topic Re: Should I.... in Credit Cards

UPDATE: Should I....

shorrttyycm1 — Fri, 05 Apr 2013 13:05:57 GMT

So, ik this probably sounds stupid but i recently applied and was approved for the SallieMae Master card. Now I'm second guessing the move because i dnt know what effect the new account is going to have on my scores. Should've thought about it instead of applying but didn't. I want to apply for a mortgage in next 4 mnths or so and the fico simulator says a new account would drop me like 12 pts. Should I just say no thanks and not activate the card. If i don't activate it would it still show up on my reports? Wow, i really shoulda slept on the decision to app in the first place but i think i goofed.

UPDATE: DAMN IT!!

The new account and inquires finally fit...

-14 TU

-12 EQ

=EXP Fako

I knew I would take a hit but it still kills me to see it. How long do you think before I get my points back?

Re: Should I....

SnackTrader — Wed, 03 Apr 2013 14:36:37 GMT

The account will likely show up no matter what you do at this point. Activating the card has no bearing on the account.

I say make the best of it and ride it out. The new account ding will go away after a few months, and in the meantime you can earn some good rewards. Breathe easy, and remember that getting this card now will add another positive tradeline for you to grow over your lifetime.

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 14:41:02 GMT

Thnx for thr response! I have ocd about these things. I can remember a time when it wouldn't have mattered to me and i cared less about the details...would have just been happy approved & would have maxed it asap. Then again that kinda thinking got me in serious trouble in the past :-(.

Re: Should I....

SnackTrader — Wed, 03 Apr 2013 15:12:54 GMT

Well don't max it out!!!

But keep it, use it as needed, and pay it in full every month. Everything will be fine.

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 15:21:16 GMT

I said "would have" now i can't even convince myself to charge anything EVER. When i do i try to pif while the transactions are still pending LOL!

Thnx for advice. I guess i gotta live with it. Really didn't want 5 cards..way too many.

Re: Should I....

TNTransplant — Wed, 03 Apr 2013 15:41:34 GMT

@shorrttyycm1 wrote:
I said "would have" now i can't even convince myself to charge anything EVER. When i do i try to pif while the transactions are still pending LOL!

Thnx for advice. I guess i gotta live with it. Really didn't want 5 cards..way too many.

Actually, 5 cards is a good overall number to have from most viewpoints. And think positively - this will give you one more positve tradeline and will help minimize the impact to AAoA in the future. It's all good.

Re: Should I....

Anonymous — Wed, 03 Apr 2013 15:48:36 GMT

@shorrttyycm1 wrote:
I said "would have" now i can't even convince myself to charge anything EVER. When i do i try to pif while the transactions are still pending LOL!

Thnx for advice. I guess i gotta live with it. Really didn't want 5 cards..way too many.

What are the cards? While 5 may be more than you feel comfortable with, it can be managed!

Often you find that one card has no advantage of another one (e.g. in my case, the Barclays Reward card gives 2% on gas, groceries and utilities, but Fidelity Amex gives 2% back on everything) and that card can be removed from use (some here suggest spending a little on it every few months to make sure it stays open, you may or may not care).

And then cards like Sallie Mae have some very specific uses. It you are buying groceries, gas, or books, this is the first choice of card (unless you have spent over $250 on the first two this month). If the other cards don't do better than 1% on somethings, this could be the only card you need to use.

So the basic approach is just to know the "best" card(s) for each type of spending to maximize rewards, or if that is too much work, just use the one that is best somewhere and good everywhere else.

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 15:52:13 GMT

Thnx for response.

5 just seems like a lot. i really only wanted three tops. My goal was to replace both my crap cards...Orchard and Merrick with SallieMae, leaving me just three. But then luckily i got some good advice here and decided that closing them, as they are both my oldest accounts, would hurt too much,score wise. Had i asked first i wouldn't have applied to SallieMae. O well...it is a good card with rewards and no af. Darn ob and Merrick together cost me like $118 a year and neither have rewards.

Re: Should I....

TNTransplant — Wed, 03 Apr 2013 15:55:45 GMT

@shorrttyycm1 wrote:
Thnx for response.

5 just seems like a lot. i really only wanted three tops. My goal was to replace both my crap cards...Orchard and Merrick with SallieMae, leaving me just three. But then luckily i got some good advice here and decided that closing them, as they are both my oldest accounts, would hurt too much,score wise. Had i asked first i wouldn't have applied to SallieMae. O well...it is a good card with rewards and no af. Darn ob and Merrick together cost me like $118 a year and neither have rewards.

Why can't you close Orchard and Merrick? This would leave you with the 3 card max that you desire, and it won't hurt anything (other than possibly your utilization) by closing them. They'll both still report as a positive tradeline on your credit reports for the next 10 years, and by the time they drop off these other cards will be 10+ years old. If you don't need them for utilization issues right now, then close them.

