The Shopping Cart Trick it's really TWO tricks...

[cluelessoregonguy]

Yeah for most of these cards it's better to just use a decent rewards card. I did pick up 2 commenity cards that we do use. Set the wife loose in VS with the angel card and then just pay it in full. It has a small limit so it's not going to kill me and the math adds up to saving us a ton of money there. Spent $110 recently and she got a free bag, $10 GC and $20 GC + a couple free items. Not too shabby.

For store cards I mostly look for perks and interest free financing (jewelry/furniture/etc). Totally agree about not cluttering up the reports with useless cards. I've always been a fan of keeping things neat and efficient. You only need a couple decent TLs for rebuilding too so that's not really a good reason to get like 40 store cards.

[NoNonsense]

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@longtimelurker wrote:

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@NoNonsense wrote:

.  The "rationale" of those gurus is "oh, that's just 10% of score, don't worry about it."  The next thread, those same gurus are claiming the advantages of a 1.5% rewards card over a 1%.  Fine.  But, why do they care about half of one percent in one thread, and not about 10% in another?  Pay attention, people!

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If we weren't being respectful, supportive etc, I would nominate that statement for the "Math isHaaarrrd Award of the Year".   Different things, different scale, different consequences.    

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Don't worry about being supportive with me, if you hurt me I can always call my mommy.  

As for the different scale argument, I disagree, in the end, FICO score points like credit reward points can be translated into money.  Now, the exact formula it's a little tricky...

[lonelyisland]

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@NoNonsense wrote:

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@lonelyisland wrote:

Heh. I sadly knew nothing about the SC trick and applied for my store cards in the store while shopping (except Sportsman Guide). But I still use them a lot for the discounts and benefits.  I love cards that come with free alterations!!

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You may love them, collect them, use them, fondle them at night under the sheets for all I care... although I think that was CreditAddict, not you... Anyway, everything you say is fine as long as you understand that in exchange for whatever benefits, you believe you are getting, you are also not optimizing your FICO score or credit profile, things that provide their own benefits.  That is your choice to make and you;ll have to live with the consequences, as we all do.  The important thing is to do an informed decision, not following a myth.

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I won't be able to optimize my score for about four more years. After a job loss, we almost lost our house, however, when times got better, we brought it 100% current again. It means I have a long series of 150+ lates on what's now a positive trade line. Its been good for 3 years, and I have 4 to go for those marks to drop off. Until then, I'm just enjoying collecting rewards/cash back/discounts etc. Sometimes we make lemonade. 

[longtimelurker]

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@NoNonsense wrote:

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@lonelyisland wrote:

Heh. I sadly knew nothing about the SC trick and applied for my store cards in the store while shopping (except Sportsman Guide). But I still use them a lot for the discounts and benefits.  I love cards that come with free alterations!!

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You may love them, collect them, use them, fondle them at night under the sheets for all I care... although I think that was CreditAddict, not you... Anyway, everything you say is fine as long as you understand that in exchange for whatever benefits, you believe you are getting, you are also not optimizing your FICO score or credit profile, things that provide their own benefits.  That is your choice to make and you;ll have to live with the consequences, as we all do.  The important thing is to do an informed decision, not following a myth.

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I don't know what myth you think there is!   I agree that one store card and one bank is enough to optimize the credit card diversity part of the score, although you may want more lines for optimizing other parts.    But, as others have said, for most purposes store cards aren't different from bank cards for scoring purposes, so getting a $500 CL on a NoNonsense Pizza card isn't different from getting a $500 CL on a Chase Freedom.

And most say here avoid getting toy limits whenever possible.    (And I have been against the shopping card trick for that reason, swapping an Inq for a low CL might not be a gain).

But you also need to explain the value of a high FICO score vs the gains you can make from using a store card at your favorite store.   There needs to be a reason for wanting a high score, it's really not an end in itself.

[longtimelurker]

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@NoNonsense wrote:

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@longtimelurker wrote:

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@NoNonsense wrote:

.  The "rationale" of those gurus is "oh, that's just 10% of score, don't worry about it."  The next thread, those same gurus are claiming the advantages of a 1.5% rewards card over a 1%.  Fine.  But, why do they care about half of one percent in one thread, and not about 10% in another?  Pay attention, people!

