Store Cards: Still Necessary?

[Anonymous]

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@Ghoshida wrote:

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@Repairman wrote:

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@Anonymous wrote:

If you shop often enough to merit having a dedicated credit account for the merchant. Some have loyalty programs for discounts.

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Perhaps I wasn't specific enough. What my question is, is do you need a mix of regular credit cards and store cards to improve your credit.

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No.

Store credit cards are at the (almost) bottom of the credit hierarchy. 

The credit lords live thusly (top to bottom) : mortgage, car loans, student loans, misc instalment loans, big-bank credit card, store credit card, consumer financial agencies. 

It's good to have a mix but it's recommended to move up. If you have only store cards, get a few big bank cards. If you have only bank cards, get an instalment loan in the mix.

However, mix is a very small component of the overall picture. It's easy to get 750+ by not having more than one kind of debt. 800+ may be difficult. But when you're 750+, you'll start getting approved for most products and at pretty favorable rates.

That said, people like getting store cards because (a) they get good value (read: discounts) out of them and (b) they're easy to get sometimes, so people app for them when big banks aren't giving any cards.

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This post, exactly.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

You will always get conflicting stories; many like store cards and others stay clear from them. As far as benefits I’d suggest googling and searching in the search box on the forum. I mean no disrespect but it gets highly annoying scrolling through the forum with the same questions being asked over and over or reading someone’s every thought.

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This -I mean no disrespect but it gets highly annoying scrolling through the forum with the same questions being asked over and over or reading someone’s every thought.

Some people are new to the forum and may ask questions that have been asked over and over again.  Yes, it can be frustrating but they need answers to their questions also. It is best to move on from the thread if you are bothered by the questions asked.

Like I stated I didn’t mean any disrespect but I didn’t think there was anything wrong with me suggesting Google just like the many other members have suggested beforehand or my favorite one “spoon feed/” with little to no problems. Other posters express frustration over the redundancy of the AMEX 3x CLI threads rather often, that’s ok. We were all new at some point but Google wasn’t/ or isn’t. No one can answer what store cards are good or necessary because everyone spends different, it’s the generalization. My wants and needs aren’t the same as the next.

As the OP suggested I didn’t have to “read”, well sometimes you don’t know what the question is, so I do apologize for reading. I didn’t make a statement to create an argument. I probably could have said it a little nicer and maybe search and share some websites that would be of any benefit. or simply just moved on I didn’t come online to play t*t-for- tat I was just stating my opinion. From here I will be moving on from this thread before I offend anyone else. Have a good night.

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[Anonymous]

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@Repairman wrote:

Do you need a mix of regular credit cards and store cards to improve your credit.

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A similar question would be ... do you need a Ferrari?

No, you do not need a Ferrari,  No,  you do not need store cards.

But they sure are nice to have if you want to move quickly from point A to point B

[Anonymous]

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@Anonymous wrote:

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@Repairman wrote:

Do you need a mix of regular credit cards and store cards to improve your credit.

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A similar question would be ... do you need a Ferrari.

No, you do not need a Ferrari,  No,  you do not need store cards.

But they sure are nice to have

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I need a ferrari. I don't need store cards.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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@Repairman wrote:

Do you need a mix of regular credit cards and store cards to improve your credit.

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A similar question would be ... do you need a Ferrari.

No, you do not need a Ferrari,  No,  you do not need store cards.

But they sure are nice to have

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I need a ferrari. I don't need store cards.

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Come now, nobody NEEDS a Ferrari

[Anonymous]

They're not needed for credit building. But it won't hurt you to apply for one you feel will enhance your savings or affinity.

[Repairman]

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@Anonymous wrote:

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 I probably could have said it a little nicer and maybe search and share some websites that would be of any benefit. or simply just moved on 

{Mod cut. Mea culpas were offered. Let it go}

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[Ghoshida]

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@Anonymous wrote:

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@Repairman wrote:

Do you need a mix of regular credit cards and store cards to improve your credit.

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A similar question would be ... do you need a Ferrari?

No, you do not need a Ferrari,  No,  you do not need store cards.

