Is it a bad idea to apply for 3 secured credit card accounts at the same time?

[f1StudentInUS]

I initially signed up for a Wells Fargo cash secured credit card, my first card, last month, but lately with their changing the ToS and extra fee, I am worried about my choice.

People have asked me not to close that recently opened card just now, because it might affect my history in a very negative way, but recommended that I join some CUs and open secured credit cards with them.

I am thinking of getting cash secured credit card from DCU and SchoolsFirst CU but am thinking - Is it a bad idea to have 3 secured credit card accounts open?

Why would I like to open 3 cards:

1. I already have one with WF, but if they start messing around with fees or do not graduate me after a year, I am going to close it. I pay an annual fee of $18 at the beginning of every year with them for this card. I have a cash secured $1500 CL.

2. DCU is known to mess around with their cards as well. No idea if I am going to have mine closed sometime later. They have no annual fee. I got approved for a cash secured $2000 CL

3. SchoolsFirst CU does not run a credit check for CL less than $1000. They have no annual fee.

I am thinking of opening a $500 cash secured credit card with DCU and SchoolsFirst CU.

That way, if either WF does not graduate me or DCU closes my CL, I still have my SchoolsFirst CU cash secured credit card of the same age as these cards and I can move over the deposits to the SchoolsFirst credit card, thus maintaining my account age and CL.

I am assuming this approach would hedge the risks posed by WF and DCU?

I also read about "thick" and "thin" credit reports, and I would like to have a thicker credit report than a thin one, since that is a “good thing” and perhaps having accounts with multiple lenders is a better way of doing that?

My understanding is that having multiple credit accounts with low credit lines is better than having fewer credit accounts with higher credit line. In other words, my understanding is

• 3 cards with a $500 credit line: Good
• 1 card with a $1500 credit line: Not (so) Good

 Does all this sound like a good plan or am I confused and misguided beyond help?

[jasimae]

I think the bigger picture is your utilization amongst all of your cards, whether secured, store, big bank or whatever.  Keep your utilization low.  In regards to closing cards...maybe it's too soon to start thinking about that.  Yes, annual fees are a $%##, but when you're in the rebuilding stage sometimes you have to take what you can get.  I wouldn't be too quick to think about closing any card as yet, especially since they are fairly new and they haven't officially "done you wrong."  It seems that you already have negative expectations from those cards and are already talking about closing them and you haven't even opened them.  If you get any of those cards, use them for what I think you are intending them to be used for, which is to build or rebuild your credit.  When your score has elevated to the magic number that you are seeking, then you apply to the prime cards and take it from there.

[f1StudentInUS]

I am trying to be not too pessimistic, and it's really upto WF and DCU whether they allow me to keep the cards.

Is 20% a good utilization rate or should it be 30%?

[Datx]

I believe most say 9% is the magic number when it comes to utilization. To build credit, all you really need is two cards. The bigger the CL, the better. Most folks on here will suggest a bigger CL instead of a small one. When it comes time where the secured card can be eligbile to become unsecured, you'll have a better chance on getting a unsecured credit line for at least the amount you have deposited in my opinion. Wouldnt make sense for a CC company to unsecure your credit card with a limit of $500 when you have $1000 dollars deposited. Also you don't want multiple CCs with low limits, you can be stuck with low limits CCs in the future when applyiing for an unsecured card.

[f1StudentInUS]

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@MyCreditStinks wrote:

I believe most say 9% is the magic number when it comes to utilization.

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Check out the article at : http://www.joetaxpayer.com/too-little-debt/

Notice the chart peaks from 1% to 20%, so 9% would be an agreement.

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@MyCreditStinks wrote:

To build credit, all you really need is two cards.

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I would really appreciate it if you could elaborate why 2 and not 3?

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@MyCreditStinks wrote:

The bigger the CL, the better. Most folks on here will suggest a bigger CL instead of a small one. When it comes time where the secured card can be eligbile to become unsecured, you'll have a better chance on getting a unsecured credit line for at least the amount you have deposited in my opinion. Wouldnt make sense for a CC company to unsecure your credit card with a limit of $500 when you have $1000 dollars deposited. Also you don't want multiple CCs with low limits, you can be stuck with low limits CCs in the future when applyiing for an unsecured card.

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 In your opinion then, I should opt for $1k CL on the two cards that I was planning $500 on?

My understanding was that as long as I kept utilization around 9%, I would build a good enough score to let these lenders issue me unsecured cards that had much higher CL than those of my secured ones for sure?

[tennisfan78]

My experience is that I have started with a $1000 secured credit card and $500 unsecured capital one card. I always kept the total utlization around 7% or 8% over the past year (thanks for the suggestions from the myfico community) .Last year around this time my FICO scores were TU-618, EQ-665.   I have checked my scores again last week and my new scores are TU-708, EQ-691.