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 15:57:32 GMT

Sorry, my cards are:
NFCU $14,000 no rewards
CapOne $5,000 cash back rewards 1 or 2% it
SallieMae $2500 5% gas grocery & amazon
OB $520 no rewrds +$59 annual fee
Merrick $300 no rewrds + $59 annual fee

Re: Should I....

Anonymous — Wed, 03 Apr 2013 15:58:49 GMT

@shorrttyycm1 wrote:
Thnx for response.

5 just seems like a lot. i really only wanted three tops. My goal was to replace both my crap cards...Orchard and Merrick with SallieMae, leaving me just three. But then luckily i got some good advice here and decided that closing them, as they are both my oldest accounts, would hurt too much,score wise. Had i asked first i wouldn't have applied to SallieMae. O well...it is a good card with rewards and no af. Darn ob and Merrick together cost me like $118 a year and neither have rewards.

Closing accounts only has a near-term impact on the score if you have outstanding balances. Age of the account doesn't matter at all, closed accounts will continue to report for up to 10 years. So it is only a problem if you have balances on some cards and the credit limit on the cards being closed are a significant part of your total credit limit.

It's just if you are close to applying for a mortgage you might not want too many changes, but $118 in fees is a lot.

Edit: I see TNTransplant beat me!

Re: Should I....

Gunnar419 — Wed, 03 Apr 2013 15:58:15 GMT

@shorrttyycm1 wrote:
So, ik this probably sounds stupid but i recently applied and was approved for the SallieMae Master card. Now I'm second guessing the move because i dnt know what effect the new account is going to have on my scores. Should've thought about it instead of applying but didn't. I want to apply for a mortgage in next 4 mnths or so and the fico simulator says a new account would drop me like 12 pts. Should I just say no thanks and not activate the card. If i don't activate it would it still show up on my reports? Wow, i really shoulda slept on the decision to app in the first place but i think i goofed.

I know the feeling! But don't worry. The Sallie Mae MC is a great little card for everyday spending and it has a nifty online interface. You'll like it.

As others have said, any damage has already been done. You might even be surprised to find that it helps, rather than hurts, your score. Never trust simulators. I've had my score go up with new accounts several times. It can happen.

If your mortgage banker asks about it, you can just say the SM card saves money on everyday purchases you would have made anyhow, which is the truth.

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 15:58:35 GMT

O...and $12,000 NFCU NavChek

Re: Should I....

Anonymous — Wed, 03 Apr 2013 16:02:17 GMT

@shorrttyycm1 wrote:
Sorry, my cards are:
NFCU $14,000 no rewards
CapOne $5,000 cash back rewards 1 or 2% it
SallieMae $2500 5% gas grocery & amazon
OB $520 no rewrds +$59 annual fee
Merrick $300 no rewrds + $59 annual fee

OK, then CLOSE the last two now! No impact to utilization since they are a tiny fraction of your CL.

Then use SallieMae on gas/grocery/amazon, (at least until the monthly cap, then CapOne) and CapOne everywhere else. And maybe small purchases every few months on NFCU if they are sensitive to non-use.

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 16:02:09 GMT

Thnx everyone!
I don't want to make too many changes. I have 0 balances across the board so utilization is a non-issue.
Gunnar i hope you are right and it helps instead of hurts. Losing 12-13 pnts is gnna sting :-)

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 16:06:04 GMT

@Bs6054,

But my orchard and merrick are my oldest accounts. My current AAoA is around 3...like 2.6 or something. My other cards are youngsters. Mortgage says need 3 trade lines of atleast 2 yrs right? If so and i close the two that only leaves 1 or 2 at 2 yrs i think.

Re: Should I....

TNTransplant — Wed, 03 Apr 2013 16:07:01 GMT

@shorrttyycm1 wrote:
Thnx everyone!
I don't want to make too many changes. I have 0 balances across the board so utilization is a non-issue.
Gunnar i hope you are right and it helps instead of hurts. Losing 12-13 pnts is gnna sting :-)

You'll be fine. Close the two bottom-feeder cards now that you have no use for them, and enjoy the feeling of getting rid of them.

Also, the score impact of opening a new account is temporary - over the next few months it will get back to where it was and even higher. You have to look at credit as a long-term process rather than an immediate one.

Re: Should I....

Anonymous — Wed, 03 Apr 2013 16:08:24 GMT

Sorry, was thinking about Fico score rather than mortgage requirements. If they need open tradelines of that age, then yes, you don't have a choice.

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 16:11:29 GMT

@TNTransplant,
I would love to! Thr feeling of pride during that convo...i can only imagine. Not that I'm ragging on them they both gave me a chance when no one else would but now its time to go.;-)

I'm a product of my generation, i want instant gratification LOL! No patience at all!!!

Re: Should I....

shorrttyycm1 — Wed, 03 Apr 2013 16:14:09 GMT

@Bs6054,

Noooo! I was hoping i was wrong and closing them would be fine. O well :-(