Credit Cards in's and out's, why have so many?

[Anonymous]

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@Anonymous wrote:

I noticed a lot of forum members have multiple cards, I mean more then I've seen most people have. Why do have so many?

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I'm sure there are those who multiply credit cards for the sign-up bonuses. And there are others who open new cards for the introductory low (often 0%) APR to finance their purchases. Still others want to maximize their rewards and need to have the perfect card for each store and situation. Lots of potentially good reasons for lots of cards.

But there's another rather bizarre phenomenon that we see over and over. There are those who openly acknowledge that they have enough credit cards, and that it would be in their best interest to stop applying for more. They're "going into the garden" is metaphor they use for no new cards. This isn't someone else saying they have too many cards. They themselves, in a moment of apparent clarity, announce that they know that, for whatever reasons, they would be best off without any more cards.

And yet, in many cases, they're back announcing new applications and new approvals, usually long before their announced time "in the garden" is up. They just don't seem to be able to stay away from new credit cards, even though they say they should. And that seems to be how some end up with so many cards.

Just to be clear. I am not judging them. I'm not saying they have too many cards or that they shouldn't apply for more. They are the ones saying that. They are judging their own behavior critically. That's what I find so bizarre.

[Anonymous]

I will likely have around 3-4 bank cards left when all is said and done.  I've always thought it's easier to maximize rewards putting it on one or two cards with one or two points/cash back programs than it would be spreading it out over 20 cards.  There's something to be said for cutting down on the number of websites I have to look at when I pay the bills every month.  

I use my cards for general spending, category spending and select smaller bills (student loan, car payment, rent and insurance don't go on cards because they're too much to put on one, and they charge more to put it on a credit card) like Netflix or Cell Phone. I also use it to pay off any debt-related bills.  I don't have 20 or more cards because I don't need that many.  Most people determine they have that sort of need, that's entirely up to them.  

[mitchblue]

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@Anonymous wrote:

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@mitchblue wrote:

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@Anonymous wrote:

I noticed a lot of forum members have multiple cards, I mean more then I've seen most people have. Why do have so many? Is to to improve your FICO? Do you spend X amount on each card per month to keep cards active and utilization down? Or do just keep a $0 balance on all/some of them and if so why? You have my ear...

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Many reasons, besides the above you gave, rewards/bonuses/utilization are other reasons why someone might have tons of cards. To name a few.

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Do you have certain cards for certain expenses? Like one exlusively for gas, one for groceries, one for utilities? 

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I do, yes. And some overlap.

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[Loquat]

Each card that I have (or had) serves/served a purpose at some point.  Some still serve their purpose and some less so.  I keep them because...why not?  I took the HP for them, I've grown them, they're not harming anything or anyone...so, yeah, that's kinda why I still have them.  90% of the cards I have still see active use and don't fall under the "use it or lose it" category.  Yes, sometimes it's hard to swipe my Wal-Mart store card that gives me absolutely no rewards when I can swipe my QuickSilver or Venture for example...but I still do show it love because Wal-Mart/Synch took a chance on me when others wouldn't...and that has to count for something...and for me, that's enough of a reason to keep them around.  Same situation for many of my other cards...

[Anonymous]

its all a matter of process and taste.  you do what is best for your profile. I have so many because I went so many years being anti CC until I realized they were the missing puzzle piece to my couponing. I do not get into manufactured spending or anything, but I do take advantage of sign on bonuses whenever possible.  I probably added a few too many cards last year, so if I do add anything this year its gonna have to be a legendary deal just so the "dust" can settle. lol.

I would say it is not always a good situation being on a forum like this. Just like with other social networking sites people start to compare themselves to others and that is not always an even comparison.  I would say a perfect credit situation would be to have 1 card with no BT fees, always have 1 card with APR below 10% (below 8 even better), and a few categories or point earners.  Then just get bonuses as needed and every few years condense down or close off what you dont need.

A good signature without a ton of cards to me would be Chase Freedom, Discover IT Miles, UMB Simply Rewards, Bank Of America Better Balance Rewards,  and maybe 1 annual fee card.

[TheConductor]

For me it's due to a variety of factors:

1. No point in closing a card that has no AF. I have several cards that see little use now but were part of my rebuild and I just put an occasional small expense on them to keep them alive.

2. Amex backdating - I had had an Amex card back in 2007 that was closed within 6mo of opening. When Amex used to do backdating, I opened 3 Amex cards because a) I wanted the benefits and bonuses but also b) the backdating would really help my AAoA. Also, Amex is known to be reasonably generous with soft pull CLIs (see the 3x CLI megathread).  Unfortunately Amex no longer does backdating, but this was a great way to boost your AAoA while it lasted.

