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A change of paradigm from CL to Rewards

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Fico2Go
Established Contributor

A change of paradigm from CL to Rewards

fter 6 months of getting back into the credit card industry I've come to realize that a high CL doesn't equate to high value.  Unless I am carrying a balance or need high CL to lower my utilization it really doesn't make financial sense to keep unused products. 

 

For me now it's all about rewards.  I find myself juggling between cards that offer high rewards.  If only there were a way for me to get NPSL on 5% rewards on key categories.  

 

If I could turn the clock back I'd refrain from Apping cards offering less than 3% or 2 points per $ spent.  I am not happy  about having multiple products gone unused.  

Having these unused cards also deter other issuers from issuing new approvals.  

 

Just something to consider.

 

 

Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013
Message 1 of 22
21 REPLIES 21
takeshi74
Senior Contributor

Re: A change of paradigm from CL to Rewards

One should never be considering just one aspect of any card whether it's CL, APR, AF, rewards earn rate, brand, processing network, etc.  It's always a matter of looking at the entire picture and the suitability to the individual's needs/wants.

Message 2 of 22
longtimelurker
Epic Contributor

Re: A change of paradigm from CL to Rewards

I've been preaching that (OP's view) for ages!  Providing you have utilization under control (i.e. you can determine what is reported) and you are not spending time paying an issuer many times a month because of a way too low CL, a CLI has no value. Instead focus on rewards and sign up bonuses.    But it appears the thrill of a high CL seems to override that.  So we have people chasing high CLs, sometimes with the justification that other issuers will match.   Which, even if true, is pointless, getting more of something with no value still adds up to no value.

Message 3 of 22
clocktick
Valued Contributor

Re: A change of paradigm from CL to Rewards

I'm in full support of closing cards that are not used.  It doesn't seem like a lot of people are though.  I've never had lenders seem deterred from open accounts, however.

11/30/08 TU 648 EX 672 EQ 656 SEPT 2014 TU 787 EX 789 EQ ???
Amex BCP $24.1K/Clear $8.5- Sallie Mae $27.5 -Cap One QS $7.5 - Chase Freedom $7.5/United $5k/CSP $20k/Ink- Citi DP $9.5/Dividend $13k/HHHx2 $15k/16.4/Reserve $4.5k Best Buy $1940 HD $1701- Discover IT $15k - Elan $8k GEMB Lowes $20k - Macy's $2k - Kohl's $800




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Message 4 of 22
mongstradamus
Super Contributor

Re: A change of paradigm from CL to Rewards


@clocktick wrote:

I'm in full support of closing cards that are not used.  It doesn't seem like a lot of people are though.  I've never had lenders seem deterred from open accounts, however.


I maybe in the wrong but I like to keep open any card that has no AF. I think there is no harm no foul just SD no AF cards, but again i could be wrong in that practice. 



EX Fico 804 11/16/16 Fako 800 Credit.com 11/16/16
EQ SW bank enhanced 11/16/16 839 CK fako 822 11/16/16
TU Fico discover 10/19/16 814 Fako 819 Creditkarma 11/16/16
Message 5 of 22
longtimelurker
Epic Contributor

Re: A change of paradigm from CL to Rewards


@mongstradamus wrote:

@clocktick wrote:

I'm in full support of closing cards that are not used.  It doesn't seem like a lot of people are though.  I've never had lenders seem deterred from open accounts, however.


I maybe in the wrong but I like to keep open any card that has no AF. I think there is no harm no foul just SD no AF cards, but again i could be wrong in that practice. 


Well, there are times where you can be wrong:

 

a) At a certain point, a lender might decide you have too much credit with them, and refuse to give you another card.   Now you might be able to offer to close one of the cards at that point and recon, but others find it easier just to avoid this by closing the cards that they don't need.

b) And probably at a later point, and/or with certain lenders, they may decide that you have too much open credit (among all lenders) and not give you a card.   This happens usually when overall credit limit is several times of your earnings. 

c) Fraud and/or issuer changes.   If you S/D a card you are slightly less likely to pick up on new charges, whether from fraud or because the issuer had decided to institute an AF (or non-use fee) or whatever, and this can snowball into late and penalty charges.  But basically the more open accounts, the more chance that something bad will happen to one!

