topic Re: Developing a Plan For My Cards With Annual Fees in Rebuilding Your Credit

Developing a Plan For My Cards With Annual Fees

Anonymous — Fri, 09 Jul 2021 06:05:43 GMT

Looking for input from the pros on how I should plan to use these "crappy" cards I got because I was looking at a longer term picture. First of all I got my First Premier and First Access card for an up front access fee because I believed that the revolving credit accounts would help me establish responsible payment history. (Hoping I did the right thing). I came back to MyFico because there is so much valuable information here and throughout the past couple days I have been reading a lot about people not paying to have credit....so how long is suggested to plan to keep these types of cards? What should I look to have achieved before getting rid of them? As always, I am humble, and appreciate all feedback, no matter how brutally honest. Thank you all for your wisdom and help.

Re: Developing a Plan For My Cards With Annual Fees

FireMedic1 — Fri, 09 Jul 2021 10:52:50 GMT

Well many have to get the "crappy cards" to start a rebuild or start from fresh. I see you have a non vulture card with Cap1. Thats great. Cant see who the others are. No pic showing. You really only need 3 cards for best FICO scoring. FICO doesnt care if its secured or not. Its an account in FICO's eyes. It does help you build a credit file. Whichever one is coming up on the annual fee. Close it before that happens. Or if any of those have a monthly fee also. Say C-Ya! If all the pics were there. Looks like you have 7 accounts. Thats plenty. Closing a card doesnt really hurt a score. It will stay on your report for 10 yrs as a positive. Just dont drop below 3 cards. If we had more info like whats the time frame when you got all these cards would help too. It may come down to holding off on a newer card for now or not. If you could list the dates of each cards open date. that will do wonders and go from there.

Re: Developing a Plan For My Cards With Annual Fees

Anonymous — Fri, 09 Jul 2021 12:41:57 GMT

Based on your reply I probably messed up a bit recently when Credit K told me I had outstanding odds for a couple new cards and I got them. (Got anxious) From your answer I understand that I don't need anymore cards and probably have more already than I need. I will close both First Progress cards, Credit One and First Premier at their annual dates. I will of course keep my NFCU and Capital One and next year this time see if I can get a 3rd, no fee card. I will be patient with this. Thank you for your feedback.

Here is my breakdown:

NFCU nRewards | NO ANNUAL FEE | Opened 9/25/2018

First Progress Elite | $29 annual fee | Opened 4/5/2021
First Progress Select | $39 annual fee | Opened 4/28/2021

Credit One | $75 annual fee | Opened 6/8/2021

First Premier | $95 annual fee | Opened 7/2021

Capital One | NO ANNUAL FEE | Opened 7/2021

Re: Developing a Plan For My Cards With Annual Fees

Anonymous — Sat, 10 Jul 2021 06:05:03 GMT

@Anonymous

Here are my humble thoughts:

1. NFCU nRewards | NO ANNUAL FEE | Opened 9/25/2018

Keep - this one will hopefully graduate (although that makes no FICO difference, as @FireMedic1 stated) and will become something very useful for you.

2. First Progress Elite | $29 annual fee | Opened 4/5/2021

I would keep, actually. Why? The AF is only @$29, which is the lowest of all of them.

3. First Progress Select | $39 annual fee | Opened 4/28/2021

I would close. 100%

4. Credit One | $75 annual fee | Opened 6/8/2021

I would close, too. These guys supposedly charge interest on all transactions the day that said transaction posts. Say bye-bye!

5. First Premier | $95 annual fee | Opened 7/2021

I would close, too! This is your highest AF. Eat the $95 and say bye-bye.

6. Capital One | NO ANNUAL FEE | Opened 7/2021

100% keep this.

So, this keeps you with three credit cards and only $29 in AFs. And the "quality" of the credit cards that you will maintain is - imho - so much better. Now, closing the three accounts will cost you some FICO points in the short-term. But, this is likely something that will 'correct itself" in about three months. All credit profiles are different so it might be a longer time frame than three months for you, specifically.

If there were Hard Pulls for the credit cards (and I would think that there would be for each of the six) then you will have those for two years each (well, two years from the date of the HP). I believe that the effect of said HP declines over time and essentially after one year you get those initally lost FICO points back (as mentioned above). Where this *could* have an effect would be with credit card companies - like Chase - that have "hard pull" rules in place (again, Chase and its 5/24 rule.....there are others as well).

Why three credit cards? Because of the All Zero Expect One (aka, AZEO) concept. You ensure that two of the credit cards report $0 balance (and that is based on the Billing Cycle Closing Date - or whatever each creditor calls it. That is the date that the creditor reports the "status" of the credit card to the Credit Reporting Agencies.....please note that this is *NOT* the due date). With the third credit card, you ensure that there is a small balance (keep it under 30% if possible.....better would be under 8.9%) on the Billing Cycle Closing Date. FICO scoring likes to see a $0 reported balance on more than 1/2 of the credit cards.....so, to achieve 'more than 1/2' you "need" three credit cards.

This AZEO supposedly provides an additional 10 - 30 points (again, all credit profiles are different so YMMV). Some people categorically refuse to do AZEO. There is no right or wrong answer to that....only "your" answer.

Hope that this helps!

Re: Developing a Plan For My Cards With Annual Fees

FireMedic1 — Sat, 10 Jul 2021 09:55:12 GMT

@Anonymous wrote:
Based on your reply I probably messed up a bit recently when Credit K told me I had outstanding odds for a couple new cards and I got them. (Got anxious) From your answer I understand that I don't need anymore cards and probably have more already than I need. I will close both First Progress cards, Credit One and First Premier at their annual dates. I will of course keep my NFCU and Capital One and next year this time see if I can get a 3rd, no fee card. I will be patient with this. Thank you for your feedback.

Here is my breakdown:
NFCU nRewards | NO ANNUAL FEE | Opened 9/25/2018
First Progress Elite | $29 annual fee | Opened 4/5/2021
First Progress Select | $39 annual fee | Opened 4/28/2021
Credit One | $75 annual fee | Opened 6/8/2021
First Premier | $95 annual fee | Opened 7/2021
Capital One | NO ANNUAL FEE | Opened 7/2021

Great. Never ever go by CK's advice. They're in the business of getting a cut when people sign up for cards from their site. The folks here can give better chances you'll have on a card your interested in. Every card below I researched after BK before I applied on here. So its best to chill till next year. 5 new accounts in 3 months has to chill and age. Plus the HP's will be gone off your FICO reports in a year. They will stay on the Vantage sites for 2 yrs but that doesnt mean a thing. So really your set for now. As I posted earlier. These cards are helping you build a good file. Just trying to save you some $ on the fee cards. We all want it now and fast. But it doesnt work that way. It took me 6 yrs next month to build whats below after a BK. It will come. Patience grasshopper...

Re: Developing a Plan For My Cards With Annual Fees

Conraddj — Sun, 11 Jul 2021 13:55:50 GMT

Can you share your current limits on those cards