Credit Cards - How many to have?

[sunkissed]

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@tufa4311 wrote:

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@sunkissed wrote:

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@tufa4311 wrote:

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@Anonymous wrote:

Sorry for off topic, but did you do anything out of the ordinary to get your scores up 100 points in under a year? I am attempting the same thing 

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Sure, no problem, I gave FICO a call and offered them money in exchange for a higher score - they said ok (paid them with a credit card)...

Sorry, that was in bad form. Seriously though, I did two things, I got rid on one 30-Day late I had and dropped my UTIL from 20% to 1% and that gave me a 100+ score increase.

Read up:

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Capital-One-30-Day-Removal-Request-Update-Success/td-p/3658327

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Cool beans!  Congrats

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Over 200K in credit? Cool beans is right!

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You made me blush 

[longtimelurker]

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@Anonymous wrote:

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@longtimelurker wrote:

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@kdm31091 wrote:

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@Anonymous wrote:

42.

More seriously, the question about your spend refers to the breakdown of your spend. For instance, if you spend less than $250 per month on groceries, Sallie Mae may be a good fit, but if you spend up to $6k, Amex BCP may be better, and above $6k, a third option might be good. If you spend lots on restaurants, the answer might change as well.

Clearly, if you are rotating by month, you aren't trying to optimize rewards. This is fine, just make sure you're aware that there are drawbacks to any plan.

If you're planning on applying for a mortgage in the next two years, I would avoid applying for any further credit cards. Mortgage is usually a manual review and as such all of your inqs within the prior two years show up on the report.

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Thank you for posting this fact which some around here gloss over. "Oh the inquiries fade after 6 months"...which is true, to an extent, but if someone wants a mortgage they need to be mindful of manual review -- and the inquiries are there for 2 years. Period.

It may not be as important to wait 2 years between cards but inquiries can always be seen for those 2 years on review.

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But that also may not matter.  IME, what mortgage underwriters are most concerned about are recent inquiries that aren't reflected as new accounts yet on the CR.   So a while back I had app'd about 3 weeks before closing, and I was sent a pretty simple form (purpose of app, did it create a new account, amount borrowed or something).

If your scores fall solidly into one of the ranges, it doesn't really matter.   I think the major reason for not apping is because of the impact on your (FICO 04) score, because if that lowers you into another bucket, that can be expensive (or prevent you being approved).   But those impacts do indeed decrease over time.

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I'm not sure if it matters, or if it is a small thing, or what not, especially since i haven't applied for a mortgage in 5 years, which was well before I found this site. However, when you're dealing with a multithousand dollar monthly payment, made over 30 years, small interest changes can have big effects. I wouldn't run any sort of risk leading up to a mortgage, because if you're wrong, it will be expensive, and if you're right, the gain isn't that great. 

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Right, but you have to make informed judgements about risks.   Otherwise  you could say: never apply for a cc because maybe you will need a loan/mortgage in the next two years, (who can tell what might come up)  or if you have been foolish enough to get a card, don't use it, because you might be late, or be reported late by mistake, and not have time to clear it up before getting the mortgage

And sometimes the gain from getting a credit card will be greater than any risk, again depending on where your score is.

[Anonymous]

Between 3-5 is best in my opinion . 4 bank cards and one store card . Add an installment loan and mortgage and you got everything you need in a credit file . You don't really need the installment loan and mortgage but they can help a tiny bit when your going for max fico score .

[Anonymous]

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@longtimelurker wrote:

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@Anonymous wrote:

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@longtimelurker wrote:

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@kdm31091 wrote:

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@Anonymous wrote:

42.

More seriously, the question about your spend refers to the breakdown of your spend. For instance, if you spend less than $250 per month on groceries, Sallie Mae may be a good fit, but if you spend up to $6k, Amex BCP may be better, and above $6k, a third option might be good. If you spend lots on restaurants, the answer might change as well.

Clearly, if you are rotating by month, you aren't trying to optimize rewards. This is fine, just make sure you're aware that there are drawbacks to any plan.

If you're planning on applying for a mortgage in the next two years, I would avoid applying for any further credit cards. Mortgage is usually a manual review and as such all of your inqs within the prior two years show up on the report.

---

Thank you for posting this fact which some around here gloss over. "Oh the inquiries fade after 6 months"...which is true, to an extent, but if someone wants a mortgage they need to be mindful of manual review -- and the inquiries are there for 2 years. Period.

It may not be as important to wait 2 years between cards but inquiries can always be seen for those 2 years on review.

---

But that also may not matter.  IME, what mortgage underwriters are most concerned about are recent inquiries that aren't reflected as new accounts yet on the CR.   So a while back I had app'd about 3 weeks before closing, and I was sent a pretty simple form (purpose of app, did it create a new account, amount borrowed or something).

