I have a few questions about my credit cards, looking for help!

[Anonymous]

My husband and I have 3 credit cards and a lowes credit card

We have a mortgage and a home equity line of credit.

Currently we carry a $4000 balance on our HELOC and a $1000 balance on our Lowes card

The HELOC is $10k and Lowes is $2500

The 3 credit cards are low balances $40 - $100 - $235

Limits are $650 - $500 - $1000 - respectively 

Our FICO scores are 666 and 728

The cards are all new within the past 2 years and the HELOC is barely 2 months old.

We have a car payment as well and we live well within our means and have a good savings account with a little over $3000

I say all of this to as the following question.

Should we payoff and close the 3 cards in exchange for one that would offer better rewards and/or perks? Say one from our bank?

Currently the cards we have offer no perks but also have no annual fees or any beginner type pit falls you get with beginner cards.

We've never asked for a credit line increase also.

But I am assuming we should qualify for a higher limit like $5k......i assume. I dont want to ask because i dont want the inquiry on my report.

[Anonymous]

If those cards have no annual fee just leave them open, and get the card or cards that best fit your spending and comfort level.

Eventually they will close on their own unless you are diligent and maintain use on them when you can.

And yes if you have had that lowes card for more then a year you can likely get a 10k limit if you ask for one using chat.

[Anonymous]

I dont really need a higher limit on the lowes card - I really would just like 1 credit card that has about a $3,000 limit and just use that one card mainly and let the others site with a $1 balance. 

That should be something I can get with my good credit and my level of income. - Our family brings in about $42K a year 

[rmduhon]

I'd pay off the three cards, get a CLI on the Lowe's card, let them report the changes and see what your scores are after that. By having all your cards reporting a balance you are getting penalized. And with buying a home there's a chance that you might need a larger Lowe's limit.

[Anonymous]

We already have a home, I guess i'm wondering why a credit line increase on the lowes card would be good?

Also, are more credit cards better?

Also, I was also told to never pay off a card entirely you need atleasts 1% utilization.

I can payoff the 3 cards today no problem and just have the lowes credit card with it's balance.

[Anonymous]

If those cards have no AF then I would leave them open and throw them in a sock drawer or put a small purchase on them every once in a while. I would definitely pay off the balances first. I would also call up Synchrony and ask for a $15K limit on your Lowes card and they will probably counter at hopefully $10K. $10K in my opinion is the magic number which shows banks that you can handle higher end product lines. I'd leave the heloc  alone. Finally I'd like to add that if you plan on keeping balances on cards then rewards cards are pointless because the interest you pay is more than the rewards you earn are worth. Most rewards cards have higher interest rates. If you plan on keeping a balance you are better off with a card that has a low interest rate that in itself is its own reward.

[rmduhon]

My thoughts are these: what if every appliance broke wI think 2 months? Or worse, at once? Or if you want to remodel? Lowe's has special offers for card holders. It's another type of insurance for us. And Fico penalizes you if more than half of your cards report a balance, and again if all your cards report a balance. General consensus is to have 1 card report a balance of less than 9% for optimal scoring but this is unnecessary unless you are planning on applying for new credit.

[Anonymous]

I didnt know that - so if i pay off my balances each month or carry no balance thats ok 

AND, if I get a rewards card I should absolutely pay off the balances.

Further, I should ask for a credit line increase on the lowes card, but i should do that online or over the phone?

Just a little note here, our spending habits are minimal we dont eat out much and we generally only spend money we have to spend. 

We live on a budget that we do each month and we have done this for a little over a year. It's paid off!

Also I just check to make sure my husbands only CC does have a yearly fee and it has a $650 limit and a $40 balance

How badly would it hurt to pay it off and close it or should i ask for a CC from the same company that has no fee ?

[Anonymous]

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@Anonymous wrote:

We already have a home, I guess i'm wondering why a credit line increase on the lowes card would be good?

Right now your utilization is 40% on your lowes card. Increasing the cl will lower that thus raising your score.

Also, are more credit cards better?

Yes no maybe so. You want products that serve your needs and benefit your family. That could be one card that could be 10 if you can handle that many. For your situation having 1-2 cards that you would be actively using would probably be the sweet spot.

Also, I was also told to never pay off a card entirely you need atleasts 1% utilization.

Bass ackwards. You want a low utilization. You want to use the card to keep it open but having a balance and paying interest is a big no no. As far as your credit score goes having a lower utilization is better.

I can payoff the 3 cards today no problem and just have the lowes credit card with it's balance.

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[fltireguy]

I would definitely call credit solutions and get an increase on the Lowes card to 10,000 or 15,000 first. Then, I would suggest getting rid of the annual fee card. What has that bank done for you as far as rewards, or a bonus, besides charging you a fee for the privilege of having your card? You might be well served by looking into a card from either PenFed or navy. No annual fee, nice rewards, and great financial institutions that are there to help you. Oh, and I should probably also mention, more than likely a nice credit limit to start with.