But they sure are nice to have if you want to move quickly from point A to point B

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This analogy suggests that by having store cards, your credit can grow faster.

However, according to an anonymous underwriter who started a credit Q&A thread, big banks don't look favorably at store cards. So, while it's possible to do some utilization padding, add some new lines with no HP, and manage to get the FICOs up, real credit may still not move up fast because in the eyes of the lender, all credit is not equal.

The right analogy for the Ferrari here would be a secured instalment loan. You essentially pay interest on your own money (overpaying for an exotic product that not many others have) and possibly go from 750 to 800 faster.

[Anonymous]

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@Ghoshida wrote:

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@Anonymous wrote:

---

@Repairman wrote:

Do you need a mix of regular credit cards and store cards to improve your credit.

---

A similar question would be ... do you need a Ferrari?

No, you do not need a Ferrari,  No,  you do not need store cards.

But they sure are nice to have if you want to move quickly from point A to point B

---

This analogy suggests that by having store cards, your credit can grow faster.

However, according to an anonymous underwriter who started a credit Q&A thread, big banks don't look favorably at store cards. So, while it's possible to do some utilization padding, add some new lines with no HP, and manage to get the FICOs up, real credit may still not move up fast because in the eyes of the lender, all credit is not equal.

The right analogy for the Ferrari here would be a secured instalment loan. You essentially pay interest on your own money (overpaying for an exotic product that not many others have) and possibly go from 750 to 800 faster.

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Dubious. 40 tradelines with a combined limit of $10,000 is hardly utilization padding. But that's not what this thread is about.

Store cards: Useful for brand loyalty.

[Anonymous]

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@Ghoshida wrote:

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This analogy suggests that by having store cards, your credit can grow faster.

However, according to an anonymous underwriter who started a credit Q&A thread, big banks don't look favorably at store cards. So, while it's possible to do some utilization padding, add some new lines with no HP, and manage to get the FICOs up, real credit may still not move up fast because in the eyes of the lender, all credit is not equal.

The right analogy for the Ferrari here would be a secured instalment loan. You essentially pay interest on your own money (overpaying for an exotic product that not many others have) and possibly go from 750 to 800 faster.

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LoL, why does "The Underwriter" keep popping up in threads over here?  Keep that trash over at CB...they are the same fools that started this whole "science" about store cards are bad.

Nobody found it suspicioius that The Underwriter just up and disappeared once the questions started getting difficult?  Nobody bothered to check his crendentials...just some guy coming in claiming to be "The Underwriter for the biggest bank in the world".

How nobody failed to question his BS is beyond me.

Back to topic, YES, store cards do speed up your build proess used correctly.  Because they allow you to have building tradelines while your credit is recovering.  Sticking only with "credit cards" it is difficult to acquire tradelines...store cards are those tradelines you can get while rebuilding.

So doing it the "recommended" way, you get 3 seured cards and wait a few years to improve.

The Ferrari method, get your 3 secured cards and get 20 more store cards.

When you have "rebuilt" your credit, with a Ferrari, you have 20 positive tradelines established for at least 1 year.  With the "stay away from store cards" way, you have 3 positive tradelines with 1 year.

You mentioned the FICO bonus for installment loans, that is true.  But you failed to mention the bonus you get for # of Tradelines and AAoA.  Do you realize my AAoA practically never drops now, so I have maximum AAoA bonus.  Doing it your way, everytime you add a new credit card, you lose AAoA and your score lowers.

I am proof positive that it works...screw what The Underwriter says.

.Less than 2 years ago, my score was only 480...my current score ~775... almost 300 point swing between dropping baddies and having 40 lines of positive credit waiting for me once baddies disappeared.

Those 40 store cards gave me the lift up into excellent credit as soon as my baddies dropped.  And because I didn't waste all my inquiries trying to acquire those 20 tradelines, I had free inquiries left to get Prime Cards immediately instead of the usual waiting.  

2 years after 480, I have most of the Prime banks and my score keeps jumping up and up... and my collection is up to 65 store cards.

But...but..but... The Underwriter said store cards are bad  

Store Cards = Ferrari = Vroom Vroom.....