Having multiple cards

[K-in-Boston]

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@longtimelurker wrote:

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@K-in-Boston wrote:

Looks like you have a really good lineup!  Agree with the just use them and pay the full statement balance before the due date method.  Unless you're applying for a mortgage or auto loan soon, in which case the All Zero Except One can certainly boost your score up a little.  Do you have any open installment loans (auto, student, personal)?  Having one of those is essential for having a good credit mix (and another score boost), and you can get a Share Secured Loan from a credit union paying almost nothing in interest at all over the course of years.

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While the Share Secured Loan approach is commonly suggested here, to me it's very much an "only if needed" strategy, and way below AZEO for that matter.   Why take the time and pay any interest at all, unless it makes a demonstrable difference on something you need, not in score but in actual outcome.  Which is only going to be the case if after AZEO, you are still on a boundary.

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I'm too lazy to run the numbers, but interest on what is essentially like a $40 loan over 60 months can't be more than a few coffees. OP mentioned they were establishing credit, so while it's certainly completely optional it is a very cheap way to get a pretty big (maybe 20-30 points, but depends on profile) point boost for someone new to the credit world, which can certainly help with more favorable terms for any lending product (and insurance if they don't live in California, Hawaii, or Massachusetts).  Like I said, completely optional, but if I were just starting out knowing everything I've learned from this board it's the route I would go.  

And I do completely agree with you; scoring is based far more on utilization than credit mix.

Edit: Got interrupted writing that out and @Anonymous beat me to many of the points.

[Anonymous]

lol happens to me all the time!

And I see no reason for anyone to NOT do the SSL technique.  Even if you have 790 scores without an installment loan reporting, having that FICO pad can help if you have a month where you let higher utilization post.  It'll give you a buffer even at prime scores.  And definitely gives you a buffer at lower scores.

When I got my Amazon Prime store card at checkout, it immediately posted on my CRAs -- at 96% utilization!  Having that buffet helped keep my scores up higher than what happens when you post a maxed out card without realizing it.  I literally clicked "purchase" and two days later got an alert on a maxed out card.  Wasn't expecting that to happen.

[longtimelurker]

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@Anonymous wrote:

lol happens to me all the time!

And I see no reason for anyone to NOT do the SSL technique.  Even if you have 790 scores without an installment loan reporting, having that FICO pad can help if you have a month where you let higher utilization post.  It'll give you a buffer even at prime scores.  And definitely gives you a buffer at lower scores.

When I got my Amazon Prime store card at checkout, it immediately posted on my CRAs -- at 96% utilization!  Having that buffet helped keep my scores up higher than what happens when you post a maxed out card without realizing it.  I literally clicked "purchase" and two days later got an alert on a maxed out card.  Wasn't expecting that to happen.

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OK, my reason is basically cost-benefit.   What do I get even for a negligible amount of interest (and new item on CR and time taken):  nothing that I can see.

The whole utilization padding argument doesn't convince me, if I nearly max out a card, yes, my scores will drop that month, but if I am not planiing on applying for anything, I don't care.  And if I am apping, I can pay early if I really want to.   Yes, if I max out and can't pay it off AND need to app, then it might be helpful, but not a good situation anyway.

So I can see for some situations it can be a helpful score boost, but I certainly wouldn't say everyone should do it (well, I am not going to anyway!).   I guess I am just morally opposed to paying any interest when it can be avoided.

[Shooting-For-800]

I use mine every single day for every single purchase I can.

1.5%-2.0% cash back = well over $1000 per year for free.

I try to make sure that every card I have gets used for something every few months just to keep them all active.

[Anonymous]

I cycle my existing cards a lot to make sure they are all being utilized. If you have a cash back or rewards earning card. Make sure that you optimize them based on how much they are going to save you money and of course your lifestyle. I don't know what type of AMEX card you have, but as for me, the BCE takes the most of my Grocery spending 3% cashback, and the Blue Delta if I ever do eat out which happens at least four times a month (2X Miles per dollar spent), all other miscellaneous spend goes to Discover specially if theres a good 5% cashback on rotating category spending. I put all my small automatic payments (Netflix and Barnes and Noble Magazine Subscriptions) on the lowest limit card Capital One, that way, in case I forget to pay off the balance before the statement cuts, I'll know for sure that my utilization is still not going to go above 8% of my Invididual limit for that card and 0-1% on overall available limit across all cards. 

[Anonymous]

I’m so excited to be on my credit journey and most importantly to be able to have a fico forum family to help each step of the way! Well this is how I see it! 😬😬 Thank you so much for your feedback and wise words! I will incorporate these strategies as I continue on! So much wisdom on this thread! Thank you again ficofam 🙌🏽

I’ve seen where some have multiple C.C (more than 3) and also C.L.I frequently?! This whole thing is a bit overwhelming how does this happen? Not as if it bad, it’s just how does one master it all to be successful and incorporate new C.C as well? I read a lot to be proactive instead of reactive and this CREDIT LIFE is exciting and scary at the same time😊😔😀.

[ls2016]

I've learned more about credit on this forum than I have from my parents, who should have been my #1 teachers. Stay around and you'll learn all the ins and outs right here. I went from $300 in total credit limits, to over $76,000 in TCLs in a year and a half, just from reading the experiences here and learning. The biggest lesson I've learned here is credit is just that: CREDIT and must be paid back. Therefore, I don't spend what I know I cannot pay back. If it's not truly needed, I don't buy it. I'm not a shopper and have no expensive hobbies, so I consider my self truly blessed for that. I'm still rebuilding and only let report $5 a month on one card out of the $76000 that I have available. This approach surely works for me. My credit is improving monthly, even with 5-8 baddies on my reports and I'm definitely happier. Best wishes to you.

[Anonymous]

The best advice I can offer is don't use them like credit cards. Use them like DEBIT (NOT DEBT) cards, and you will have no problem. There are very few reasons someone would actually "need" a credit card. I put emphasis on the word need. I got a couple just to help out my scores, then it became a bit of a hobby. Not one that I would recommend for most people, but if you're on these forums you probably know what you are doing or have done. Hopefully not the latter lol.

[BurgeoningHope]

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@ls2016 wrote:
I've learned more about credit on this forum than I have from my parents, who should have been my #1 teachers.

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If I may, and without knowing your parents, I'd ask for a more charitable view of their efforts. As a reasonably intelligent and a most certainly loving parent, I(we) didn't have this resource, nor anything like it, at your age. We didn't have access to our scores at all, not for the longest time, and even when we were able to get them - only upon having been denied - we weren't entitled to know what everything meant, let alone the ins and outs of managing the information. It was guess-and-go for most of us. It's not like we learned this from our parents either.

I'm grateful to this resource, to Reddit, and everyone else willing to talk openly of their credit challenges and solutions. You're right when you said "Stay around and you'll learn all the ins and outs right here." That's what I'm doing, and passing along to my kids - finally  

(Edited to change "unintelligent" to "intelligent", in spite of the evidence(!))

[AverageJoesCredit]

Better late than never