topic Re: A question for those with multiple credit cards. in Credit Cards

A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 12:38:29 GMT

Why? I am trying to understand but what is the reasoning of having so many cards 5+? I do not want to sound rude, but i just do not understand. Is it a secret to have a bunch or is it really just to maximize the return?

Re: A question for those with multiple credit cards.

Kenny — Thu, 27 Feb 2014 12:52:00 GMT

There is no secret.

Some people like to have each card to maximize the best of each reward category. Some folks like to pad their available credit, so if they have a month that they have to float a purchase, their scores don't take a nose-dive. Some have so many so that their file is considered "thicker". Some people like the vanity of it. Some folks have it for necessity. Some folks have an addiction to seeing congratulations! lol

I just view credit as, if you're going to spend the same amount of cash, you might as well spend it on a tool that will give you cash back for utilizing it -- thereby giving you a discount on your daily expenses.

Everyone will have their own reasons. Some people don't believe in having more than 5.. and I can understand that logic, as well.

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 12:58:54 GMT

Thanks, very helpful answer and I think it should be stated somewhere.

Especially when new people come aboard..........the board and see these. It seems intimidating or almost the norm. I understand about getting as much back as possible. I am going through that phase now after learning so much about credit and such with the past years. Being relatively young (28) am I have learned a lot recently. My wife and I just got our first cards 9 months ago. An AMEX BCP and a Capital One (Now Quicksilver), and yesterday just signed up for a Chase Marriott (my son is now a bit older where we can travel better and what better way lol)

I also am changing checking accounts to a Kasasa with 2.5APY. I figure, why not get free money where I can.

Thanks again!

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 13:06:39 GMT

@Anonymous wrote:
Why? I am trying to understand but what is the reasoning of having so many cards 5+? I do not want to sound rude, but i just do not understand. Is it a secret to have a bunch or is it really just to maximize the return?

I believe at least 2-3 cards is considered optimal for FICO scoring purposes.

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 13:52:36 GMT

My reasons are simple... I was trying to establish a nice rebuild profile.

My CU (BECU) told me the week I got my discharge that all they would offer me was a secured VISA. They said to go open an account with Cap One and then come back in 6 months. The accounts in my sig are listed in the order I opened them. I started with a car loan.. got some Cap One and other major CC's... then gas cards and a WM... then in December I went back to BECU and they followed through on their promise and gave me a $7k card.

NOW my profile is complete. I have a mix of revolving and installment accounts (also have a small balance of student loans in addition to my car) and of my revolving accounts one of them is a large limit of over $5k.

Don't need anything else... I garden for 2 years and when all these inquiries and my 13 drop off my reports in early 2016 I'll be golden. For me it wasn't about I needed X number of cards... it was about getting the mix I wanted for a nice rebuild.

Re: A question for those with multiple credit cards.

takeshi74 — Thu, 27 Feb 2014 15:21:54 GMT

Whiel I don't know of a sticky off the top of my head this is a very common topic so there are also former discussions that you can reference.

Each card serves a different purpose for me. Two of them are just SD cards that I keep for AAoA and low APR's (as a contingency measure as I PIF). Most of of my cards are for rewards as no one card offers the hiighest rewards for every possible spend category out there. I have one card that is mainly just for the assocaited flight benefits on United.

Don't fixate solely on number of cards. The number itself doesn't mean much. Some are just fine with a few cards. Some need/want more. Utlimately you need to determine what works specifically for you and what you can reasonably manage.

@Anonymous wrote:

Especially when new people come aboard..........the board and see these. It seems intimidating or almost the norm.

As with just about any topic out there the "norm" doesn't matter. What specifically works for the individual is what matters. Don't just do things to keep up with the Joneses whether it's credit or anything else in life.

Re: A question for those with multiple credit cards.

Themanwhocan — Thu, 27 Feb 2014 15:10:03 GMT

@KennyS2006 wrote:
There is no secret.

Some people like to have each card to maximize the best of each reward category. Some folks like to pad their available credit, so if they have a month that they have to float a purchase, their scores don't take a nose-dive. Some have so many so that their file is considered "thicker". Some people like the vanity of it. Some folks have it for necessity. Some folks have an addiction to seeing congratulations! lol

I just view credit as, if you're going to spend the same amount of cash, you might as well spend it on a tool that will give you cash back for utilizing it -- thereby giving you a discount on your daily expenses.

Everyone will have their own reasons. Some people don't believe in having more than 5.. and I can understand that logic, as well.

Well, you mentioned two reasons that apply to me. There is also obtaining signup bonuses. And diversifying a credit card portfolio across multiple banks.

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 15:17:27 GMT

What does having a "thicker" file accomplish?

What does diversifying a credit card portfolio do for you?

Serious questions.

Re: A question for those with multiple credit cards.

takeshi74 — Thu, 27 Feb 2014 15:24:02 GMT

A thicker file is more likely to get approvals and can hold up better against the impact of applying for and opening new accounts.

Diversifying helps with one's credit scoring and also acts as a safety measure (i.e. don't put all your eggs in one basket).

If you haven't read up credit scoring you might want to start there. There's a subforum on the topic as well as this page (among many other resources):

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 15:23:33 GMT

Wouldn't that be true just about good credit as well?

