topic Too Many Credit Cards? in General Credit Topics

Too Many Credit Cards?

Anonymous — Mon, 16 Jan 2017 01:27:30 GMT

Hello!
I am a 20 year old college student and I'm worried I may getting too many credit cards. I'm not worried from the aspect of managing the cards, but how they affect eligibility for loans based on income and appartement rent, ect.

I make around 20,000 a year (before tax) and have included the cards below.

$2,500 Discover IT
$1,000 CapOne QuickSilver
$700 Kohl's
$9,600 AMEX BCE
$5,000 Chase Sapphire Preferred (Just Approved)

Is there any negatives to having this many lines of credit? One thing I'm worried about is I'm currently apartment shopping so I'm worried they may feel I have too much credit for my income level

Transunion score: 737

Equifax: 720

Re: Too Many Credit Cards?

Revelate — Mon, 16 Jan 2017 01:29:54 GMT

Nah, you're basically average for the American consumer base, 5 cards is a good number. Proceed with confidence .

Re: Too Many Credit Cards?

Anonymous — Mon, 16 Jan 2017 01:35:48 GMT

@Anonymous wrote:
Hello!
I am a 20 year old college student and I'm worried I may getting too many credit cards. I'm not worried from the aspect of managing the cards, but how they affect eligibility for loans based on income and appartement rent, ect.

I make around 20,000 a year (before tax) and have included the cards below.

$2,500 Discover IT
$1,000 CapOne QuickSilver
$700 Kohl's
$9,600 AMEX BCE
$5,000 Chase Sapphire Preferred (Just Approved)

Is there any negatives to having this many lines of credit?

No. Having several credit cards is not in itself considered a problem by FICO or Vantage Score, the two main scoring systems. Quite the contrary, you will get a scoring advantage from having several credit cards.

And to give you some context, having five credit cards is a very small number compared to what some people have. Some people, believe it or not, have 40, 50, or even 60 cards. (These people are typically opening the cards to obtaining the huge signup bonus, something you may have done with your CSP.) If you spend time looking at the "signature" of many of the people on this site, you'll see that a dozen cards is very common.

Congrats on the CSP, by the way! Have you figured out a way to meet the minimum spend required to get the bonus without buying anything you don't absolutely need? I ask because your gross annual income is 20k. A real danger with credit cards is they can induce us to buy things we wouldn't if we had to open up out wallet and pay for it with actual cash.

Re: Too Many Credit Cards?

Anonymous — Mon, 16 Jan 2017 01:41:14 GMT

Yes, I did indeed sign up for the bonus! I a a college student so will be buying my college books and other needed materials on it since this semester is starting this week and will be adding my boyfriend as an authorized user who has an annual income of around $70,000 and spends a lot more money than I do, I definitely won't be spending just to reach the $4,000! But I thought it would be nice to get the bonus from buying books and other materials I already buy. (My family is also used to me making them buy things and pay me back to their dismay!)

Re: Too Many Credit Cards?

Anonymous — Mon, 16 Jan 2017 01:57:37 GMT

Good for you. Unless you and your boyfriend think the card will be a huge advantage to you next year, I'd consider downgrading the card to a regular Chase Sapphire (no annual fee) in 10-11 months from now. Annual fee cards are usually a bad investment for people with low incomes. They are often a bad investment even for people who make 100k or more. (Of course there are exceptions: the Blue Cash Preferred is a good choice for a big family that spends several thousand a year on groceries, etc.)

Re: Too Many Credit Cards?

Anonymous — Mon, 16 Jan 2017 01:59:27 GMT

PS. Do you have any open installment loans?

And if so, are all of them student loans in deferment?

Re: Too Many Credit Cards?

Anonymous — Mon, 16 Jan 2017 02:09:54 GMT

I didn't even know they had a non-annual fee card thank you! I will definitely be looking into downgrading in 11 months. And yes, I currently have around $14,000 in student loans deferred.

Re: Too Many Credit Cards?

Anonymous — Mon, 16 Jan 2017 02:29:32 GMT

@Anonymous wrote:
And yes, I currently have around $14,000 in student loans deferred.

