topic Re: Questions for folks with few cards in Credit Cards

Questions for folks with few cards

VanderSnoot — Sat, 11 May 2019 15:20:43 GMT

This question isn't aimed at people who are building/rebuilding credit, but rather for people with excellent credit who resist app sprees and choose to have only a few cards.

I see a lot of people on this forum with 10 or more cards (and sky high credit limits to go along with them). But then there seem to be a cadre of folks with (roughly) 3-5 carefully selected cards who probably capture 90% of the rewards/benefits of having 10+ cards. To the folks in the latter category, which cards did you select and why? Are there any downsides to this approach?

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 15:41:34 GMT

So I am victim to having many cards, so I know I'm not necessarily your demographic. But 95% of my spend goes on just a handful of cards. The reason I have many cards is because (1) 5% rotating categories can suck for 1-3 quarters in a row for me and (2) SUBs are amazing.

Let me outline the cards I would keep if I closed many today:
UBER - 4% dining, 3% travel, $50 subscription credit, phone insurance (don't use: 2% online, 1%)
USB Cash+: 5% categories, nonrotating. I choose 5% transit (UBER, Lyft, Zipcar, subway) and 5% fast food
Citi DC: 2% everything, extended warranty, accidental damage, Citi price rewind
BoA Cash Rewards: 3% online shopping
Amex blue cash pref: 6% groceries (Walmart Groceries online) and 3% gas

All other cards, I could close and not feel much pain. They were for the SUB or because I got them and don't need their category anymore. I also like the thicker profile, I feel like it gives me more power to close cards in the future and still be "thick".

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 16:03:17 GMT

I've got 7 cards that I use routinely, all focused on maximizing cashback, only one of which has an annual fee. My 12-month rolling cashback average hovers around 3.15% on all CC spend.

Rotating 5% category cards:
* Chase Freedom
* Discover it
* U.S. Bank Cash+

5% on specific merchants:
* Chase Amazon
* U.S. Bank REI Co-op

Everyday cards:
* Alliant Cashback (currently in second year at 2.5% on everything; will downgrade to flat 2% due to AF increase this year)
* Barclays Uber

I consider myself a maximizer, meaning that even though the REI card only saves me about $10-15 annually, I consider it well worth the organizational effort. I dig the spreadsheet and bank statement game required to support a large assortment of bank accounts and cards; others don't.

If I weren't into absolute maximum cashback and wanted to prune this list, I think there's a pretty good case for holding a 3-card deck containing Uber, one rotating 5% card, and one flat 2% card. Depending, as always, on your own spending patterns.

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 16:13:21 GMT

I also fall in the category of having many cards, but for the last year or so 95% of my spend has been on two cards. I would say most people with fewer cards either prefer simplicity or categorized all their purchases over time and picked the cards to maximize their rewards.
For me, most of my money goes towards groceries, restaurants and flights, so the Amex Gold is a no brainer for me, then I use the Amex EveryDay for basically all non category to go all in on points, and every few months rotate the Costco Visa, PenFed PCR, and BofA Cash Rewards as a backup when Amex isn’t accepted. I could squeeze a little more out if I used my other cards during rotating categories but I don’t spend that much outside of the mentioned categories and I prefer simplicity now more than I used to. I think it can be very easy to keep just a few cards around if you pick the right cards for you.

Re: Questions for folks with few cards

wasCB14 — Sat, 11 May 2019 16:12:03 GMT

I have 16 cards, but most of my spend goes on just a few:

CSR: A great all-around travel card. Good earning rate and great travel protections.

BBP: A good earning rate with a not-too-inconvenient $50k spend cap for 2x. Great tools for tracking expenses, too.

CFU: Everyday Costco spend and an off-category card for places that don't take Amex (or to mitigate the BBP cap).

Costco: Price protection and extended warranties from trusted merchants.

Schwab Platinum: Peace of mind when dealing with a sketchy merchant.

Re: Questions for folks with few cards

pinkandgrey — Sat, 11 May 2019 16:16:29 GMT

Well I don’t know if I fit in this category lol but I DO have only 3 cards at the moment. For me it’s about ease of use. With what I spend, the cards I have are plenty for me. Even if I were a millionaire who spent thousands and thousands on CCs every month, I still don’t know that I would have a ton of cards. It’s just a headache trying to figure out which of your 54 cards to use for a purchase. That’s just me, though!