 

And also there is the case where a lender basically sees that you haven't been using your cards with them (because they are S/Ds), and, with apps that are borderline for some reason, may decide that your future profitability is in doubt and so reject you.  If you had closed the card a while back, this looks less bad.

 

But in general, keeping them open or closing them doesn't make a whole lot of difference to most people.

 

 

 

Message 6 of 22
Fico2Go
Established Contributor

Re: A change of paradigm from CL to Rewards


@longtimelurker wrote:

 

But in general, keeping them open or closing them doesn't make a whole lot of difference to most people.

 

 

 


 

I'm not trying to be like most people.  I plan to make a profit with my credit cards.  Smiley Happy

 

Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013
Message 7 of 22
longtimelurker
Epic Contributor

Re: A change of paradigm from CL to Rewards


@Fico2Go wrote:

@longtimelurker wrote:

 

But in general, keeping them open or closing them doesn't make a whole lot of difference to most people.

 

 

 


 

I'm not trying to be like most people.  I plan to make a profit with my credit cards.  Smiley Happy

 


OK, but I thought you knew all this.   To really make a profit, at least in today's environment, basically:

 

MS > Sign Up bonuses >>> Rewards

 

and then CLs become important on the critical cards.   So in your case I would garden to get rid of the no longer wanted inqs, when able (Jan/Feb 2015) move your BCP limit to BC, and then app for high sign up cards.  Then you would be all set.

Message 8 of 22
Fico2Go
Established Contributor

Re: A change of paradigm from CL to Rewards


@longtimelurker wrote:

@Fico2Go wrote:

@longtimelurker wrote:

 

But in general, keeping them open or closing them doesn't make a whole lot of difference to most people.

 

 

 


 

I'm not trying to be like most people.  I plan to make a profit with my credit cards.  Smiley Happy

 


OK, but I thought you knew all this.   To really make a profit, at least in today's environment, basically:

 

MS > Sign Up bonuses >>> Rewards

 

and then CLs become important on the critical cards.   So in your case I would garden to get rid of the no longer wanted inqs, when able (Jan/Feb 2015) move your BCP limit to BC, and then app for high sign up cards.  Then you would be all set.


 

May I ask why you still carry the BCE when the BC is clearly more advantageous? 

 

 

Discover IT $19,000 == 12/2013
AMEX 12/2013 ---BCP $12,000 === BC $23,000 ----- 04/2014
CHASE SLATE $5,700 === 12/2013
BoA 123 $6000 === 12/2013
Barclay Rewards $1500 == 12/2013
Message 9 of 22
longtimelurker
Epic Contributor

Re: A change of paradigm from CL to Rewards


@Fico2Go wrote:

@longtimelurker wrote:

@Fico2Go wrote:

@longtimelurker wrote:

 

But in general, keeping them open or closing them doesn't make a whole lot of difference to most people.

 

 

 


 

I'm not trying to be like most people.  I plan to make a profit with my credit cards.  Smiley Happy

 


OK, but I thought you knew all this.   To really make a profit, at least in today's environment, basically:

 

MS > Sign Up bonuses >>> Rewards

 

and then CLs become important on the critical cards.   So in your case I would garden to get rid of the no longer wanted inqs, when able (Jan/Feb 2015) move your BCP limit to BC, and then app for high sign up cards.  Then you would be all set.


 

May I ask why you still carry the BCE when the BC is clearly more advantageous? 

 

 


When I got the BC, I moved most of the CL from my BCP to BC, then downgraded the BCP to a BCE to avoid the annual fee.  Keeping it to take advantage of any of the Amex special offers, and as something to PC if anything exciting comes up.  But I don't use it.

Message 10 of 22
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