There's this cool trick that Revelate and other veterans here on the site discovered a couple years ago. It's called the Share Secure Loan technique. It's geared at giving people a big scoring benefit who have no open installment loans.

But three or four months ago there began to be some very tentative evidence that people who have only student loans (and which are all in deferment) might benefit just as much from the technique. (If that's true, it would be because FICO might score SLs in deferment very differently from all other installment loans.)

Would you might reading the first two posts of the following thread? (Just the Overview and the Theory post.) If it sounds like something you might be interested in, I'd love having someone in your situation volunteer to help us test it. It's easy and painless. And if works for a person like you, you'll get about 30 points extra on your score, so there could be a huge win for you in this too.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756

Let me know and I can walk you through what you'd do to prepare your profile for the test.

Re: Too Many Credit Cards?

SouthJamaica — Mon, 16 Jan 2017 13:22:42 GMT

@Anonymous wrote:
Hello!
I am a 20 year old college student and I'm worried I may getting too many credit cards. I'm not worried from the aspect of managing the cards, but how they affect eligibility for loans based on income and appartement rent, ect.

I make around 20,000 a year (before tax) and have included the cards below.

$2,500 Discover IT
$1,000 CapOne QuickSilver
$700 Kohl's
$9,600 AMEX BCE
$5,000 Chase Sapphire Preferred (Just Approved)

Is there any negatives to having this many lines of credit? One thing I'm worried about is I'm currently apartment shopping so I'm worried they may feel I have too much credit for my income level

Transunion score: 737
Equifax: 720

No you're good.

Re: Too Many Credit Cards?

Anonymous — Tue, 17 Jan 2017 03:46:34 GMT

"Too many" is a very subjective term. As mentioned above, there are people with 1 credit card and people with 60. Some of the people with 60 would argue that they don't have too many, while someone with 2-3 may argue that they feel they have too many. It's really all a personal thing.

Since you are only 20, I can infer that the 5 CCs you listed were all opened within the last 2 years or so. Some may consider this a lot for a new file, others wouldn't. I get it though, starting out some people roll with just 1 card for several years where others start strong out of the gate and go for say 5 approvals like yourself. I would just advise against opening any unnecessary accounts or accounts that you don't need. I'm not suggesting that 5 cards in 2 years is a "bad" idea, but if you were to repeat this behavior for the next 4-6 years you could then have 15-20 cards. And, again, it would be arguable as to whether or not that number is "too many" depending on who you ask.

I think you're doing just fine though, especially if you garden for a while and just let those 5 accounts age and grow.

Re: Too Many Credit Cards?

grillandwinemaster — Wed, 18 Jan 2017 17:38:33 GMT

As most posters have concurred, "too many" is subjective and everyone's needs are different.

However, some food for thought, if your 5 cards were acquired recently, Chase, one of the largest credit card issuers would essentially automatically deny you for any more credit cards for the next 2 years. So according to there scoring matrix, you have acquired too many credit cards.

Best credit wishes to you!

Re: Too Many Credit Cards?

grillandwinemaster — Wed, 18 Jan 2017 17:46:47 GMT

@Anonymous wrote:
will be adding my boyfriend as an authorized user who has an annual income of around $70,000 and spends a lot more money than I do,

Be very cautious with this move. Your very young, and I'm assuming so is your boyfriend. It would be very easy for things to go "south" between the two of you and you can be left "holding the bag" for a balance that could prove difficult to pay on your income alone.

For what it's worth, I'm just giving you the same advice I would give my own daughter.

Best credit wishes to you!

Re: Too Many Credit Cards?

wa3more — Fri, 20 Jan 2017 00:45:27 GMT

My 2 kids are a few years older than the OP and i would tell them this :

- You have 1 years worth of income available to you as credit . What happens if you lose your job ?

- I'm not a big fan of credit cards and think 2 major,,,maybe 3 cards might be enough.

-College students are the fastest growing segment of the market filing BK.

- But i would ask - why on earth do you need 5 credit cards ??

But what do i know, i'm just an accountant in my 50's who was a licensed advisor at one point for one of the major investment banks.

Also, adding AA is , in my opinion , a bad idea.