I suppose the “downside” would be potentially losing out on certain rewards/categories, but it’s a worthy sacrifice for my sanity lol

Re: Questions for folks with few cards

Gollum — Sat, 11 May 2019 17:05:25 GMT

I had only one credit card for thirteen years: a Capital One credit card. During the Great Recession, Capital One raised the interest rate on my maxed-out credit card ($10,500), which irritated me. After I got that balance paid off, I read about Simmons First (now its name is Simmons Bank). I decided I wanted a credit card from them because it had a low interest rate, and getting it would prove to myself that I no longer had bad credit, so I got the Simmons First (now Simmons Bank) no-rewards credit card.

Eight years later, I decided to give credit card rewards a try. I didn't have an American Express card, so I got the BCE. Then I decided I sorta liked getting credit card rewards. I felt a little guilty about the high fees American Express charged merchants, though, and some merchants don't take American Express. I also decided I didn't want a credit card from one of the "too big to fail" banks that got bailed out during the Great Recession, so I waited about a year (I think), then I got a BECU rewards credit card.

Now I feel like I'm covered for rewards credit cards, but I found out some credit unions have lower interest on their no-rewards credit cards than my Simmons Bank credit card has. In about three weeks it will have been one year since I got my BECU rewards credit card, so I plan to apply for one more credit card (a low-interest no-rewards credit card from a credit union), then call it good. I plan to keep my Simmons Bank credit card because I like Simmons Bank, I like having their card, and my Simmons Bank credit card has ten years of account age now. I figure I'll alternate between it and my low-interest credit union credit card (that I hope to get next month) to pay at one particular small merchant (for super-premium dog food, mostly).

I plan to keep my Capital One credit card because it's my oldest credit card, and there's a thirteen year difference between it and my second oldest credit card, but I reduced its credit limit to $500 and I treat that credit card as an ugly thing that I purposely avert my eyes from but has a necessary, unpleasant chore associated with it (use it a little to keep it active) that I do around Christmas and my birthday each year (so I don't forget to use it). I doubt Capital One would close it, but I suspect I would actually feel good about it if they did.

Re: Questions for folks with few cards

GApeachy — Sat, 11 May 2019 17:37:27 GMT

@VanderSnoot wrote:
Are there any downsides to this approach?

I don't belong here either but......as far as a "downside", I thought that most "High Achievers" have many cards (tl's)plus a solid mix and have aged them well, kept. utl% low vs. a low amt. of tl's(cc's.) Not so sure that "less is more" as far as 800+ scores....would love to hear from the "High Achievers" here.

Don't shoot me for butting in but I do find this ? interesting and hopeing the demographic you're reaching out to pipes up.

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 17:38:18 GMT

@VanderSnoot wrote:
This question isn't aimed at people who are building/rebuilding credit, but rather for people with excellent credit who resist app sprees and choose to have only a few cards.

I see a lot of people on this forum with 10 or more cards (and sky high credit limits to go along with them). But then there seem to be a cadre of folks with (roughly) 3-5 carefully selected cards who probably capture 90% of the rewards/benefits of having 10+ cards. To the folks in the latter category, which cards did you select and why? Are there any downsides to this approach?

There's 2 sides to every coin. Rewards are great if you PIF every month and don't let the banks scrape back money on interest. Most with a larger collection of cards just simply have been doing it longer than others. Some collect more cards to diversify things in case a particular lender decides to reduce limits or shut down cards. A few just get carried away and hoard CC's.

A good amount of people though only use 25% of their cards for specific spend while hanging onto the additional cards for other purposes or just nostalgia. Those of us that have been through a collapse and rebuild tend to hold onto cards longer than really necessary . Also, after a rebuild we tend to go for the larger limits as a sense of accomplishment rising from the ashes.

For those showing 3-5 cards and not spreeing... I'm going to take a stab in the dark and say they just aren't as focused on either expanding their cards/CL or have already been there, done that, and moved onto a more laser focused approach by trimming the excess from their wallet.

There's really no difference from a scoring standpoint if you have 3-5 or 20+ accounts if they're aged and you make your payments on time each month. The older your profile gets the less impact you see from opening additional accounts. So, maybe those with 3-5 cards might still be "young" in that their profile is under say 5 years old and when they were starting out might have found this place and asked for suggestions early on.

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 17:47:14 GMT

@GApeachy wrote:
I don't belong here either but......as far as a "downside", I thought that most "High Achievers" have many cards (tl's)plus a solid mix and have aged them well, kept. utl% low vs. a low amt. of tl's(cc's.) Not so sure that "less is more" as far as 800+ scores....would love to hear from the "High Achievers" here.
Don't shoot me for butting in but I do find this ? interesting and hopeing the demographic you're reaching out to pipes up.

