How do you sock drawer your cards?

[kdm31091]

Yes but the aging argument doesn't completely hold up for me because AAOA is unaffected by closing accounts. They will age just fine even if you close them. Yes, they fall off at 10 years but the idea is your open accounts will have aged plenty in 10 years!

I can understand just not bothering to call and close it. To me the advantage is that you don't have to manage the card, make a charge every so often, worry about fraud, or anything, once it has been closed. Whether managing it is worth the slight trouble for someone is a personal decision, same as SD vs closing.

You make a point about bonus offers to keep using the account. In practice, I dunno how often it actually happens, but it is possible. I am not keeping a card open in the hopes of a bonus offer that may never come but everyone's different :-). PCing is a good point, but that is more an argument against SD a card because if you PC to something useful, hopefully you'll actually use it!

I won't SD a card for emergency use because the cards I have open/actively using are enough buffer for me if something does happen. I do want a low APR card someday but it is not high on the priority list simply because I have a savings account with a cushion for the unexpected and hope I wouldn't have to charge an emergency to a credit card.

[starry1]

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@kdm31091 wrote:

I don't want to have to be reminded to use a card every 6 months to keep it alive. I just do not get it. What is the point? If you don't want it just get rid of it. Clearly, if you are not using it except to be reminded to buy a pack of gum or something every 6 months, you don't really need it anymore.

As I said the only benefit I can see is util but then why not open a card you will actually enjoy, and replace the one that is collecting dust? I just do not get it, at all, but different strokes for different folks!

Emergencies.

[kdm31091]

The ideal situation for an emergency is to have actual cash in a savings account, not charging the emergency on a credit card. That should be a last resort IMO, low APR or not.

For me personally the cards I have provide enough buffer for an emergency especially since I'm still in a 0% period on a couple of them. Down the line I'd consider a low APR card but I would hope I have enough savings to cover it and make it a non issue.

I do understand the argument for low APR emergency cards/SD in that case, and I respect it. Just don't neccessarily agree 100%.

[Josh611]

My Cap 1 secured sits in my safe right next to my computer and I usually use it on one random small online thing once a month. I also have it paying for the MyFico monthly score alerts. 

[longtimelurker]

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@Anonymous wrote:

There seem to be two questions being addressed here:

1. What are the reasons to keep an SD card alive by using it occasionally?

and

2. What are the reasons to keep a card in the SD rather than closing it?

For me, the answer to #1 is primarily aging. I want some cards to give me a long AAoA and oldest T/L, and those tend to be old cards that have crappy rewards. Keeping those old ones eases the sting from all of the new cards I keep exploiting for signup bonuses.

The primary answer to #2 is pure laziness. Why take the effort to make a call and close the account? It doesn't seem to be of the slightest advantage to me.

And as a side effect to both, I'm opening myself up to bonus offers the issuer could send my way to use the card, as well as the opportunity to PC it to a card that is actually useful.

Chris.

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As I've said before, there are pretty weak reasons for both sides for #2, and as we know, things that really don't matter much can spark the most heat!

But one of the weak reasons for closing vs SD is to prevent fraud, or an imposition of AF or whaever, meaning you would need to check your statements from time to time or look out for communications etc.   For some, making a call to close means you don't have to worry about this, and might appear time well spent.

[Anonymous]

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@longtimelurker wrote:

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@Anonymous wrote:

There seem to be two questions being addressed here:

1. What are the reasons to keep an SD card alive by using it occasionally?

and

2. What are the reasons to keep a card in the SD rather than closing it?

For me, the answer to #1 is primarily aging. I want some cards to give me a long AAoA and oldest T/L, and those tend to be old cards that have crappy rewards. Keeping those old ones eases the sting from all of the new cards I keep exploiting for signup bonuses.

The primary answer to #2 is pure laziness. Why take the effort to make a call and close the account? It doesn't seem to be of the slightest advantage to me.

And as a side effect to both, I'm opening myself up to bonus offers the issuer could send my way to use the card, as well as the opportunity to PC it to a card that is actually useful.

Chris.

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As I've said before, there are pretty weak reasons for both sides for #2, and as we know, things that really don't matter much can spark the most heat!

But one of the weak reasons for closing vs SD is to prevent fraud, or an imposition of AF or whaever, meaning you would need to check your statements from time to time or look out for communications etc.   For some, making a call to close means you don't have to worry about this, and might appear time well spent.

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That's a good point that I haven't thought of.  I've never actually experienced this with a credit card, but I have had a few dormant checking accounts suddenly decide to start charging a monthly fee without warning.  Thank goodness for mint.com for drawing my attention to it.  Mint.com also has alerted me to fraudulent transactions on an occasion or two.

Chris.

[Turbobuick]

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@kdm31091 wrote:

I just do not see the point in charging on a card every 6 months just to "keep it alive" when it is otherwise totally useless. I don't need the util buffer from a totally unused card as a couple of my cards are barely used as is so the util is nil on them.

For emergencies it is nice to have a low APR card at the ready, I agree, but the best thing to have is a savings fund so you aren't charging emergencies to a credit card in the first place (should be a last resort even at a low APR). 0% is better than even 8%. Of course, I'm not trying to turn this into a lecture about savings and I agree that a low APR card can be useful for some emergencies, just not something that you want to rely on. You stated you have a rainy day fund, so I'm not saying you rely on the low APR card, but more just pointing out that no one should open a low APR card to get them out of an emergency. What they should do is have a liquid saving account and have a cushion for the inevitable so that you aren't going into debt because of an emergency.

