How much is too much?

[krazy]

Hello Everyone,

I have 5 credit cards.With all the new changes in interest rates and increased minimum payment... i am second guessing having all of these cards. I dont have high balances ( below 30%), i pay more than minimum, and last time i checked my Credit score was around the 740's( a year ago i believe). What is the ideal number of credit cards?   I have 2 visa's, 1 master, 1 amer X, and 1 discover. I think i might close one visa which I only got because WAMU had the free credit score's monthly. This isn't my oldest card , I believe it's the 4th oldest one with the second highest interest. Thanks.

[MarineVietVet]

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@krazy wrote:

Hello Everyone,

I have 5 credit cards.With all the new changes in interest rates and increased minimum payment... i am second guessing having all of these cards. I dont have high balances ( below 30%), i pay more than minimum, and last time i checked my Credit score was around the 740's( a year ago i believe). What is the ideal number of credit cards?   I have 2 visa's, 1 master, 1 amer X, and 1 discover. I think i might close one visa which I only got because WAMU had the free credit score's monthly. This isn't my oldest card , I believe it's the 4th oldest one with the second highest interest. Thanks.

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Hello there,

You'll get different opinions about how many cards is just right. Some say 3, some say 3-5. Some say it doesn't really matter how many you have but how you use them that counts. I think you have the right amount and I certainly wouldn't close any of them unless thay have an outrageous annual fee. But you need to use them correctly to get the maximum boost to your score. (If that's what you're looking for).

Optimal credit utilization for FICO scoring purposes seems to be:
Total revolving utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

Just use them from time to time to keep them active and you'll be fine.

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work.

[smallfry]

I find it is easier to manage 5 revolving lines than it would be to handle 4. With 5 cards you can use 2 each month and let them both report balances and still keep reporting lines at 40% (2 cards) of your total open cards. It shouldn't matter that much score-wise but sometimes every point helps. I think this has a bigger affect if you have a clean report. I saw no score change one particular month when 3 out of 5 reported balances. But like everything credit YMMV.

[krazy]

Thank you for replying.  IF I were to close one though,  how long would it take to recover? I know I should pay it off before I close the account.

[DI]

I don't think my 11 cards having any adverse affects on my FICO score.

[ma_fico]

TU is the only one that barks at me for having too many accounts (28), and my FICO is still in the 780s.  I don't have 28 OPEN - they seem to be yelling about lost/stolen, closed accts, paid off mortgages, i.e. everything that would be counted in the AAoA.

Losers. 

[haulingthescoreup]

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krazy wrote:
Thank you for replying.  IF I were to close one though,  how long would it take to recover? I know I should pay it off before I close the account.

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There shouldn't be an immediate impact on your FICO scores, unless (1) you carry balances or allow them to post, and losing that card's CL results in your total util rising or (2) you have several installment accounts, including mortgage accounts, that always report a balance and "need" to have enough CC's reporting $0 to avoid the "too many accounts with balances" ding. If you haven't already, please read fused's "Closing Credit Cards", linked down at the bottom of this post in my siggy.

Have you considered assigning recurring charges to 2-3 of your cards, charges that you have anyway? You might be able to put your cell phone bill on one, your Internet/ cable bill on another, a monthly charitable donation to a third, and so forth. If these are expenses that you have anyway, there's no adverse impact to your budget by running them through a CC instead of writing a check. This would keep each card occupied, and they could live in your sock drawer while you carry the two that you actually use.

Many of us do this. It greatly helps in reducing the load on the wallet.