What do you do with all your credit?

[SpiceIslander]

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@UncleB wrote:

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That's an excellent question!

It's really different for everybody, so I don't want to make a 'general' statement, but I can tell you what I do.

Each of my cards has a purpose; basically it has to "earn" it's place in my wallet.  I do exactly what you say you're going to work out with your husband... I know what card to use for each purchase to maximize my cash rewards.  Some folks collect points or 'miles', but I prefer straight "cash", it just works better for me.  The points (MR points on Amex cards and UR points on Chase cards) tend to work out well for folks who travel often, or like to redeem their points for lucrative gift cards.  There's no right or wrong on this part... just do what works best for you.

I am currently saving my cash rewards to get a new laptop.  At my current rate, I should be on schedule to get a really nice one next summer, and that's if I don't get any new account bonuses (which is always a temptation... LOL)

As for the really 'huge' credit lines, well, that too is a 'personal perference' thing.  While there are a few folks who truly have a need for giant credit lines, some folks just like to see how 'high' they can go, similar to seeing how many cards they can 'collect'.  My own spending is rather modest, and my current credit lines are more than sufficient for my current needs, including allowing for 'padding' for utilization.  My 'sweet spot' for credit lines is $5k on the low end, and $10k-$15k on the high end.  Realistically, there's no way I would spend that much in a month, but it's helpful to have that 'pad' I mentioned above for those times I do carry a balance.  Since your credit score is said to be based on overall utilization, you can use available credit on one card to make up for another card that doesn't have as much available credit, at least for scoring purposes.

Even my high APR cards have their virtues; my Sam's Club MasterCard has an outrageous 22.9%, but it give 5% cash back for gas, 3% for travel and restaurants, so as long as you PIF you can do quite well.  I also have a Care Credit account, with a breath-taking 26.99% APR (!).  I recently used it for some dental work, but if I pay it off in 24 months I will pay no interest at all... which is a really good deal.  It's all about knowing how to 'work' the system, so to speak!

Congratulations on your new home, and good luck (and have fun!) building your credit card portfolio! 

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A big plus to Uncle B's post. I carry a balance on 4 of my accounts and continue to pay them off without further use. I use my other cards based on the rewards. However, I actually use every single account each month. My goal is at least 1% of the limit but the reward cards get the most luv! LOL! I have more credit than I need but I'm not complaining. If they're willing to give me CLIs, I'll take them.

Congrats on your new home!

[Anonymous]

Thank you everyone who has responded!

tourtisewins....my husband wants ONE card... BofA Dodgers MC 3-2-1 rewards. For the rewards? Nope. He's a huge dodgers fan. We get that and he can pretty much spend as he wishes without me telling him anything lol. *sigh* husbands

[Anonymous]

I don't have the enormous credit limits, but I do have a few cards. The store cards I use when I can get a better discount for using them. I haven't paid "full price" for clothing and household items for a long time now. As for my other cards, I use them like extended pay debit cards. For example, before I got my credit cards, I was a cash n carry kind of a girl. But life happens. In my case, I was out of state, heading home over a holiday weekend when an 18 wheeler decided he needed to be in my lane more than I did. I ran onto the shoulder, over some road debris Atlanta seems to have in abundance and did over $700 damage to the front suspension of my car. So add that to 2 days in a hotel, and being the first of the month, my rent, power, car note, insurance, and cell phone were all due. I paid EVERYTHING and ate peanut butter sandwiches and ramen noodles for a week until I got paid again. It would have been so much better if I could have thrown even one of my bills onto the credit card, and paid it over the next week or 2. I don't want huge limits. Just a couple of 5k limits would have me set. 

I still cash n carry a lot anyway. I get points from my bank, and I don't like to put spend on my cards close to the statement date or while a payment is pending. I know it's crazy, but I just can't shake that habit.

[OmarGB9]

For the most part I watch my limits just sit pretty lol. I have pretty much my yearly income in credit, and it's kind of crazy. There's no way I could pay down that much money if I ran them up. Also as other have stated, it's nice to have that UTIL cushion in case you need to carry a balance from time to time.

[mitchblue]

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@OmarGB9 wrote:
For the most part I watch my limits just sit pretty lol. I have pretty much my yearly income in credit, and it's kind of crazy. There's no way I could pay down that much money if I ran them up. Also as other have stated, it's nice to have that UTIL cushion in case you need to carry a balance from time to time.

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Similar. Ironically my pay, after taxes, is the exact number of my CL. I use all my cards, except the Green, and they all have their purpose. They're all in my wallet,except the Green. 6% or 1.5% is better than 0%. Thank you, credit.