I first hit 800's with about 10 accounts that had been open for 8 years. Mind you these are just the open accounts that haven't been paid off or refinanced over the years, closed for lack of desire to keep them open, or some other reason.

There are the well known factors for maxing your score but, if you're just living life most of those fall into place like having a loan (car/mortgage), payment history on your CC's, etc. Once you get the ball rolling it's a slow battle uphill to 600/700/800 because the factor they dont' talk about is time. When you look at particular reports you pull on yourself you'll notice they're not looking at just a snapshot of 24 months but, up to 72 or more month of history.

Re: Questions for folks with few cards

GApeachy — Sat, 11 May 2019 17:50:18 GMT

@Anonymous wrote:
@GApeachy wrote:
I don't belong here either but......as far as a "downside", I thought that most "High Achievers" have many cards (tl's)plus a solid mix and have aged them well, kept. utl% low vs. a low amt. of tl's(cc's.) Not so sure that "less is more" as far as 800+ scores....would love to hear from the "High Achievers" here.
Don't shoot me for butting in but I do find this ? interesting and hopeing the demographic you're reaching out to pipes up.
I first hit 800's with about 10 accounts that had been open for 8 years. Mind you these are just the open accounts that haven't been paid off or refinanced over the years, closed for lack of desire to keep them open, or some other reason.

There are the well known factors for maxing your score but, if you're just living life most of those fall into place like having a loan (car/mortgage), payment history on your CC's, etc. Once you get the ball rolling it's a slow battle uphill to 600/700/800 because the factor they dont' talk about is time. When you look at particular reports you pull on yourself you'll notice they're not looking at just a snapshot of 24 months but, up to 72 or more month of history.

Yes, that's what I meant by "aged them well".....a lot of factors involved but time is a biggie.

Re: Questions for folks with few cards

KLEXH25 — Sat, 11 May 2019 18:05:05 GMT

I’m only a year in myself, but I’m actually quite interested in this thread because I’ve been back and forth on what my approach will be. When I first found this forum, I was fascinated with all the people that had 10+ cards, and would go on app sprees, especially because I’ve gone the past 10+ years without a credit card. I couldn’t help but get caught up in all the hype. But the more I’ve read, the more I think that’s not the approach for me. I don’t mind spreadsheets and maximizing rewards, but I also think it can be done with 3-5 cards. As such, I’m looking to be a lot more selective with my choices and spreading out my applications until I achieve my ideal portfolio. Which also probably means closing cards when they no longer serve their purpose or meet my needs.

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 18:57:01 GMT

@KLEXH25 wrote:
I’m only a year in myself, but I’m actually quite interested in this thread because I’ve been back and forth on what my approach will be. When I first found this forum, I was fascinated with all the people that had 10+ cards, and would go on app sprees, especially because I’ve gone the past 10+ years without a credit card. I couldn’t help but get caught up in all the hype. But the more I’ve read, the more I think that’s not the approach for me. I don’t mind spreadsheets and maximizing rewards, but I also think it can be done with 3-5 cards. As such, I’m looking to be a lot more selective with my choices and spreading out my applications until I achieve my ideal portfolio. Which also probably means closing cards when they no longer serve their purpose or meet my needs.

Everyone has to start somewhere and it's daunting if you haven't had credit before. At least you have in the past and somewhat know what you're getting into already. The biggest hurdles starting out is getting out of hobbit land with the sub 5K limits. Once you're beyond that it gets easier to move up the ladder.

3-5 cards to start out with and age them into something more than they started is a good foundation as long as you can pick 2 of them to hold for a long term anchor. They may not be pretty but, they should grow as you use them. One of my techniques while nuturing cards was to put a recurring bill on them and set them on auto pay. It generates activity and positive points w/o thinking about it. I've done this with some of my now higher limits bringing them from opening limits of say 5K to now over 50K with minimal interaction with them.

Some lenders won't grow like that though like Cap1 for instance in order to grow you have to really spend on them to get a CLI. Others like Amex are fairly easy to do it with when you 3X them every 6 months. Funny enough it seems BOA is an easy target if you get your foot in the door as well. I was able to grow them from 10K to 65K in a little over a year with their 3 month CLI interval. BOA is even better now since they dropped the HP for CLI's 5/2018.

So, based on that I would probably shoot for Amex / BOA and even Chase can be a good grower if you play the game right with them. Chase grows more from additional accounts and then shifting the new CL to the existing account. For instance I asked them for a CLI once and got 5K but a few weeks later opened a new account for 25.9K and nothing changed in my prrofile.

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 18:58:42 GMT

Perhaps the major downside is missing SUBs, but that is not for everyone.