Re: A question for those with multiple credit cards.

takeshi74 — Thu, 27 Feb 2014 15:36:42 GMT

You're assuming that they're mutually exclusive and they're not. Good credit typically entails a thicker file. If one has a thin file then one will need to build it to get better credit. A thicker file will generally have a larger number accounts, a greater diversity of types of credit and longer AAoA. All those impact credit scoring (along with the other factors mentioned in the link I posted earlier in this thread).

That said, one doesn't need a large number of cards for scoring purposes. IIRC at least 2-3 revolving lines are the general recommendation for FICO scoring purposes.

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 15:39:58 GMT

Well, i have a 748 transunion, but it just dropped 2 points because of the Chase Marriott i just signed up for. I just got my First CC's 9 months ago, but i had high CS then as well.

Re: A question for those with multiple credit cards.

mrgoattoo — Thu, 27 Feb 2014 16:59:37 GMT

@Anonymous wrote:
Why? I am trying to understand but what is the reasoning of having so many cards 5+? I do not want to sound rude, but i just do not understand. Is it a secret to have a bunch or is it really just to maximize the return?

I have nine after closing half a dozen cards.

Why?

1. The more you have the more overall credit you have and the more you can charge without having it shred your score for carrying a high balance. Total utilization of all your CL's combined seems to have more impact on your score than whats on a single card. I have more cards and have over $40,000 total credit available...so when I borrowed over what ended up being nearly $6500 to buy a new vehicle it barely scratched my FICO at the time. It never dropped more than a total of 5 points or so...and of course has only gone up as Ive been paying the balance down (pretty much paid off at this point).

2. The more cards you have the more offers you have on the table at any given time. Guaranteed out of my 9 cards at least one of them is offering me 0apr...or a very low APR for at least 6 months.

I have had thousands of dollars of debt on my cards over the last few years, nearly paid off now, and I'd bet that over all that Ive paid less than 3% total interest overall over the years.

Ive found that having a number of cards doesnt really seem to have any negative effect on my FICO so why not have as much credit available as I want?

:-)

Re: A question for those with multiple credit cards.

mrgoattoo — Thu, 27 Feb 2014 17:00:47 GMT

Some people like to have each card to maximize the best of each reward category. Some folks like to pad their available credit, so if they have a month that they have to float a purchase, their scores don't take a nose-dive. Some have so many so that their file is considered "thicker". Some people like the vanity of it. Some folks have it for necessity. Some folks have an addiction to seeing congratulations! lol

All of the above

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 17:40:42 GMT

Rewards maximization and sign-up bonuses. The thicker file and utilization benefits are a nice side benefit.

Re: A question for those with multiple credit cards.

JediNeo — Thu, 27 Feb 2014 17:40:49 GMT

Plus you don't want to put all your eggs in one basket. Look at the OCCU Duck/Beaver fiasco. If that was your only card you'd be SOL at the moment.

Re: A question for those with multiple credit cards.

wHiTeSoL — Thu, 27 Feb 2014 17:45:11 GMT

@Anonymous wrote:
Well, i have a 748 transunion, but it just dropped 2 points because of the Chase Marriott i just signed up for. I just got my First CC's 9 months ago, but i had high CS then as well.

@Anonymous't be fooled by a Fico score on a young credit file, 748 is a great score but it's only one piece of the puzzle. Imagine your credit profile (748 with oldest account @ 9 months) vs someone with the exact same 748 but has had 30 different cards/accounts over the past 10 years. Totally different story, not to say you aren't doing great because you are, just dont be fooled early in the game with a high score. Persoally I have a ton of cards because of sign up bonuses, in the last 8 months of really getting serious on my credit DW and I have accumilated enough points for 3 r/t business class flights to 4 different destinations in asia. IMO i worked so hard to clean up/maintain my credit I might as well use it to my advantage

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 17:47:43 GMT

@Anonymous wrote:
Well, i have a 748 transunion, but it just dropped 2 points because of the Chase Marriott i just signed up for. I just got my First CC's 9 months ago, but i had high CS then as well.

Right, it is perfectly possible to have a good score with a thin file (and two points is just noise). Thicker files come in when you want to do stuff, such as apply for new cards, either "normally' or aggressively churning cards to get sign up bonuses. As said earlier, with a thick file, adding new accounts has much less impact. If you have just one card, adding another approx halves the average age of accounts with a big score impact. With 30 open and closed accounts, another one has almost no impact.

Re: A question for those with multiple credit cards.

newUser0 — Thu, 27 Feb 2014 17:56:48 GMT

@Anonymous wrote:
Rewards maximization and sign-up bonuses. The thicker file and utilization benefits are a nice side benefit.

You have 9 cards from chase? Don't they supposed to have 6 card limit?

Re: A question for those with multiple credit cards.

Anonymous — Thu, 27 Feb 2014 17:59:58 GMT

@newUser0 wrote:
@Anonymous wrote:
Rewards maximization and sign-up bonuses. The thicker file and utilization benefits are a nice side benefit.
You have 9 cards from chase? Don't they supposed to have 6 card limit?

Yes. No; there's no hard limit AFAIK.