If your scores fall solidly into one of the ranges, it doesn't really matter.   I think the major reason for not apping is because of the impact on your (FICO 04) score, because if that lowers you into another bucket, that can be expensive (or prevent you being approved).   But those impacts do indeed decrease over time.

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I'm not sure if it matters, or if it is a small thing, or what not, especially since i haven't applied for a mortgage in 5 years, which was well before I found this site. However, when you're dealing with a multithousand dollar monthly payment, made over 30 years, small interest changes can have big effects. I wouldn't run any sort of risk leading up to a mortgage, because if you're wrong, it will be expensive, and if you're right, the gain isn't that great. 

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Right, but you have to make informed judgements about risks.   Otherwise  you could say: never apply for a cc because maybe you will need a loan/mortgage in the next two years, (who can tell what might come up)  or if you have been foolish enough to get a card, don't use it, because you might be late, or be reported late by mistake, and not have time to clear it up before getting the mortgage

And sometimes the gain from getting a credit card will be greater than any risk, again depending on where your score is.

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While there are some valid general points, most of this is reductio ad absurdum that does not relate to OP. My entire post before was about making informed judgements based on the risks; hence why I discussed the likely benefits and gains. I'm not suggesting this course of action for everybody, I'm trying to tailor specifically to OP's needs and wishes. He has cards, so the boost from another likely won't be large. While you can't tell what might come up, you can plan for things. I know when I'm planning on buying a new car, just as I know when I'm planning on switching jobs and moving. If you get laid off, that's a different scenario than I laid out, which you likely can't plan for, but that doesn't take away the effect of taking into account what you CAN plan for. 

Similarly, it isn't hard to avoid 30 day lates while planning for a mortgage. You might not even be able to get one with a late in the last 12 months or so. I don't recall the threshold, but there is some sort of bar relating to late payments. And, obviously, you can't plan for mistakes, but that is why everybody here compulsively checks their scores. They want to know if a mistake pops up so they can do something about it. 

Anyway, OP, I wouldn't sweat the number of cards you have now and I wouldn't apply for another simply to have another card. If you find on that works for you, great, but you're past the point where one card will have a dramatic impact on your score.

[Kostya1992]

As many as possible. Why leave money on the table?

[Anonymous]

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@longtimelurker wrote:

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@kdm31091 wrote:

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@Anonymous wrote:

42.

More seriously, the question about your spend refers to the breakdown of your spend. For instance, if you spend less than $250 per month on groceries, Sallie Mae may be a good fit, but if you spend up to $6k, Amex BCP may be better, and above $6k, a third option might be good. If you spend lots on restaurants, the answer might change as well.

Clearly, if you are rotating by month, you aren't trying to optimize rewards. This is fine, just make sure you're aware that there are drawbacks to any plan.

If you're planning on applying for a mortgage in the next two years, I would avoid applying for any further credit cards. Mortgage is usually a manual review and as such all of your inqs within the prior two years show up on the report.

---

Thank you for posting this fact which some around here gloss over. "Oh the inquiries fade after 6 months"...which is true, to an extent, but if someone wants a mortgage they need to be mindful of manual review -- and the inquiries are there for 2 years. Period.

It may not be as important to wait 2 years between cards but inquiries can always be seen for those 2 years on review.

---

But that also may not matter.  IME, what mortgage underwriters are most concerned about are recent inquiries that aren't reflected as new accounts yet on the CR.   So a while back I had app'd about 3 weeks before closing, and I was sent a pretty simple form (purpose of app, did it create a new account, amount borrowed or something).

If your scores fall solidly into one of the ranges, it doesn't really matter.   I think the major reason for not apping is because of the impact on your (FICO 04) score, because if that lowers you into another bucket, that can be expensive (or prevent you being approved).   But those impacts do indeed decrease over time.

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My wife's been in the mortgage business, primarily loan approvals and such, for over 20 year's with several top lenders, and reading what you stated, she agrees 100%. You DO NOT have to have 2 year's of clean, no new CC accounts, or inquiries. 6 month's out is ideal, however, even 3 month's out is ok. They don't want very recent applications because they might not be reporting yet. We plan on purchasing next summer, and she advised me to end all new applications by year's end preferably. 3 month's would be fine too, but your FICO scores should be slightly higher if your beyond 6 months. Just thought I'd offer the opinion from someone who deals with mortgage lending everyday. 

[Anonymous]

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@tufa4311 wrote:

Basically that's my question - how many credit cards is the right number to have? 

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Whatever number of cards you currently have + 1.

Chris.