A more minor one is when a card is nerfed or your needs change, then you need to find a replacement. But this probably isn't a big deal if you have been indeed minimalist, you won't have many inqs or new accounts, removing some barriers to a successful app for the new card of your choice.

Also make sure you have some issuer diversity among your few cards: if they are all Bank X and Bank X suddenly decides they don't like you....

Re: Questions for folks with few cards

Aim_High — Sat, 11 May 2019 19:03:02 GMT

I've had a credit file for 35 years so I'm not your average member in that regard. A lot has changed in the credit card world in that time.

One thing I've seen and learned is that all in life, including credit cards, is not only subject to change; I can guarantee it WILL change and not only that, it will change substantially in ways you never imagined.

So the best cards of today are probably not the best cards of tomorrow. Lenders will come and they will go. I opened my Discover account in 1993 when it was the first and ONLY card which offered any kind of cash-back reward, and it wasn't even a true 1% at that time. It was heresy in the banking world! LOL The cash-back world has changed dramatically in 25 years.

I have chosen to hold on to some cards because they are my oldest cards and help my account age. I have resisted the urge or tendency to 'hoard' credit cards. I periodically make a list of my cards, credit limits, interest rates, fees, and what rewards I get from them. I have tried to keep my list useful, so if I have cards that do not fit into some strategy for the short or long term, I consider cancelling them. However, I can't imagine ever getting down to only three cards and selecting them solely on the basis of their utility in giving me cash back in the present day. All that is subject to change. I also try to stay informed about new card offerings and compare what I hold in my wallet to other options. Some factors I keep in mind are relationship with the lender with other accounts, age of account, credit lines, interest rates, and rewards. I think carefully before I make changes to my cards; I don't just cancel an account or apply on a whim.

One thing I want to mention is something that I don't hear a lot about on this forum. Right now in my life, I don't carry debt and I always pay in full. But I've been around long enough to know that every smart consumer would be wise to have at least one credit card in their pocket at all times that offers a permanently low interest rate. (Not just a teaser introductory rate.) If you think you are guaranteed to find or be able to qualify at any time in the future for an attractive 0% intro financing offer, think again. Have an account to fall back on and keep it open.

Don't get me wrong. Rewards are great! A lot of people focus on rewards now to the exclusion of interest rates, but there may be times when you will appreciate knowing you can put a purchase on credit temporarily and know you will not get gouged on interest charges. And 0% balance transfer cards almost never offer the best long-term rates. The best low-rate cards aren't glamorous or offering any cash back if you want the lowest rates, but they are out there. You won't find lenders pushing them. You can find such cards right now that offer permanent 8-10% interest rates with excellent credit. Many of those cards are with Credit Unions or smaller banks. You will never find those rates with the big national banks. ALL rewards credit cards charge higher interest rates because that is how they make up the difference in what they are paying out! Consumers who forget to PIF or are not being smart are helping to pay the bank for your rewards program. The good thing is, you can always try to find a better rate with other lenders once you put it on that low-rate card, but at least you're in the best shape for the short term.

I culled my credit card list a few years ago and I got rid of my smaller store-branded credit cards. I got rid of cards which did not have a place using the above criteria. I tried to keep cards that offered me a relationship with a variety of different lenders. Banks change hands and even go out of business sometimes. Lately, however, I've been building a stronger credit relationship with Chase due to the strength of their Ultimate Rewards platform for travel. I converted one of my older Chase cards to a Freedom Unlimited and have acquired the Sapphire Reserve, and basic Freedom cards. By combining points on the Freedom and Unlimited, I don't just get 5% or 1.5% cash back; I get 7.5% or 2.25% cash back when I roll the UR points over to the CSR since they are worth 50% more there.

I currently have about a dozen cards but five of them are in the 10 to 25 year old category, so they are helping to keep my AAoA high.

When you choose cash-back cards, a lot of the decision about which cards you choose are based on your spending habits TODAY. Keep in mind that as you go through life, your spending habits and priorities and lifestyle not only MAY change; they WILL change. Don't close all your older cards just to keep the cash back cards that are working for you today.

All that being said, I am an advocate for simplicity and have no desire to collect cards just to save an extra nickle here or there. The cards that are right for one person today may not be the ones that are right for another.

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 19:50:11 GMT

@Aim_High wrote:
I've had a credit file for 35 years so I'm not your average member in that regard. A lot has changed in the credit card world in that time.

One thing I've seen and learned is that all in life, including credit cards, is not only subject to change; I can guarantee it WILL change and not only that, it will change substantially in ways you never imagined.

