topic Setting your 2021 Card Strategy in Credit Cards

Setting your 2021 Card Strategy

Aim_High — Fri, 01 Jan 2021 21:46:43 GMT

Many of us complain about lender guidelines such as Chase's 5/24 limit on new accounts. Bank of America (3/12 for non-account holders) and US Bank (1/12) have other rules that are well-known. Most of these rules were set up to limit SUB-chasing or to identify what a bank would consider 'excessive credit-seeking behavior' which could be a sign of financial distress. From our perspective, it can be annoying to have those limits placed on us.

On the other hand, we often remind each other that "Credit is a marathon, not a Sprint," to try to pace ourselves, and to realize that we need to keep some self-discipline in the process. Periodically, we may look on with horror (or envy) as someone tries to get away with a monster App Spree. We know that's not really the way to build good credit. Overly-seeking credit can be addictive and counterproductive to our finances. As a general guideline, I usually suggest to newer members that slow and steady wins the race, and that planning to add about one new account every six months is a good long-term pacing that will usually keep you within the various lender limitations, especially for those with low-to-medium scores, thinner files or derogatories. The more you go over that, the more likely you'll start getting denials eventually, and that's regardless of the strength of your profile.

In another thread today, one of our Moderators suggested that we reframe the way we look at those lender guidelines since they help to force our focus on what is most important to building our profile. I thought that was a good point, since there are so many credit card options out there, having a limiting framework can actually be helpful in setting priorities. Having a good strategy requires taking inventory of our existing cards, an honest evaluation of our financial picture and needs, and a careful consideration of which credit cards would be most beneficial. Sometimes, chasing after the FOTM card (Flavor of the Month) or the latest, greatest SUB isn't the card we most need. And over-app'ing can be a disruption to improving our finances with the best card for us.

At times, I've been guilty of the impulsive apps so I'm not pointing fingers. But I've also planned for new cards and I'm doing so right now. I keep some MS Word documents on my computer where I track new accounts dates in the previous 6-12-24 months, CLI dates, Inquiry dates by bureau, and also lists of cards that I think would be beneficial. Having lists and dates helps me to come up with a plan for the next six months, one year, or two years. And not impulsively diving into cards can help me make sure I'm making good choices and optimizing my chances of success. If it wasn't for limits on how many cards I could add, I might find myself going in five different directions all-at-once with nothing to show for it.

For the community, how do you set limits for yourself on new cards or inquiries and do you have a process before applying for new credit? How long do you plan or do you impulsively app? Is impulsive or excessive app'ing a problem or a concern? We're in the last three weeks of 2020. As it draws to a close, what are your credit goals for 2021?

..... Kudos to @Remedios for the topic.

Re: Setting your 2021 Card Strategy

TheFIGuy — Thu, 10 Dec 2020 23:36:56 GMT

I'm in a holding pattern for 2021+, either (a) AMEX would have to re-organize and end the partnership with Charles Schwab, or (b) a really good business 2%+ Cashback card would have to be announced for me to leave the current holding pattern.

If (a) happened I would be reaching out to you @Aim_High for Chase trifecta help so let's hope (a) isn't in the 2021+ future.

My current setup:

Daily Drivers

AMEX CS Platinum
AMEX Gold
AMEX BBP
USB Altitude GO

Re: Setting your 2021 Card Strategy

CA4Closure — Thu, 10 Dec 2020 23:49:31 GMT

In 2020 my goal was to get rid of credit cards that had no rewards, annual fee(s) and no/low CLI. Capital One was the card that got the axe from me. It was my longest tenure card at 20 years. I am still considering closing my Chase Freedom Unlimited card due to their high APR% and low credit line that has not changed in the 3 years I have had it.

I applied for Barclay's Hawaiian Airlines Mastercard Elite because I fly to Hawaii at least 8 times a year and at $99 annual fee, it made sense for me to have this credit card. When I was approved for this card, they had a 60,000 point reward for new applicants. I have gotten those rewards within 2 months of getting that card. They also gave me a nice CL of $35,000 so it was a no brainer to close my Capital One Platinum MC.

I am not going after a lot of credit cards. I am content with the 14 I have now. I am using my Navy Federal Credit Union cards a lot right now along with Discover. Discover just gave me an 18 month 0% APR on purchases. I have already spent a nice chunk of money on my Discover card. But Navy and Discover will get my major spend in 2021 because of their excellent APR% and CL's they have given me.

