How many credit cards should I own?

[Anonymous]

Hey guys, I'm currently rebuilding my credit after 2 debts which have been paid off (1 settled and 1 paid in full).  I recently got a Chase Freedom with a CL of $1,200 and a amazon store card with a limit of $600.  Based on MyFico score simulator if I were to open another credit line my scores would jump up a very good amount (around 40 across the board).  My question is how many credit cards would be a good number to own.  I currently only charge MyFico on my Freedom which I pay in full before the statement ends, other than that I usually charge to my debit.  With my current scores, which card or cards would be ideal for me in the long run?

[kdm31091]

What are you looking for in a card is  the first question -- low APR? Certain categories of rewards? General spend? This will guide the responses. There is no "one size fits all" card that will work well for every person.

For FICO purposes, it seems having 3 or 4 cards is what you really "need" for the ideal score. Having more beyond that is largely preference/utilization buffer/different rewards/etc.

[Fico2Go]

I would say to the OP that the # of cards needed is at least 3 and enough to keep UTIL under 20%.  Below 10% best.  

Anything over this is probably costly in terms of time to manage which to use for what and when.  

[Anonymous]

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@Anonymous wrote:

Hey guys, I'm currently rebuilding my credit after 2 debts which have been paid off (1 settled and 1 paid in full).  I recently got a Chase Freedom with a CL of $1,200 and a amazon store card with a limit of $600.  Based on MyFico score simulator if I were to open another credit line my scores would jump up a very good amount (around 40 across the board).  My question is how many credit cards would be a good number to own.  I currently only charge MyFico on my Freedom which I pay in full before the statement ends, other than that I usually charge to my debit.  With my current scores, which card or cards would be ideal for me in the long run?

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The sky is the limit.

[kdm31091]

I would advise that you take it slow. You are just starting to rebuild.

You can add one or two more cards (depending on what benefits you want -- waiting for your reponse) to help utilization and give you some more rewards but IMO I wouldn't go crazy yet.

[NRB525]

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@Fico2Go wrote:

I would say to the OP that the # of cards needed is at least 3 and enough to keep UTIL under 20%.  Below 10% best.  

Anything over this is probably costly in terms of time to manage which to use for what and when.  

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For OP purposes, given the scores still in the 500's I'd say there is no rush to get that third card. Just using the existing two cards will see a gradual increase in scores with payment on time.

After the scores rise to over 600, then look at a third card, and the CL that is given will likely be larger than it would be today. Adding a third card in the mid-500s probably gets another minimal limit (less than the two on hand) that isn't particularly useful.

[Anonymous]

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@NRB525 wrote:

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@Fico2Go wrote:

I would say to the OP that the # of cards needed is at least 3 and enough to keep UTIL under 20%.  Below 10% best.  

Anything over this is probably costly in terms of time to manage which to use for what and when.  

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For OP purposes, given the scores still in the 500's I'd say there is no rush to get that third card. Just using the existing two cards will see a gradual increase in scores with payment on time.

After the scores rise to over 600, then look at a third card, and the CL that is given will likely be larger than it would be today. Adding a third card in the mid-500s probably gets another minimal limit (less than the two on hand) that isn't particularly useful.

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+1, Credit is not a race.

I'd even advise waiting until scores crest ~660 to have a shot at anything truly prime.

[Fico2Go]

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@NRB525 wrote:

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@Fico2Go wrote:

I would say to the OP that the # of cards needed is at least 3 and enough to keep UTIL under 20%.  Below 10% best.  

Anything over this is probably costly in terms of time to manage which to use for what and when.  

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For OP purposes, given the scores still in the 500's I'd say there is no rush to get that third card. Just using the existing two cards will see a gradual increase in scores with payment on time.

After the scores rise to over 600, then look at a third card, and the CL that is given will likely be larger than it would be today. Adding a third card in the mid-500s probably gets another minimal limit (less than the two on hand) that isn't particularly useful.

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I would disagree on waiting to get the 3rd card.  Getting it asap will help with AAOA in the long run which will help in establish other credit.   I honestly don't think scores in 500-600 range will impact much in terms of the limits given on  the 3rd card.  So why not just work on the aaoa now?

In two years time the CL on the three accounts could be the same but the prospect for a higher limit product will be higher. 

[Anonymous]

I generally have no preferences on APR as I pay in full or close to full before the statement closes.  I know that I shouldn't rush but I get impatient.  I think its been 3 months going on 4 that I have had the Chase Freedom card with no change to credit score so I can't tell if I'm using it correctly (due date = 15th of month, statement date = 21st of month)  I always pay off any balance I carry by the 14th.  Anyway thanks for all the input guys.

[kdm31091]

3 or 4 months feels like forever sometimes but it's not long with regards to establishing a history. Take your time and go slow. I would echo you could add another card for utilization and to show a mix but I wouldn't go further than adding one more at this time.