So the best cards of today are probably not the best cards of tomorrow. Lenders will come and they will go. I opened my Discover account in 1993 when it was the first and ONLY card which offered any kind of cash-back reward, and it wasn't even a true 1% at that time. It was heresy in the banking world! LOL The cash-back world has changed dramatically in 25 years.

While I agree with a lot of what you said, the cashback statement isn't true. I got my Amalgamated Bank MasterCard (Gold!!!) in 1990, and that gave a true 1% off on every purchase.

But I've been around long enough to know that every smart consumer would be wise to have at least one credit card in their pocket at all times that offers a permanently low interest rate

Right, but as you say, things always change, and a permanently low rate may not exist! But worth getting one with a track record....

Re: Questions for folks with few cards

wasCB14 — Sat, 11 May 2019 19:50:17 GMT

@Anonymous wrote:
Perhaps the major downside is missing SUBs, but that is not for everyone.

A more minor one is when a card is nerfed or your needs change, then you need to find a replacement. But this probably isn't a big deal if you have been indeed minimalist, you won't have many inqs or new accounts, removing some barriers to a successful app for the new card of your choice.

Also make sure you have some issuer diversity among your few cards: if they are all Bank X and Bank X suddenly decides they don't like you....

And there's plenty of room for "hybrid" strategies, at least with enough spend. I do some bonus chasing while also keeping a few "core" cards that turn over slowly.

I'm up to six issuers, but don't feel any need to diversify beyond about three. Six is more the result of:

- Keeping slightly older cards for their history

- Wanting bonuses

- Encountering "card family" bonus restrictions and internal maximums.

Re: Questions for folks with few cards

Anonymous — Sat, 11 May 2019 19:51:29 GMT

@Aim_High wrote:

One thing I want to mention is something that I don't hear a lot about on this forum. Right now in my life, I don't carry debt and I always pay in full. But I've been around long enough to know that every smart consumer would be wise to have at least one credit card in their pocket at all times that offers a permanently low interest rate. (Not just a teaser introductory rate.) If you think you are guaranteed to find or be able to qualify at any time in the future for an attractive 0% intro financing offer, think again. Have an account to fall back on and keep it open.

This is key information here.

PIF = never giving the banks more $

Permanent low APR is another useful tool to have and live by. You never know when you'll have a large unexpected expense to carry for a couple of months or longer. You can't predict the future and what offers you may have today for a low APR BT might not be there when that expense comes up. I hold 2 CU cards just for this reason with 1 at 6.9% and the other at 9.5%. They don't have huge limits but, they're both over 15K for that off chance there's not another viable option available at the time it's needed. Another nice thing about these 2 cards is they don't charge BT fees either.

Re: Questions for folks with few cards

calyx — Sat, 11 May 2019 20:33:34 GMT

While I am still building/rebuilding, my ultimate list is a max of 7 cards for my spend.
I have a budget I follow (and use my reports), so I know where I can benefit the most, and in theory would have two AFs.

Now, should any/some of those 7 cards change/get nerfed, I'd either shift (to a generic cashback) or get a card to fill that slot, but I don't think it's all that difficult to keep track of a few cards, and I don't really want 10-20-30 or however many. If I stop using a card, it'll get sock drawered and I'll let it die an inactive death.

And I know score was mentioned upthread. My partner has two open accounts - one revolver, and one installment (I think 1 closed installment as well) and he's got >800 scores, so I am not concerned about number of accounts for scoring, though I do always keep it in mind when strategizing what cards/accounts I want and in what order I'll go after them.

Re: Questions for folks with few cards

Aim_High — Sat, 11 May 2019 20:42:48 GMT

@longtimelurker

(I opened my Discover account in 1993 when it was the first and ONLY card which offered any kind of cash-back reward)

" ... While I agree with a lot of what you said, the cashback statement isn't true. I got my Amalgamated Bank MasterCard (Gold!!!) in 1990, and that gave a true 1% off on every purchase."

Touche' ... that Discover was the only cash-back card as of 1993. I don't think I was aware of that Amalgamated card or any others but suppose Discover already had competitors by 1993.

Regardless, 1993 is not when Discover started the cash-back program. (It was just when I applied for my card.) According to my online research, the Discover card and cash-back bonus were introduced at the 1986 Super Bowl and it was the very first card to ever give cash-back.

Those were my major points anyway.

(1) that Discover was the first cash back credit card,

(2) cash back has not really been around forever;

(3) that it used to pay a LOT less back than it does now; and

(4), that things have changed dramatically in the credit card world!

Just wondering ... do you still have that card and is it still a good card for you?