Approved for both CSP and Cash+ ...now what?

[wiivile]

I'm 26, and still kind of a newbie to this credit card thing.

The Chase Freedom was my first credit card, originally with a $1000 credit limit in 2009 and now that I've been using it for four years it has a $3200 credit limit. I needed more credit though, as I've been spending a lot more since 2009 (particularly on restaurants since I eat out every night and restaurants make up for at least 60% of my spending). I've been approaching 70% credit utilization every month on the Freedom (not good, but I've been paying it off before the statement closes so as to not damage my credit scores). So I decided that I needed to apply for another credit card. Shouldn't be a problem, since my FICO scores are all in the mid 700s.

Since I Have 111,000 UR points saved up after four years on my Freedom, and the Chase Sapphire Preferred offers the best redemption options for UR points (as well as a 40,000 point bonus), I wanted the CSP. However, since I only average $12K-$15K annual spend, and I wasn't sure that this was enough to justify the $95 annual fee - other cards with no AF may be more rewarding, particularly the U.S. Bank Cash+. Since the Cash+ offers 5% back on restaurants (up to $2,000 per quarter, and I do spend around $2,000 per quarter on restaurants), I could get at least $400 cash back every year (plus the rest of its 2% and 1% bonuses) with no annual fee. Even with the awesome redeption options of the CSP, I don't think it can top getting $400-$500+ cash back every year with no annual fee on only $12K-$15K spend.

Since I couldn't decide between the CSP and the Cash+, I applied for and was approved for both the CSP (12K credit limit, which quintupled my overall credit limit from $3200 to $15200!) and the Cash+ (credit limit to be determined), but now I can't decide which card is the "keeper". Obviously I want to spend $2,000 within the first 3 months on my CSP in order to qualify for the 40,000 point bonus, but after that, the Cash+ is probably going to be more lucrative to me because of the year-round 5% on restaurants, which makes up most of my spend

After qualifying for the 40,000 point bonus, should I put the CSP in a sock drawer and just use the Cash+ as my everyday card, then cancel the CSP before the Annual Fee hits and transfer its $12K credit limit to the Freedom? If so, what should I do with my 150K+ UR points?

Did I make a mistake applying for both the CSP and Cash+ when I couldn't decide? Does it look bad to have three credit cards (and applying for two at the same time)?

I know this is a long post but I appreciate any advice you credit gurus can provide...

[Beane]

I think the Cash+ has added $2000 quarterly caps to their 5% categories, which may not make it as appealing.  So if you already have the cards then I guess it makes sense to do your first $2k on the Cash+ and the rest on the CSP each quarter for restaurants.

[Themanwhocan]

If you redeem $100 worth of Cash+ rewards, ie if you wait until you have that much, you get a bonus $25 in the form of a gift card I think, once per year per card.

Cash+ has no annual fee, and is a Visa Signature. There really isn't anything wrong with acquiring that card.

[longtimelurker]

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@Beane wrote:

I think the Cash+ has added $2000 quarterly caps to their 5% categories, which may not make it as appealing.  So if you already have the cards then I guess it makes sense to do your first $2k on the Cash+ and the rest on the CSP each quarter for restaurants.

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Well, there is the fee to take into account.  CSP only gives 2% on dining, which is just 1% more than Freedom (and US Bank after the cap), so, if restaurants were the only use, the OP would have to spend an extra $9,500 at restaurants after the $8K on US Bank to justify the annual fee.

Of course, if the CSP is used to transfer points to partners, or to buy travel at UR mall, the value of the card increases.  But for straight cash back, it might not be worth keeping once the fee hits.

ETA: And three credit cards isn't a problem, lots of us here have many more (some much much more!)

[Beane]

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@longtimelurker wrote:

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@Beane wrote:

I think the Cash+ has added $2000 quarterly caps to their 5% categories, which may not make it as appealing.  So if you already have the cards then I guess it makes sense to do your first $2k on the Cash+ and the rest on the CSP each quarter for restaurants.

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Well, there is the fee to take into account.  CSP only gives 2% on dining, which is just 1% more than Freedom (and US Bank after the cap), so, if restaurants were the only use, the OP would have to spend an extra $9,500 at restaurants after the $8K on US Bank to justify the annual fee.

Of course, if the CSP is used to transfer points to partners, or to buy travel at UR mall, the value of the card increases.  But for straight cash back, it might not be worth keeping once the fee hits.

ETA: And three credit cards isn't a problem, lots of us here have many more (some much much more!)

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Can't he just ask to be PC'd to the regular Chase Sapphire after his initial year?  That one has no AF and has the 2x points on dining.

[longtimelurker]

Yes, that would be a good solution.  I thought you were proposing keeping the CSP open.

[wiivile]

I definitely don't regret applying for the CSP, because the $12K credit line will help immensely even if I decide to close the account after the year and move the credit line to my Freedom (I will never close the Freedom, just because it's my card with the most credit history). I'm just unsure what card to put my spending on (it only makes sense to me to put my spending all on one card).

Also, do you think that even though I took two hard pulls at the same time, my credit score will actually increase as a result of these approvals because my credit limit went from $3200 to over $15K?

[longtimelurker]

The credit score takes a small hit from the two inqs, but these matter less as time goes on and disappear (for FICO) after a year.  The impact of increased lines is mainly on utilization, and that depends how much balance you let report (and I think you said you didn't).

Re charges on one card:  the only reason to do that is for convenience or if you are building points for a program.   With your cards, it makes more sense to use the Cash Plus for the 5 and 2% categories you choose (avoiding overlap with the Freedom and CSP), and the Freedom for its 5% when possible.  Charges outside that categories can be on any card to earn the 1%.  (Well, with the bonus, the CSP gives 1.07% but you would have to pay the annual fee to get that bonus reliably.)   You probably want to make sure you earn at least $100 on the Cash Plus, to get the $25 bonus there.

If your goals change and you want to travel and transfer points to partners, then use Cash Plus only for the 5% and freedom/csp everywhere else.

But most important: make sure you meet the spend to get the bonus on the CSP, $400 is a lot to lose

[Beane]

I maximize my cashback across 4 cards right now.

BCE - Groceries/Gas

Barclay Rewards - Everyday purchases/Utilities

Discover IT - Online purchases (Next quarter Restaurants)

Freedom - Amazon (Next Quarter Gas)

I probably run 2-3K total through these cards a month in varying degrees.

[wiivile]

My problem is that in order to justify the annual fee for the CSP, I would need to put almost all my spending on the CSP to earn enough points. But since the Cash+ is better for restaurants (most of my spending), I'm left with putting 'everyday spend' on the CSP, which will not earn me enough points to offset the fee. So, I'm thinking I'll only have the CSP for a year (after earning the 40,000 bonus and transferring points to partners), after which point I'll simply transfer the credit limit to the Freedom (because it's my oldest card and I'll never close it).

Does it look bad on the credit report to have a card (CSP) that's cancelled after a year?