topic Re: What's the advantage of having many CC? in Credit Cards

What's the advantage of having many CC?

Anonymous — Thu, 11 Aug 2011 16:07:00 GMT

So I've been reading on here how people have 8, 10, 20 cards...what is the advantage of that?

I have 4 that I use:

PenFed - gas, personal use $9.5k CL

USAA MC - joint expenses, $24k CL

USAA Amex - bills, $14k CL

Victoria's Secret - their stuff, $650 CL

So why do people have so many more? Is it because the limits are much lower than mine? What is the advantage of having so many store cards? We shop at Express, Home Depot, Target, Walmart a lot - should I get their cards? Would they give me so much more in rewards or something? Should we get an AMEX card as everyone seems to love them (beyond the USAA one)?

Isn't it harder to keep track of all those cards? Do y'all spend a lot more than us? (We spend less than $1,500 a month, usually much less, on CC)

Just curious to hear from people why they want to app for so many and have so many cards... thanks!

Re: What's the advantage of having many CC?

MS00000000 — Thu, 11 Aug 2011 17:12:06 GMT

@Anonymous wrote:
So I've been reading on here how people have 8, 10, 20 cards...what is the advantage of that?

I have 4 that I use:
PenFed - gas, personal use $9.5k CL
USAA MC - joint expenses, $24k CL
USAA Amex - bills, $14k CL
Victoria's Secret - their stuff, $650 CL

So why do people have so many more? Is it because the limits are much lower than mine? What is the advantage of having so many store cards? We shop at Express, Home Depot, Target, Walmart a lot - should I get their cards? Would they give me so much more in rewards or something? Should we get an AMEX card as everyone seems to love them (beyond the USAA one)?

Isn't it harder to keep track of all those cards? Do y'all spend a lot more than us? (We spend less than $1,500 a month, usually much less, on CC)

Just curious to hear from people why they want to app for so many and have so many cards... thanks!

I personally have multiple cards for multiple reasons. I realized about a year ago when I had only one low limit card for emergencies and used my debit card for everything instead, that potential creditors saw that not as being financially responsible but as having a lack of experience managing credit. I had just purchased a home and had successfully paid off two auto loans in the past, and it seemed silly and a little insulting to me when I was denied by Citi, Discover and PenFed for lack of experience, but in order to improve my credit profile and benefit from it, I started applying for cards with rewards.

In addition to rewards, boosting my credit profile and having available credit for emergencies (big or small), it shows potential creditors that I can manage credit successfully and I have more options that will allow me to benefit from using credit, and not the other way around. Almost every card I have offers me reward benefits for my normal everyday purchases.

Another benefit of having multiple cards are special offers like no interest for x months on purchases at places like Home Depot, Best Buy, NewEgg, Macy's, etc. It's nice to be able to purchase a new dishwasher or sofa and pay it off over 6 or 12 months instead of paying cash upfront, and still not pay interest on the purchase. To me, that's the biggest reason for having a store card because the interest rates are normally incredibly high compared to bank credit cards.

However, and this is a big however, I think I've got a little too much overlap in rewards in some cases now and you're right, it can be difficult to manage a lot of cards. For example, I have two cards that have different reward benefits in different areas, but both give 3% cash back on gas, so I have to decide which to use when I get gas.

My advice is to only have what you need, and get the best cards for your situation. If you have 10 cards that all have different benefits that you will use and you can manage them all, great. If you can get what you need from 4 cards instead, even better. Every situation is different, so look at what you need in your life and go from there.

As for American Express, I happen to love them and the backdating on cards is great for your credit score. As you will see by looking at others' posts, not everyone loves AMEX

Re: What's the advantage of having many CC?

LTomBerry — Thu, 11 Aug 2011 17:19:54 GMT

I'm with you on that one. I have 2 cards - a USAA MC $14k CL and a Discover More $2.5k CL. I use the Discover for the 5% categories and online through ShopDiscover for the rewards. I run everything else through the Mastercard for cash back. I can't imagine trying to keep track of a dozen cards with different due dates. My long term plan is to pick up an AmEx Blue Cash for the awesome cashback rewards and use that as my primary. I'll probably get a BofA Visa at some point just to round out the collection with one of each network. And if I go somewhere only certain cards are accepted I'll be set.

I'm sure there are various reasons people have a ton of cards, some good reasons and some not so good - I'll throw out a few and maybe people will chime in:

Playing the balance transfer game shuffling between 0% offers
Had cards from when they were younger and saw no need to close them so they accumulate, building AAoA
Playing the rewards/benefits game. If I really wanted to max out rewards I could get a PenFed Visa for gas, a Citi Forward for dining, a Chase Freedom more more categories, etc. Maybe a CapOne for foreign travel. But that's too much work for me.
Having multiple tradelines to improve credit score
Pride. Having a lot of cards or prestigious cards make them feel important around other people. Also applies to spending beyond your means to impress people
Addiction. Applying for credit can become an addictive behavior. Getting approved gives you a self esteem boost and can make you want more
Ignorance - going around applying for every store card in existence to get a discount that day, not knowing the long term ramifications
Desparation - getting credit wherever they can just to stay afloat, even if the debt is unsustainable
???