Re: Setting your 2021 Card Strategy

Aim_High — Thu, 10 Dec 2020 23:52:00 GMT

@TheFIGuy wrote:
I'm in a holding pattern for 2021+, either (a) AMEX would have to re-organize and end the partnership with Charles Schwab, or (b) a really good business 2%+ Cashback card would have to be announced for me to leave the current holding pattern.

If (a) happened I would be reaching out to you @Aim_High for Chase trifecta help so let's hope (a) isn't in the 2021+ future.

My current setup:
Daily Drivers
AMEX CS Platinum
AMEX Gold
AMEX BBP
USB Altitude GO

Thanks @TheFIGuy. And what's really good about your example is that it's okay to be in a 'holding pattern' sometimes and just be content with what we've built! That reminds me of a couple of forum postings where our members felt lost because they exhausted the obvious possibilities. Anyone can get there, but it's a sign that maybe some time on the sidelines is in order. Congrats on building a lineup that is working well for you!

Re: Setting your 2021 Card Strategy

Remedios — Fri, 11 Dec 2020 00:08:22 GMT

I don't have a business, so outside of property taxes and tution, my spending curve is relatively stable.

In that respect, applying for 500 cards won't do me any good since I am dealing with finite amount of money.

Being in self imposed garden isn't the worst result of applying for a lot of cards. It's growing debt that some people experience when they are trying to *take advantage* of 0% promos on 10 cards, totally overextending themselves. I am sure they live under impression that everything is under control, but it isn't.

It spirals out of control rather quickly.

There is also "because of five duds in my SD, I cannot get the one I need"

Ive gone through two periods of "I can't sleep, but I sure can fill out apps"

While the SUBs were nice, most of those cards are useless. Then, because I got useless cards, I kicked myself out of running for useful ones.

While my SLs were okay to great, APRs on those cards are payday loan like. It's a nice message about how risky my behavior appears to the other side.

Too much of everything, way too fast.

Now that I'm done proselytizing, goals..

I already have everything i need. Goal is to sit still unless something really good (read: SUB) comes along, in addition to vanilla goal *Apply for credit when you need credit*

I've trashed many agining metrics, I'm simply not in a position to continue with Stupid Deluxe Signed Edition.

None of this means I won't apply for cards, but it does mean being quite a bit more selective, delineating better between *want, need, and bored*.

Re: Setting your 2021 Card Strategy

AndySoCal — Thu, 10 Dec 2020 23:57:55 GMT

Right now I am planning not to apply for any new credit cards. I am also not planning to apply for any credit Limit increases either.

My own rule for a credit limit increase is redit utilization on the card greater than 10% of credit limit month over month. With my spend and my credit limits none my cards qualify for a credit limit increase consideration.

Re: Setting your 2021 Card Strategy

TheFIGuy — Thu, 10 Dec 2020 23:58:46 GMT

But Navy and Discover will get my major spend in 2021 because of their excellent APR% and CL's they have given me.

@CA4Closure If NFCU would implement/allow autopayments from external financial institutions, I would immediately change some spending around. I personally like all my credit cards to be set up with autopayments three (3) business days before the due date. The last time I spoke with NFCU 11/2020, this feature was "being discussed within management, but no actual timeline has been discussed."

But I digress, I like your setup!

Re: Setting your 2021 Card Strategy

simplynoir — Fri, 11 Dec 2020 00:13:46 GMT

My yolo lifestyle of going to one card after another was back in 2017 when I first started coming to the forums. It was like the wild west out there where any card that gave me attention I gave it right back. My credit reports went from 820s to 780-790s during that time. Then towards the end of 2019 I was finally ready to settle down and only go after cards I see myself keeping long term or have a signup bonus big enough to ignore first rule 😂 Now with inquiries aging or beginning to fall off to go with aging accounts crossing thresholds I'm back to the 840s on EQ and TU, EX is a mess because everyone likes ganging up on EX so it's the runt sticking around 820s. This is all dependent on how much DW and I spend since I've stopped practicing AZEO awhile ago. DW is same with wanting keepers for her card lineup

Our 2021 strategy is different from others in that we're preparing to enter the housing market next year. So by necessity we're purposely limiting any apps next year after January when I plan to hit Socks Bank with the Connect app. After than any other cards that we have kept our eye on whether for keeper or churning purposes (Delta cards, Hyatt, maybe Hilton?) takes a back seat til we have a house with keys in hand

Our current personal and business cards fit our rewards strategy that we had to change this year due to coronavirus. Once travel is a more realistic possibility then we'll tweak our setup again to reflect that. With our toes in many rewards programs (AMEX, Chase, Bofa, Socks, Delta) if any changes take place that would affect our strategy such as Socks implementing negative changes to the Altitude Reserve then we have fallback options while re-assessing

tl;dr I went through my crazy years early so now I don't have many "goal" cards left to strategize for house hunting aside

Re: Setting your 2021 Card Strategy

Anonymous — Fri, 11 Dec 2020 00:18:33 GMT

@AndySoCal wrote:
Right now I am planning not to apply for any new credit cards. I am also not planning to apply for any credit Limit increases either.

