedhead at 3:14 PM on October 11, 2012

FWIW, I love love looooove my Amazon Visa and all the rewards it brings me. Points accrue once a month and you can pay with them directly on the site- no need to turn them in for a paper certificate at $25 intervals.
posted by ThePinkSuperhero at 3:54 PM on October 11, 2012

supercres: "From what I hear, part of your credit rating is the age of your single oldest line of credit. Closing the HSBC card would likely cause you to take a hit."

You'll take a hit from that end, but not until it ages off your report entirely. You'll immediately take the hit for increased utilization that comes from the credit line being zero. Just apply for the Amazon card. You lose nothing if they give you a credit line you don't like. If that happens, call them and explain and you'll probably get an increase to at least a few grand if you already have other cards open with higher limits that have low utilization.

If you travel much, airline points can worth far more than the usual 1c/point most rewards cards given you, but they all charge annual fees AFAIK. I refuse to redeem airline awards for anything less than 5c/point, but I'm one of those entitled people who pretty much refuses to fly coach if it can be helped, so it's a lot easier. I've got a trip I'm about to cash in some points for that should come in around 7c/point if prices don't end up unusually low.
posted by wierdo at 4:04 PM on October 11, 2012

Check out the Citi Forward card. It is aimed at students and gives 5% back on various categories including bookstores... and Amazon is classed as a bookstore. No matter what you buy. No cash redemption option but you can get Amazon gift cards. Also gives the good rate at restaurants and movies. The Amazon Visa is easier to redeem but only gives 3% back.
posted by smackfu at 9:40 AM on October 12, 2012