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If we weren't being respectful, supportive etc, I would nominate that statement for the "Math isHaaarrrd Award of the Year".   Different things, different scale, different consequences.    

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Don't worry about being supportive with me, if you hurt me I can always call my mommy.  

As for the different scale argument, I disagree, in the end, FICO score points like credit reward points can be translated into money.  Now, the exact formula it's a little tricky...

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Well, that's sort of the point isn't it!

So let's say (as it actually the case) I put $30K a month through a credit card.   The difference between a 1% and a 1.5% card is about $1,800 a year.    If I don't have any store cards then I get a ding on part of the diversity part of the score, and the value of that is.....?  If I have too many, my AAoA will go down, also reducing my score some.  But again, what is the financial value.  And if I am using those store cards to get extra savings, special deals etc, then I am probably ahead anyway.

[NoNonsense]

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@lonelyisland wrote:

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I won't be able to optimize my score for about four more years. After a job loss, we almost lost our house, however, when times got better, we brought it 100% current again. It means I have a long series of 150+ lates on what's now a positive trade line. Its been good for 3 years, and I have 4 to go for those marks to drop off. Until then, I'm just enjoying collecting rewards/cash back/discounts etc. Sometimes we make lemonade. 

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Understood, perfectly.  As a matter of fact I went through seven years of lemonade, myself.  Although, mine was only-cash lemonade...  Keep strong.

[NoNonsense]

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@longtimelurker wrote:

So let's say (as it actually the case) I put $30K a month through a credit card.   The difference between a 1% and a 1.5% card is about $1,800 a year.    If I don't have any store cards then I get a ding on part of the diversity part of the score, and the value of that is.....?  If I have too many, my AAoA will go down, also reducing my score some.  But again, what is the financial value.  And if I am using those store cards to get extra savings, special deals etc, then I am probably ahead anyway.

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See, we come from way different places.  With money, which you say you have, and brains, which I noticed you do have, there is nothing that is going to stand in your way in the credit world.  That is why, I am not impressed by people who rapidly achieve high credit lines and FICO scores starting from nothing, if money is no object to them.  That is so, so easy to do. 

If you are going to spend 30k a month in credit cards, what bank is going to freaking care the number of store cards you have?  

So, whatever I say doesn't apply to you.  However, for people on the other side of the scale in spending, what I say, is very important.  I moved my FICO score from nothing to 825 in 15 months, with 7 tradelines, while spending LESS than $300.00 a month (yes, $300, that's not a typo).  And for my kind of people, every move we make will be watched closely by the banks, and making the right moves make all the difference in our progress in the credit world.

And I do expect that in the near future I will be able to empathise with the troubles of a $30k a month spender.  Until then, Enjoy!

[kiasmith1974]

Each of my store cards are for stores I frequent and the discounts and coupons are worth it in my opinion. But I only accepted the cards that I would use.

[longtimelurker]

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@kiasmith1974 wrote:

Each of my store cards are for stores I frequent and the discounts and coupons are worth it in my opinion. But I only accepted the cards that I would use.

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And that makes sense.  I agree with OP that there are cases here where people get, um, carried away, with the shopping card trick, getting all the offered cards because "it's free" (no HP).  But if they are low CL, as store cards usually are, you have trashed your AAoA and got a lot of junk cards in your profile.

But the same thing applies to low-limit bank cards, except there you also have the HP.  

So getting the store cards you want and can use and provide value is fine.  I guess OP is saying be aware of the tradeoffs.

[atd1970]

I have to agree with this post, and I will explain why from my own experience.

1. Shopping Cart Trick cards tend to start with extremely low limits (exemption is Giant Eagle Fuel Perks if you live in OH or PA).

2. These cards tend not to grow with your credit (exception JCrew).

3. Multiple low limit cards become unmanageable when trying to control utilization.

4. There is no such thing as a single FICO score. The FICO is honed and tweaked depending on the nature of the lending. What you thinking is helping, may hurt.

5. If you don't get an automatic approval, your application may be manually reviewed. What would you do if you saw a person with 20 accounts with a $250 limit?

6. I hate to say this but FICO is not the only game in town. Some companies are moving to different metrics. For example, the alternative metrics may include number of accounts over a certain $dollar value.