Same here, I have the cards that I need.

With the caveat: if some of the key cards got nerfed, I might want to apply for an alternative. This is particularly true of USAlliance and USB AR.

And if my friend's cousin's landlord's friend is right about the 8% cashback card that's coming really soon, well, might go for that.

Re: Setting your 2021 Card Strategy

Kforce — Fri, 11 Dec 2020 00:19:05 GMT

@Aim_High wrote:
For the community, how do you set limits for yourself on new cards or inquiries and do you have a process before applying for new credit? How long do you plan or do you impulsively app? Is impulsive or excessive app'ing a problem or a concern? We're in the last three weeks of 2020. As it draws to a close, what are your credit goals for 2021?

..... Kudos to @Remedios for the topic.

I have never been impulsive with credit cards.

I don't have a need for travel - hotel rewards, which leaves cashback.

I don't get cards just for "Sub", or "Bank Transfers".

When I first went for reward cards, I found a couple that gave me the highest rewards on my real everyday spend by analyzing 6 months history. Have only went for new cards when a card was "Nerfed" (SalieMae) .or. passed my "New Card Rule" .

(New Card Rule } // New card only if reward value > $10 a month over current card set.

I don't believe in getting a new card for just a few dollars a month extra, splitting of rewards and managing them is not my thing.

I like a simple, small card count. If I knew that some of my current cards would not be nerfed I could just have three cards. I keep a few others just because I have seen some good cards leave and need a backup set.

This means some times years go by with no new card, and once in a while a new card makes the cut

I think it was 4 or 5 years with no new cards and then the USAlliance 3% showed up in 2020.

We will see what 2021 brings.

Re: Setting your 2021 Card Strategy

simplynoir — Fri, 11 Dec 2020 00:36:21 GMT

@AndySoCal wrote:
Right now I am planning not to apply for any new credit cards. I am also not planning to apply for any credit Limit increases either.
My own rule for a credit limit increase is redit utilization on the card greater than 10% of credit limit month over month. With my spend and my credit limits none my cards qualify for a credit limit increase consideration.

Just so I'm sure I understand this correctly since it sounds like a good rule to have for yourself. This applies only to the spend for that card's purposes and not overall spend, correct? An example is if you have $3k total spend per month and $1k goes to your Citi DC card the rule barely qualifies since it keeps under the 10% utilization threshold you've set for yourself

Re: Setting your 2021 Card Strategy

Andypanda — Fri, 11 Dec 2020 00:55:21 GMT

I often impulse app for cc. As long as inkepp my scores above 740 I'm happy. My house is paid off, and my card is new enough, that unless something major happens, i do not plan on getting a new car any time soon ( and i am in tge situation i cam always pay cash.) unless a new unicorn card comes out, or a great sub, i do not plan on apping for anything soon, since inhave all the cards i wantvfor the moments. Chase cards don't have much intrest for me, but i might get the chase flex when i get below 5/24 (currently at 11/24).

Re: Setting your 2021 Card Strategy

wasCB14 — Fri, 11 Dec 2020 01:05:45 GMT

@Kforce wrote:
When I first went for reward cards, I found a couple that gave me the highest rewards on my real everyday spend by analyzing 6 months history. Have only went for new cards when a card was "Nerfed" (SalieMae) .or. passed my "New Card Rule" .

(New Card Rule } // New card only if reward value > $10 a month over current card set.

I'd take a $500 SUB now over the hope that a card won't be nerfed for 50 months.

No big changes here...MRs, a little cash back, and maybe another SUB or two.

Re: Setting your 2021 Card Strategy

TheFIGuy — Fri, 11 Dec 2020 01:06:59 GMT

@wasCB14 MR squad!

Re: Setting your 2021 Card Strategy

TSlop — Fri, 11 Dec 2020 01:09:23 GMT

Hmmm, for 2021, I plan on opening at least one card: the Freedom Flex. I do not have a MasterCard, and I would like to snag another 20k URs and get some phone insurance. After that, I'm debating opening up a second hotel card. I would like to have one that offers a free night every year, which the Hilton doesn't (unless you spend $15k on it per year). As the year goes by I'll also be watching out for Amex to give me an upgrade offer to the Surpass. I'd love another 100k points without a new account.

