How much credit one really needs? When to stop?

[Anonymous]

I stopped when I figured I had a good card for almost any purchase. I actually think I made a mistake along the way and applied for more than I need.

One of my goals was not to pay any annual fee. I'm not churning. I just want to get a good % back on my purchases, it's like a small raise in my opinion.

Basically, I think this is a good set of no-fee cards that cover most situations:

-- CITI Double Cash at 2% back for most things

-- Amex blue cash for the 3% back at grocery stores

-- CITI Costco visa for the 4% on gas and for shopping at Costco

--  CHASE Amazon card for 5% on Amazon and because it has no foreign fee (for vacations)

I don't have the last one, at the time I applied it was only 3% back at Amazon so I got the store card for 5% back, and I have the BoA Travel Rewards card which has no foreign fee and gets me 1.5% back. I sock drawer that except for when I travel.

You can probably put together a slightly different list and there may be some category important to you that wasn't important to me, but my guess is you can come up with a list of between 3-5 cards that get you good points/cash-back for 95% of your spending. 

That was my goal. If you look at my siggy you can see I have a bunch of other cards--but for example the FirstTech Visa -- I really never used it. Just got carried away. I probably don't really need the Discover card either. The RBC Card I got when I first moved to the US--it's the US subsidiary of my Canadian bank and they gave me a card based on my existing Canadian history at a time I couldn't get much else. So I don't regret that--but since I got a real card I never use it.

[sarge12]

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@score_is_497_hehe wrote:

Good day/night everyone!

I see that some people have tens of credit cards, total available credit is well over 50, 100 or I saw someone posted about  > 250k in available credit. It got me thinking why would you want so much? So much that you will not ever ever use? In what situations in your life you would need so much credit available? Do I miss something here? 

Plus given that most people here are educated in terms of credit, they most likely will never ever go on the shopping spree until they drop to spend so much credit money I'd think, no?

I've tried to search for topics like this, but couldn't find anything, so here is why I post this thread.

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I personally have 16 cards, all of them considered premium cards. I use maybe 3 or 4 of them fairly regular and have about 150k combined credit limits. The reason I have this many is not complicated...I was bribed. Most of my cards were obtained for the SUB of 100 to 250 dollars...hey it is free money. I am a strict transactor, and always PIF, but have found it difficult to resist the free money provided for the fancy new sock drawer cards...they just do not take up much space. Some may have fancy reasons or think there is a strategic reason for having so many, for me, it is just the bribes.

[medicgrrl]

1) I like the various rewards 2) I don't want to worry about utilization 3) I don't want all of my eggs in one basket. Never know what's going to happen with various banks/lenders 4) I want an alternative in case of an emergency, like my card is lost or stolen.

[Revelate]

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@atomicfront wrote:

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@score_is_497_hehe wrote:

Good day/night everyone!

I see that some people have tens of credit cards, total available credit is well over 50, 100 or I saw someone posted about  > 250k in available credit. It got me thinking why would you want so much? So much that you will not ever ever use? In what situations in your life you would need so much credit available? Do I miss something here? 

Plus given that most people here are educated in terms of credit, they most likely will never ever go on the shopping spree until they drop to spend so much credit money I'd think, no?

I've tried to search for topics like this, but couldn't find anything, so here is why I post this thread.

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Other than renting a car why do you need a credit card at all?  If I need to rent a car I can put it on my company corporate charge card so for me even one is not really  necessary I can use my debit visa card for everything else like I did for six years.  

 I would say it is fun to get CLI.  And it is fun to have huge limits.  Most people outside of his forum probably have 1 or 2 credit cards.  I really have no need for credit cards and have gotten 13 in the last couple of months. It is addictive.  Maybe when I get to the point where I am sure I will get every card I apply for it will be less fun. 

You have a lot more cards than you need.  Why do you have so many?

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Because eventually while wearing the numbers off your debit card, you realize you can't afford to pay for a house in cash, and oopsie, shoulda got credit cards to build a credit score.

Also to be fair, need is subjective: I have more cards than I need now but that's only because the CSR came out and married to an FU basically obliterated my use case for many of them... that's not exactly a common occurrence on these forums or in general consumer land: it's extremely rare that a card's release re-landscapes the market.  

At this point I'm just farming the extraneous tradelines for payment history, though once I get to clean file status my scores might be where they're pretty much irrelevant, and may close them.

[pipeguy]

I current have 22 active cards with about $350k in credit limits, in addition my wife has 12-15 cards with over $150k in limits.

I/we plan on retiring in 2-3 years and will be able to use up a combined $85k in Home Depot and Lowes credit for "low or zero percent project financing" to update and refurb our 30 year home with hopefully a quick sale (DC Metro is a strong real estate market) which means carrying the financing for just a few months. My utility will not even take much of a hit due to over all credit lines. I just had a $5000 vet bill which went on CareCredit 18 months 0% (wife's card) - no big hit to the utility.  

After we retire we'll probably cut back on the number of cards as our needs will be less, smaller house - more traveling, much lower expenses over all. Do we currently "need" as much available credit as we have, probably not, but our scores are all mid to high 700's to low 800's (between the two of us) and we have a good income - don't see the down side of having a lot of credit right now, in a couple of years I'll adapt to the new lifestyle. One thing I will say is getting a new "Home Loan" will be easier and if they "request" I kill off available credit, that'll be painless.  

[RockinRay]

I stopped applying for new cards when I left this forum a couple of years ago.  

We have an excellent portfolio and at one time, the value of open credit was $462,000. We have since forth closed many of the older cards that do not provide value to us. I've not kept track of the current portfolio value. It is still pretty hight though and since coming back here, I just opened new NFCU CashRewards card.

I think really 4 or 5 cards max would work for us.

This is a great thread.

[Anonymous]

I think this is fundamentally a subjective question without just one good answer. Personally, I look at it as having several factors:

1) How much credit do you think you will realistically need for most circumstances? What is your income per year? What are your other expenses?

2) What do you envision yourself as using credit for most regularly?

3) If you think about it carefully, do you envision an emergency circumstance that could affect you that your expenditures wouldn't be covered for by insurance or something else?

4) How much in the way of monthly payments can you afford to keep up? Can you pay in full (PIF) at any time or regularly? How much over the minimum payment, assuming you can't pay PIF, are you able to pay per month within your current budget?

5) Do you envision yourself using the cards you get regularly, or are most of them basically just going to sit there?

Think about all those and the answers will usually give you a pretty fair figure as to how much (revolving) credit you can handle.

P.S. For my own part, my eventual goal is to have one, maybe two, good rewards cards of each of the four major brands (Discover - which I have now - MC, Visa and Amex) plus a few store-type cards that I actually plan to use regularly (I have Amazon already; I envision myself adding Walmart and Paypal Credit, not necessarily in that order, in due course; anything beyond that will really depend on whether I patronize said store regularly). I would like to have the Citi Costco Visa but my BK and my having burned Citi on that BK (with mortgage) will be obstacles to that for at least a while yet. Being a conservative sort, I don't ever envision having more than $10-$15k on any single card, max.