3. The bonuses and benefits make it worthwhile. I could probably be at my goal FICO of 740+ by now if I had made fewer apps. But since I avoid carrying balances the rewards are more meaningful to me than the interest rates I am getting, and at my current FICO & income I am getting CLs of sufficient size for my needs. So if I can earn $500+ worth of bonuses for opening a card with and AF of $75-95, especially if that card's benefits also fit into my overall long-term needs, I app for it accepting that my FICO growth will continue at a slower rate. Note: If I hadn't decided not to buy a house in my city any time soon, my approach here would have been very different. I would have focused on FICO growth and getting the lowest interest rate possible because it would take an awful lot of CC rewards to equal the advantage of even 125 basis points of mortgage interest rate reduction over 30 years. 

4. One card I am keeping purely to keep the points balance alive. As soon as a good increased offer for the Amex Platinum or one of the Amex Everyday cards becomes available to me, I'll make that my next app and finally close the Zync.

[Chris679]

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@Anonymous wrote:

Thanks everyone for the replies, it all makes sense now. Glad I found this forum, it's only uphill for us now.

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Almost everyone on this forum has been there.  8 years ago I didn't have a pot to piss in or a window to throw it out of.  Sub-600 credit scores, not a single positive trade line, multiple outstanding collections, charge-offs, etc.  My own bank would not even give me a car loan without a co-signer.  Now I own my house, got a new jeep, 800+ FICO and when i say jump the credit card companies say "how high?"  Lot's of people here in the same boat that love to pay back all the great advice they received while re-building.

[SouthJamaica]

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@Anonymous wrote:

I noticed a lot of forum members have multiple cards, I mean more then I've seen most people have. Why do have so many? Is to to improve your FICO? Do you spend X amount on each card per month to keep cards active and utilization down? Or do just keep a $0 balance on all/some of them and if so why? You have my ear...

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In my case it was to build my credit scores. For 2 or 3 years I had 2 cards, 1 business, 1 personal, which was all I actually needed. Then I read that my scores would be higher if I had more cards. This surprised me, but I went for it, and went on a program of adding cards. Now I'm trying to go a year without any new applications, to let the accounts' ages increase and the inquiries age off, to further build my scores.

[Kevin86475391]

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@Anonymous wrote:

I noticed a lot of forum members have multiple cards, I mean more then I've seen most people have. Why do have so many? Is to to improve your FICO? Do you spend X amount on each card per month to keep cards active and utilization down? Or do just keep a $0 balance on all/some of them and if so why? You have my ear...

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I'd say the simple answer is because we're on a credit (card) forum, lol. People have their own reasons, but I think what it boils down to is that the people on the forum are interested in credit cards and sort of use them almost as a hobby of sorts. It's sort of like how if you go to a car forum you'll find a high number of people who own classic cars, or a fashion forum and discover all the people with name brand clothes.

A random member of the general population is likely just a lot less interested in maximizing rewards and other credit-related topics. Likewise, I quite enjoy investing, reading stock news, and following the market. Surprise, surprise, I trade more than most people and indeed probably more than I should (a lot of research validates the benefits of passive rather than active investing, but it's hard not to act on that hot tip you just discovered).

I'm better at resisting the urge to open cards that won't have much benefit for me down the line. I have 5 major bank cards and 1 store card. I actively use 4 of the 5 major cards and the store card. I no longer really need or want the 5th major card, but yeah, no annual fee and it doesn't do any harm just sock drawering it and making a single small charge once a month or so.

And yeah, I do use different cards for different things. I use my Chase Freedom and Discover It for category spending (5% cash back), my BofA cash rewards for groceries (3% cash back), my Citi Double Cash for rent, utilities, and pretty much everything else (2% cash back), and my Target store card for the 5% discount (and Target's one of my favorite places to shop and where I buy almost all of my non-perishables).

In addition to the rewards benefits, I find it also helps with budgeting. Like if I open my BofA statement it ONLY has grocery-related charges on it so I instantly know if I'm over-spending on groceries or doing well.

[Anonymous]

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@Anonymous wrote:

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@mitchblue wrote:

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@Anonymous wrote:

I noticed a lot of forum members have multiple cards, I mean more then I've seen most people have. Why do have so many? Is to to improve your FICO? Do you spend X amount on each card per month to keep cards active and utilization down? Or do just keep a $0 balance on all/some of them and if so why? You have my ear...

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Many reasons, besides the above you gave, rewards/bonuses/utilization are other reasons why someone might have tons of cards. To name a few.

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Do you have certain cards for certain expenses? Like one exlusively for gas, one for groceries, one for utilities? 

I do streetbob. Each of my cards serve a specific purpose(s): from rewards to balance transfers. It's a good system for me.