Beyond that, I'll probably try and stay in the garden for a while. I don't really "need" any other cards, so anything that gets opened would most likely be solely for a SUB. I want to always stay under 5/24, so I'll only open a maximum of 2 cards per year.

Re: Setting your 2021 Card Strategy

CreditCuriosity — Fri, 11 Dec 2020 01:47:31 GMT

I will opt of of this topic and no strategy other than if a lender I don't have then game on. I really didnt get alot of cards this year compared to others although still a decent amount, but cv-19 put lenders alot more conservative. Now that a vaccine is on the horizon, be interesting to see how lenders react next years as people start to live a normal life again.

Re: Setting your 2021 Card Strategy

newmomnewme — Fri, 11 Dec 2020 01:26:57 GMT

Great topic @Aim_High I was ignoring my credit 2016-19 (carrying high balances, ignoring interest, and missing a few payments) I wasn't applying for anything because my scores were scrapped!

Fast Forward to March 2020 - COVID and historically low mortgage rates, I wandered back to the forums to see what it would take to purchase a home this year (silly me) I pulled my 3B and 🤮🤯🤮🤯! I got pre-approved and thankfully I couldn't find a home I wanted to purchase....if I had, I'd be setting myself up for failure.

I came up with a pay down plan and paid down 75% of my revolving debt and got back in with Navy! I should have stopped there but NOOO. Instead of applying for 1 card every 6 months, I added 6 new accounts in one month!!!!! Honestly, I didn't even stop until AFTER the 3rd denial (courtesy of WF, Chase, PNC).

So, here I am 9 days from my 3rd full statement with Navy planning to hold off on the 2nd card and go for the SP CLI for now.

2021 Plan -

1. Let these INQ (EQ-4, TU-2, EX-6) and new accounts age; they will be 12 months old October 2021.
2. Pay off my BT deals (0% and 2.9%)

3. Continue banking promos (ease the app itch and possibly start relationship with good mortage lender)

4. Apply for mortgage loans after MMS hits 740

5. Continue monthly, quarterly, SP CLI requests on current cards

6. Apply for 2nd Navy Card AFTER my house keys are in hand.

Whew! I got work to do...But I'm about 10% there, been in the garden for 2+ months hanging with my better angels. If I could just stay away from the approvals board 🤫.

Re: Setting your 2021 Card Strategy

Kforce — Fri, 11 Dec 2020 01:43:21 GMT

@wasCB14 wrote:
@Kforce wrote:
When I first went for reward cards, I found a couple that gave me the highest rewards on my real everyday spend by analyzing 6 months history. Have only went for new cards when a card was "Nerfed" (SalieMae) .or. passed my "New Card Rule" .
(New Card Rule } // New card only if reward value > $10 a month over current card set.
I'd take a $500 SUB now over the hope that a card won't be nerfed for 50 months.

For us cashback folks, $500 subs are non existent.

Show me a non travel $500 "Sub", and I will go for it.

Re: Setting your 2021 Card Strategy

Anonymous — Fri, 11 Dec 2020 01:54:34 GMT

@newmomnewme we had a pretty similar 2016-2019 xD

But yeah, when COVID hit, questions of maintaining a steady income (whether by choice or not... continuing to work in pandemic conditions has amplified some of the usual job-related stressors, to say the least) started looming in my mind. So the past few months I took some drastic measures to get my finances back in line and get my credit healthy again.

Now, I will admit, having a clean report does have me eyeing a couple cards... haven't applied for a credit card in 3 years, and there are some shiny ones that currently have my attention

But, uhh, whether or not those come through for me (hopefully will find out here in the next couple weeks!! Just need ONE MORE paid down balance to report before I pull the trigger!) my main focus is to rebuild some good financial habits. The cards I want have some nice cash back bonuses, but I've still got an okay set up in the event things don't go as well as I'd like.

Mainly want get back into the habit of paying in full again, maxing out my Roth IRA, and enjoying not having a monthly car payment for the first time in 5 years! Oh, and if a nice SUB pops up and the timing's right, it might be time to get a new mattress

Re: Setting your 2021 Card Strategy

kdm31091 — Fri, 11 Dec 2020 02:02:40 GMT

I think for the most part we've reached the peak of what issuers can/will do in terms of rewards and we will probably see more partnerships/merchant specific credits, for AF cards, that tend to cause forced spend and result in less overall value for the customers. No AF / cash back cards are only going to go so high with rewards, and I agree with not spreading too thin.

So, no real apps planned unless something that proves me wrong comes along.