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Valued Member
rwt
Posts: 102
Registered: ‎01-14-2014
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Why does everyone apply and have so many cards?

I am new to the site and I want to say thanks for the advice and help I have received so far. I have been reading threads and have been wondering why so many people apply for and have so many cards. I hope this isn't coming off as being rude, I am only asking to gain knowledge.  Score wise does it help to have 10 cards vs 3 or 4? 

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Mannymal
Posts: 54
Registered: ‎12-23-2013
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Re: Why does everyone apply and have so many cards?

The more credit available you have, the lower your utilization, and thus higher credit score. 

 

I personally have six credit cards, and two store cards. I have that many simply  because I used them for their individual perks. But I may close one or two. 

 

 

AMEX BCE: $3000, CHASE Freedom: $4000, Discover IT: $2,500, Barclay Apple: $1700, Barclay Arrival: $3,000, GE Amazon Store: $6000, Amazon CHASE Visa: $500, American Airlines Federal Credit Union: $6000, Macy's: $600. GARDENING 01/15/15

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Valued Member
rwt
Posts: 102
Registered: ‎01-14-2014
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Re: Why does everyone apply and have so many cards?

Thankyou, I was just curious:smileyhappy: 

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Valued Contributor
indiolatino61
Posts: 1,483
Registered: ‎11-10-2012
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Re: Why does everyone apply and have so many cards?


rwt wrote:

I am new to the site and I want to say thanks for the advice and help I have received so far. I have been reading threads and have been wondering why so many people apply for and have so many cards. I hope this isn't coming off as being rude, I am only asking to gain knowledge.  Score wise does it help to have 10 cards vs 3 or 4? 


...how else can I build a credit card castle...lol...:smileylol:? No...seriously...sometimes it's for utilization, sometimes it's to take advantage of the bonus offers and yes, sometimes it's an addiction. Welcome to myFICO and the best of luck to you.

 

 

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Valued Contributor
red259
Posts: 2,170
Registered: ‎06-05-2013
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Re: Why does everyone apply and have so many cards?


rwt wrote:

I am new to the site and I want to say thanks for the advice and help I have received so far. I have been reading threads and have been wondering why so many people apply for and have so many cards. I hope this isn't coming off as being rude, I am only asking to gain knowledge.  Score wise does it help to have 10 cards vs 3 or 4? 


No. You can have a great credit score with three cards only. You should only apply for cards you need/can use. At the moment I have five credit cards and in 6 months I will be picking up 1 to 2 more. However, in six months I will likely be closing some cards and a year I will be closing some more. The reason is that some of the cards I signed up for was just to get the bonus and the annual fee was waived the first year. Other cards I signed up for was because I needed them to build up my credit report or establish a relationship with a particular lender. I will likely close those cards unless I can get a decent retention offer or the AF waived. Every six months I reevaluate my cards and see which cards are working for me and which are not. The ones that do not work for me I get rid of. Some of my cards without AFs I will keep around to help with my AAoAs (for example I see no reason to ever close my chase freedom). This is how I use credit, but that does not mean its right for everyone. Honestly, I would probably not have more than 7-8 cards active at any one time. Some people have many more and that is alright as long as they are staying on top of everything. For me I am very selective about every single card I apply for and the value of it. It is true that with more credit you can get credit lines for overall utilization, but if you stick with the right 2-3 cards your credit lines will eventually rise as well. 


Starting Score: EQ: 714, TU 684
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Senior Contributor
myjourney
Posts: 26,659
Registered: ‎02-07-2013
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Re: Why does everyone apply and have so many cards?


indiolatino61 wrote:

rwt wrote:

I am new to the site and I want to say thanks for the advice and help I have received so far. I have been reading threads and have been wondering why so many people apply for and have so many cards. I hope this isn't coming off as being rude, I am only asking to gain knowledge.  Score wise does it help to have 10 cards vs 3 or 4? 