[Anonymous]

Truthfully I dont need this much credit and I'll be letting two Amex cards go next week. Im about $3k under my annual income at the moment and only three - four cards are used regularly but they all served a purpose at one point or another so I dont regret any of the cards I currently have. But Im not into hanging on to what doesnt get used either. You have to keep in mind some people have high incomes and high monthly spend so larger limits might be necessary for them. Although I would have been fine with limits around $5k for general spend Im glad I have a couple higher limit cards bc I have a fairly large purchase (for me) coming up and in this case I needed a higher limit card. I think its unlikely Citi would have been comfortable granting me a $15k credit line if the rest of my cards were all under $5k at the time. Not saying it would have been impossible I just think its easier for a lender to grant a higher limit if they see you can handle it.

[NRB525]

Up until mid-2014 I was working with 11 cards plus 2 closed cards, most of those paying down balances from back in the day.

As I've reached a tipping point in reducing balances, improving scores and thus being able to apply for new cards, the new cards all have some sort of sign up bonus, and some sort of earnings, and usually some direct link to a Frequent Flyer or Hotel Loyalty points program I am trying to maintain and build.

The legacy cards that I still have open are still important for their history and the relationship with each bank, and each bank is willing to keep giving me more cards, because of that good direct history, as well as their push to market the rewards cards that have annual fees.

I will have to close a few of these eventually, or downgrade to minimize/avoid annual fees, but for now I'm just enjoying the benefits of having the ability to app for cards I want, and getting instapprovals that seem to get better with each application.

As the overall balances go down, and the number of cards with spend requirements keep refreshing, several of the cards are having difficulty getting more than single digit dollar value charges in a month, but with how new they are, I don't expect any issues yet.

[Anonymous]

Ooooh that's an interesting situation, having as much credit and annual income. I have a LONG way to go to get there. Which is a good thing. People who use credit responsibly get more credit than people who don't so it goes without saying that those with huge credit limits USUALLY don't charge them up to the max (barring a major event like poster said about car accident).

I like the idea of the UTIL cushion and I love the idea of someday my credit limits matching my income level. Although initially I'll be happy to just cover expenses. Lol it's the 9th of the month and I've already earned $12 in rewards on my QS1. Now I need to pay it and charge it up again (it's due the 28th so I may have 3 cycles before its time to pay it each month). To me, that's free money. Its earnings I don't have to pay taxes on as long as I PIF lol. But what if it was $100, $200 a month? That's where I want to get to.

What are you guys seeing as average cash back (or miles equivalent) per month?

[deltatee]

Interesting conversation, thanks for starting it @bmhill.

i am not someone who collects credit cards. I prefer to keep the number of cards to 4 or 5 so the cards have the chance to age and stick with me for a long time.  As part of my long term hopes for each card I get, I have a pretty strict no AF rule.  Even though your spending might support an AF card one year, spending patterns chang, and I don't want to be stuck with n AF that isn't earning its keep. I made that mistake with the Chase Mileage Plus card.

Basically, I run most of my spending through cards because it saves me from having to balance my checking account and worry about pending bills and large holds placed on the account as temp authorizations (like hotels).  Also, I used to use my debit card for my spending until someone tried to buy thousands of dollars of fraudulent purchases with my account info.  This shut down my bank account for a couple weeks while getting everything resolved. In my experience, credit cards have better fraud protection and are easier to dispute.,

so with that in mind, I use QS as my general spend card, and I supplement my spending with the higher categories on SM and Discover.  As for my Amex, I only use it at Costco, I am not particularly upset by the new Costco arrangement and hope citi takes over and provides some decent rewards. Finally, my Amazon Visa is my oldest card, and always has 0% BT offers on it, so I use it for BTs mostly. Finally, I use Red Debit at Target and Kohls for the great offers you get there.  I like having right around $10k on each card because some months it isn't hard to put nearly $1k on the card and with mid-cycle reporting, it is nice to not have to worry about a high utilization hit.

i don't have a desire to amass a massive ceedit limit but just enough that I can report a balance without taking a huge hit and can carry a balance if necessary without maxing myself out.

edit: autocorrect typos

[baller4life]

My limits just sit pretty on my reports. Nice util padding. I maximize rewards whenever I can. But, truth be told, I'll never come close to using all of my limits. However, it's comforting to know I have the credit available just in case I do need it. From experience, when you need credit you can't get it. So, best to already have it on deck!