Reasons to get (or avoid) a third card

[Anonymous]

Hi all,

At the beginning of the week, I was approved for a Capital One Quicksilver with 10k limit. I also currently have an Amazon Rewards card by Chase with a 1k limit. In the thread I posted about applying for the Quicksilver, another member recommended that I apply for another credit card as well to diversify. I'm curious about this and wanted clarification. What are the reasons to apply for another card at this point?

My total average age of accounts as reported by FICO is over 10 years, and my average age of accounts for just credit cards (3 closed plus 1 active and new one) is over 5 years according to Credit Karma. 3 inquiries on Equifax & TransUnion and 2 on Experian (Capital One checked all 3 twice since they lost my application info and I had to re-apply by phone. The other inquiries are for internet service from just under 1 & 2 years ago, respectively). Scores are all around 800 (although one dropped to 799 after the Capital One application). 

I don't need an additional new card (as I just got one), so my question is whether and/or how it's worthwhile to have 3 cards on principle.

[noobody]

Why don't you dispute the HP if they lost your application AND pull your credit? they can not happen at once

[Anonymous]

Not sure if it's worth it to dispute, not really sure how to go about it, and don't want to generate ill will with a company I just started to do business with.

[coldnmn]

The only ill will I see is a customer service rep to lazy to find your original application and found it easier to pull your credit a second time. Your just correcting a wrong. Remember your credit limit is due to risk verses reward not the goodness of their heart. Your the customer that makes them money. All they care about is getting paid.

[driftless]

The reason for the third card it is is commonly thought that FICO's algorithm rewards 3+ in its scoring. The comment about diversity is if one bank should lock down your credit cards, think fraud alert, etc., then you will still have cc's available to use from a second bank. For those reasons my wife and I carry cards from both Cap One and Chase.

[Anonymous]

An additional reason for a third card would be diversification. Spreading your relationship out among multiple lenders can help protect you in the event that one lender decides to lower your limit or end the credit relationship (which they retain the right to do at any time).

You also have only a 1k credit limit with Chase, and they are not known for giving credit limit increases often without a hard pull. Your limit may stay at 1k for a long time.

Utilization is also an additional factor. Right now you may keep your utilization on your cards low, but if you had a need to carry a balance due to an unexpected expense, it would help you to have a bit of wiggle room on your credit cards.

Seeking out a low APR card would be an additional reason. Capital One cards often have a fairly high APR, and the Chase card probably has a middle to high APR. If you seek out a 3rd card with a low APR, such as a 7% APR card from a credit union or an 8% APR card such as Barclay Ring, this can provide you with a low interest option in the event that you do need to carry a balance, even if only for a short time.

Hope this helps.

[Anonymous]

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@Anonymous wrote:

An additional reason for a third card would be diversification. Spreading your relationship out among multiple lenders can help protect you in the event that one lender decides to lower your limit or end the credit relationship (which they retain the right to do at any time).

You also have only a 1k credit limit with Chase, and they are not known for giving credit limit increases often without a hard pull. Your limit may stay at 1k for a long time.

Utilization is also an additional factor. Right now you may keep your utilization on your cards low, but if you had a need to carry a balance due to an unexpected expense, it would help you to have a bit of wiggle room on your credit cards.

Seeking out a low APR card would be an additional reason. Capital One cards often have a fairly high APR, and the Chase card probably has a middle to high APR. If you seek out a 3rd card with a low APR, such as a 7% APR card from a credit union or an 8% card such as Barclay Ring, this can provide you with a low interest option in the event that you do need to carry a balance, even if only for a short time.

Hope this helps.

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+1

[Anonymous]

Another point in favor of applying for a third card now is that your credit scores are excellent, and since you already took the AAoA hit by applying for the Capital One card this week, obtaining a 3rd card now would allow you the above benefits, and would not result in an additional AAoA hit. 

[Anonymous]

A card with a nice sign-on bonus for a future trip? hotel stay? If you don't like AF, there are a handful of rewards cards where they will waived the AF the 1st year. Good luck deciding.

[Anonymous]

Humu's reasoning to get a low interest rate card in case I need to carry a balance at some point makes sense. I applied for the Barclay Ring as suggested. Their site said they're reviewing the application and will let me know within 10 days. I got the same message from Capital One when I initially applied online with them. I wonder if the fact that I'm opted out of pre-screened credit offers is factoring into that.  *shrug*

At any rate, that's my last credit card application for a long time. Unless Barclay is really sensitive to inquiries, I should be approved without issue. Thanks all and I'll post if/when they give me the card.