Obviously not everyone fits into these categories and there are certainly other reasons. I'm interested to see what others say.

Re: What's the advantage of having many CC?

Anonymous — Thu, 11 Aug 2011 17:18:20 GMT

I have a pretty fair amount of credit cards. I have 2 VISA, 2 Mastercard, and 7 store cards. While I am certainly not a credit expert, I can tel you that my FICO scores have been going up like a rocket in the last 6 months since I started to rebuild and have these many cards. Since Im just starting out rebuilding it gives me alot of positive trendlines, and no ones going to give me a high credit limit so having these helps increase the amount of availible credit I have. Both my EQ and TU have gone up just over 100 points since Feb.

So I can see the advantages of having many credit cards when you are starting out or trying to rebuild, as long as you do not spend more than you would without them.

Re: What's the advantage of having many CC?

flyingmd — Thu, 11 Aug 2011 17:34:34 GMT

Personally, I think too many cards is an invitation to financial disaster. I had probably 20 cards at one time and it is ridiculous. I got rod of most and now have the following: AMEX platinum for personal expense (average 20-25K per mon), and AMEX platinum Corp for my primary business, and MC world elite CHARGE card (yes, BofA has a charge version) which I use for my secondary business (30-35K per month). I have a BOfA VISA with a 22000 limit, and a MERRIL Lynch visa credit card with a 250,000 limit hat I use for emergencies (both are PIF 10 out 12 mons of the year) and everying else I use a Merrill lynch signature visa deferred debit card . I got rid of the AMEX centurion personal and business, 6 MBNA MC, and a few misc store cards, all of which I closed.

Re: What's the advantage of having many CC?

visorboy1974 — Thu, 11 Aug 2011 17:40:52 GMT

@flyingmd wrote:
Personally, I think too many cards is an invitation to financial disaster.

I wouldn't say it's the number of cards as much as it is the amount of credit.

Re: What's the advantage of having many CC?

flyingmd — Thu, 11 Aug 2011 17:48:16 GMT

Here, here. Well said. Using what you have responsibly is they best way long term to to keep your credit and scores healthy.

Re: What's the advantage of having many CC?

tntexans72 — Thu, 11 Aug 2011 17:52:11 GMT

I had 8 but have slowly narrow it down to a total of 4 now.

1. Chase Freedom Visa

2. Chase Sapphire Preferred MC

3. Discover More

4. Amex SPG ------> currently PC to Blue Cash Everyday

Re: What's the advantage of having many CC?

MagicShot — Thu, 11 Aug 2011 18:10:45 GMT

@tntexans72 wrote:
I had 8 but have slowly narrow it down to a total of 4 now.

1. Chase Freedom Visa
2. Chase Sapphire Preferred MC
3. Discover More
4. Amex SPG ------> currently PC to Blue Cash Everyday

I have 35 but soon to have 33. BBRZMC & Orchard Cards are getting the boot!

Re: What's the advantage of having many CC?

Creditaddict — Thu, 11 Aug 2011 18:28:02 GMT

In the past I was a fan of having a 100 different credit cards but now I carry 1 Amex, 1 Visa!

However when it comes to Store cards you have to way out the benefits and how often you really shop at the store.

Home Depot - Offers 6-12 months interest free almost all the time, sometimes they offer you 10% off.

Target - I do my grocery shopping here and now with the 5% always and 10% on wine over 6 bottles... That all adds up VERY quickly!

Express - I get a coupon DAILY from them on my i-Phone, through e-mail, in store... seems a lot of times additional 15% with Express Card, they will allow you to break up your transaction into 20 if you wish to try to use a coupon for each transaction... Last time I spent just over $350, I saved over $250!!

Walmart - Allows you to get cash back at register and it won't cost you a cash advance, it goes in as your regular purchase just increasing your total... the biggest news lately is if you sign up for paperless statements they will give you your TU Fico monthly... otherwise I would say not as useful of a card as the others.

Re: What's the advantage of having many CC?

MagicShot — Thu, 11 Aug 2011 18:36:22 GMT

Not too bad. I wish they would be will to remove the AF or upgrade my BB Card because I got over 200 in BB Bucks this year, and also am a premier silver member. HSBC sucks and I know Cap one wont remove the AF, the only 2 cards I have with AF are with HSBC BBRZMC and Orchard Bank cards.