That said, I agree with having a low APR card that you don't need to frequently use if it makes you feel better.

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This economy has ruined savings. Why put $10-20K into savings and lose money to inflation? We are forced to invest our money to see any substantial earnings. I have two sock drawer cards one at 6.15% and the other 7.9% with a combined CL of $35K. That's my emergency fund. I could sell stock, but right now it yields more than those credit cards would cost me.

[kdm31091]

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@Turbobuick wrote:

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@kdm31091 wrote:

I just do not see the point in charging on a card every 6 months just to "keep it alive" when it is otherwise totally useless. I don't need the util buffer from a totally unused card as a couple of my cards are barely used as is so the util is nil on them.

For emergencies it is nice to have a low APR card at the ready, I agree, but the best thing to have is a savings fund so you aren't charging emergencies to a credit card in the first place (should be a last resort even at a low APR). 0% is better than even 8%. Of course, I'm not trying to turn this into a lecture about savings and I agree that a low APR card can be useful for some emergencies, just not something that you want to rely on. You stated you have a rainy day fund, so I'm not saying you rely on the low APR card, but more just pointing out that no one should open a low APR card to get them out of an emergency. What they should do is have a liquid saving account and have a cushion for the inevitable so that you aren't going into debt because of an emergency.

That said, I agree with having a low APR card that you don't need to frequently use if it makes you feel better.

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This economy has ruined savings. Why put $10-20K in savings acct and lose money to inflation? We are forced to invest our money to see any substantial earnings. I have two sock drawer cards one at 6.9 and the other 7.9% with a combined CL of $35K. That's my emergency fund. I could sell stock, but they yield more than those credit cards would cost me.

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I get what you are saying, but I do not think most people need anywhere close to $20k in savings account. If your emergency is 20k, that's truly an extenuating circumstance. I think most people should have a few grand in savings instead of hoping to charge it on to a credit card.

The main reason my opinion sways that was is that despite the absolutely terrible return rate on savings (hence you should not put $20k in there, invest most of it and keep some liquid), the money is yours. It is your cash, in your savings account. It's insured, guaranteed, whatever. A credit card is simply money you have been allowed to borrow that can be revoked at any time for whatever reason. It is not truly "your" money. That is why I do not advocate relying on a card extensively for "emergencies" because you could end up getting burned with that mentality. Always have actual cash as a backup before charging yourself into debt because something came up. This is just my opinion, and as I said I see the value of an emergency card but it shouldn't be your first plan.

To say nothing about the fact that even if your APR is only 8% you are still going to lose a lot to interest compared to paying your emergency with cash/savings account.

I also think in some cases, and this is NOT directed at you or any one poster on here, SD cards for "emergencies" can lead people to overextend themselves. Knowing that credit is available to you at a low interest rate is too much for some people and suddenly, anything becomes an "emergency" and gets charged to the card. With cash, you'll be more careful generally speaking

[Turbobuick]

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@kdm31091 wrote:

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I get what you are saying, but I do not think most people need anywhere close to $20k in savings account. If your emergency is 20k, that's truly an extenuating circumstance. I think most people should have a few grand in savings instead of hoping to charge it on to a credit card.

The main reason my opinion sways that was is that despite the absolutely terrible return rate on savings (hence you should not put $20k in there, invest most of it and keep some liquid), the money is yours. It is your cash, in your savings account. It's insured, guaranteed, whatever. A credit card is simply money you have been allowed to borrow that can be revoked at any time for whatever reason. It is not truly "your" money. That is why I do not advocate relying on a card extensively for "emergencies" because you could end up getting burned with that mentality. Always have actual cash as a backup before charging yourself into debt because something came up. This is just my opinion, and as I said I see the value of an emergency card but it shouldn't be your first plan.

To say nothing about the fact that even if your APR is only 8% you are still going to lose a lot to interest compared to paying your emergency with cash/savings account.

I also think in some cases, and this is NOT directed at you or any one poster on here, SD cards for "emergencies" can lead people to overextend themselves. Knowing that credit is available to you at a low interest rate is too much for some people and suddenly, anything becomes an "emergency" and gets charged to the card. With cash, you'll be more careful generally speaking

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The "experts" suggest an emergency fund worth 6 months of current salary. A couple thousand isn't going to help much if you lose your job or suddenly become disabled. A couple grand may be okay if your emergency is a new refrigerator.

[kdm31091]

Whatever the amount is, most experts do not say "have a credit card handy for emergencies", so my point is still valid there. But at the end of the day, it's opinion and one has to do what they feel is best with their money.

If I lost my job I would not want to be sitting there racking up debt while looking for a job. Are you honestly suggesting I would be better off racking up credit card debt until I found a job vs. having a savings account as a cushion?

You are better off having money readily available in an account vs hoping you can charge it to a card. That's my opinion and sticking to it. There's nothing wrong with using a card if you know you can PIF, but if the emergency is truly an emergency you may end up paying interest...I'd rather just pay for the emergency with cash.