...how else can I build a credit card castle...lol...:smileylol:? No...seriously...sometimes it's for utilization, sometimes it's to take advantage of the bonus offers and yes, sometimes it's an addiction. Welcome to myFICO and the best of luck to you.

 

 


Oh really you know I like that answer .... nice my friend nice ... Lol

 

OP

no It doesn't matter if you have 10 cards or 4 it's what fits your spending habit and what rewards you for using them based on what you'll spend anyway.

It make no difference to scores how many cards you have weather it's 10 or 3

This is only one part of many things that go into Fico scoring so concentrate on the overall health of your CR's and anyone can have high scores and a better financial picture 

Welcome to the forum

 

"Intelligence plus character--that is the goal of true education"
Last 5 apps 6/13


Member
user9582673
Posts: 8
Registered: ‎12-30-2013
0

Re: Why does everyone apply and have so many cards?

I'm also fairly new :smileytongue: but from what I've learned I see that there are some indirect reasons why it's a good idea.


The more cards you have, the more "weight" there is when calculating average age. Example: you have 1 card, it's 10 years old, your AAoA is 10 years. versus you have 10 cards, all gotten at the same time, so they're all 10 years old and your AAoA is also 10 years. If you were to decide to get a new card, for situation A your AAoA would then be 5 years, one at 10 and one at 0. For situation B, your AAoA would be around 9 years, doesnt take as much of a hit. The benefit there is that whenever you want to apply for a new one, you don't have to worry about the hit to AAoA as much, since it's much smaller. Specifically for people who want to churn rewards , but maintain a decent AAoA, it's important to have a heavy weight.

another situation is that someone has 1 card for many years. Now, even if they've gotten more, they'll depend on that card as being their oldest trade line, and be reluctant to close it. If however their oldest card is one of several all opened during the same app spree, they can close it if they really wanted to.
The actual effect on your score maybe be negligible, but the psychological effect could be important.

 

I'm sure there are other, better reasons that people have.

New Contributor
otter69
Posts: 79
Registered: ‎09-14-2013
0

Re: Why does everyone apply and have so many cards?

Several reasons, many of which have already been mentioned...

 

  • Rewards- I'll probably get close to (or perhaps over) $1000 in rewards this year, and almost every card I have has its purpose in achieving that. 
  • Utilization- I currently have nine(soon to be eight) cards and doing that helps keep my utilization under 10% without having to micromanage by making sure I pay before the statement closes. 
  • Relationship- At one time, my Amex BCE was a useful card, but since I've gotten the Sallie Mae card, it's rewards don't really excite me anymore. But it does help to have a relationship with Amex (for backdating) and their customer service is top notch.
  • Diversification- In much the same way that you shouldn't buy stock in one (or a few) companies, it also makes sense to have lines of credit with several different banks. Because if one goes through financial troubles and decides to cut everyone's credit limits, you have other issuers you can count on.

But you have to be a disciplined person to have so many large open lines of credit. I jave $31,000 in available credit and I know one bad undisciplined splurge can put a damper on my financial picture for a while.


I don't do senior citizen activities like Bingo, needlepoint, shuffleboard, square dancing, and ABSOLUTELY NO GARDENING!
Valued Member
rwt
Posts: 102
Registered: ‎01-14-2014
0

Re: Why does everyone apply and have so many cards?

thanks guys, i get it now

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Established Member
RockySC
Posts: 72
Registered: ‎01-13-2014
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Re: Why does everyone apply and have so many cards?


Mannymal wrote:

The more credit available you have, the lower your utilization, and thus higher credit score. 

 

I personally have six credit cards, and two store cards. I have that many simply  because I used them for their individual perks. But I may close one or two. 

 

 


Wait a second, now even I'm confused. When they take into account your utilization they count the credit line vs. balance of all cards combined? Does that mean if you have a $0 balance on all cards but one is almost maxed out that you could still have a more than acceptable utilization? I thought the utilization was on a card by card basis.


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