Re: What's the advantage of having many CC?

llecs — Thu, 11 Aug 2011 19:10:05 GMT

I have about 15 open CCs reporting. Why so many? In my case it was due to my early days in credit rebuilding in that I applied for anything and everything just to get my first CC to report. I did too much settling and instead of being more selective so as to be more effective, I received cards I immediately wanted to cancel due to AFs, and so on. Wish I proceeded more slowly. All but one is shelved (Amex) and looking to let a few die a natural death in the next few months due to non-use. In fact, I'm going through a financial challenge so I'm not using any CC at the moment; cash only for us. CCs are never an emergency fund.

Re: What's the advantage of having many CC?

Anonymous — Thu, 11 Aug 2011 22:45:34 GMT

Target gives 5% or more at register, IMO, that big enough reward to justify it.

AMEX ( not everyone loves it).

For me, about 10 to 15 is more than enough.

Re: What's the advantage of having many CC?

wmarat — Thu, 11 Aug 2011 22:57:44 GMT

@visorboy1974 wrote:
@flyingmd wrote:
Personally, I think too many cards is an invitation to financial disaster. WRONG
I wouldn't say it's the number of cards as much as it is the amount of credit. WRONG

Re: What's the advantage of having many CC?

haulingthescoreup — Thu, 11 Aug 2011 23:26:17 GMT

@wmarat wrote:
@visorboy1974 wrote:
@flyingmd wrote:
Personally, I think too many cards is an invitation to financial disaster. WRONG
I wouldn't say it's the number of cards as much as it is the amount of credit. WRONG

lol, don't hold back there.

If someone isn't financially disciplined, I agree that having lots of cards/ lots of available credit can be risky. It's like sending a dieter into a chocolate factory. And this is something that should be acknowledged frequently on this board, because we do see people who went overboard and are paying the price.

But if you're not tempted to buy things that you can't pay off right away, lots of cards/ lots of credit are just that, lots. To me it has become a bit of a PITA to keep track of my 8 or 10 or whatever it is, but I haven't come up with any particular reason to close them. I just use 3 or 4 at a time for most of my financial business and air the others out every now and again.

In terms of scoring, 3 cards seems to be the magic number, unless you have lots of open loans, in which case you might "need" more to avoid the "too many accounts with balances" ding.

In terms of real-life usage, 2 is an absolute minimum, and 3 or 4 is better, because you never know when the CCC will go nuts on you and reduce your CL or close you out, or a card processing network will go down, or there's a screw-up in your payment and you can't use your card until it's untangled or whatever. That's when you don't want to have only BofA, or only AmEx, or only VISA's, or whatever.

In terms of rewards, evaluate your use of money and see what cards can pay you back some of your hard-earned cash, and go with those. And realize that just about the time you have the perfect collection of rewards cards, they'll start changing the rewards.

Re: What's the advantage of having many CC?

Imhotrodcrazy — Thu, 11 Aug 2011 23:45:04 GMT

I only have two cc's, both from the same bank, with more than enough of a cl for me. I only use one cc, I like my life simple, and I am not a score junky, as you can see from my scores.

Re: What's the advantage of having many CC?

Booner72 — Fri, 12 Aug 2011 01:03:48 GMT

I really love this post. I'm DYING to get a credit card with some legitimacy. I can't wait for this house to close so I can move on and up. I'm very interested on which cards offer the best "rewards." I'm definitely not going to collect cards though because I'm too lazy to take care of it all.

Re: What's the advantage of having many CC?

Anonymous — Fri, 12 Aug 2011 15:46:16 GMT

so would it be advantagous to have say - a MC, AMEX, Visa, Discover group all from different banks so that if one bank got upset, you could depend on the others? Or do y'all have multiple MC, Visa ,etc rather than a spread of different types?

How many cards actually get carried around every day? Or do you take the one with the reward you want (ie, getting gas? get the gas CC)

Re: What's the advantage of having many CC?

JonStur — Fri, 12 Aug 2011 17:08:26 GMT

I don't think having to many cards is a problem if you're not using them to supplement your income..if you spend more than you can afford, you can get into trouble with one or two cards. I personally have two HSBC cards ( Gold Mastcd. Plat Visa ) and two first Premier ( also Gold & Platinum Visa ), along with Credit one Plat. from my rebuilding stage. These cards see minimal activity but their my oldest TLs and have some decent balances. My goto cards are my Cap 1 Rewards, my Costco Amex, and my Walmart Discover...I can easily obtain more TLs but I'm kinda happy with what I have..

Re: What's the advantage of having many CC?

Cloudlb — Fri, 12 Aug 2011 20:07:47 GMT

I am rebuilding, and I have two credit cards now, a $500 mastercard from my CU and a Discover cash back one with 4,000 cl. That's a victory for me. I pay in full every month, although I'm planning to use my Discover for a big-ish purchase (for which I will pay off during the interest-free period).

Does having a 3d one really matter that much? I wouldn't mind having a VISA for diversification . . .