Credit Card lessons learned at end of year

[Anonymous]

Loved every word of this, they should promote you here at myfico forums!

[Anonymous]

Finding a happy medium between gardening and spreeing:  I don't, have not before and never will 'garden' for the sake of gardening.  There isn't a hard and fast timeline on my credit needs.  I apply for what I want, when I want, when I feel my profile supports it.  That's how I've gotten all my cards up to this point.  Having said that, spreeing isn't my thing either.  Adding accounts that may or may not be valuable to me in the future depending on my needs, in numbers higher than what I would normally carry, makes no sense either. Ultimately, my goal is to have at least 1 category (accomplished with Chase Freedom and Discover IT), one dining and travel card (CSP to go along with Freedom), and one primarily general spending card that's also good for gas and groceries (Amex EDP works with general spending because of the 30 swipe bonus), as well as one limited use emergency spending card (hasn't been determined yet since I want the funds to back it up in liquid assets, and I need to decide which card is going to do that).  And last, a couple of useful store cards (Walmart and Amazon have those covered).

Not following the herd off the cliff: This means not going for the flavor of the month cards (Duck/Beaver Cards, NASA, BBVA Compass NBA, Comenity SCT) which may or may not come back to bite people in the future (as it has with most of the above listed examples) and just going for what works for you, and what has been around and known for years. For me that's Chase, Amex, Discover and (to a certain extent) Synchrony. All cards I've had for the better part of 1 year, some newer than others, but all are cards I could stay with and feel safe in the notion that they're not going anywhere as long as I don't do anything to tick them off. Also the reason I haven't bit on a Venture card since I have dealt with Capital One in the past, and don't wish to do so again based off that experience. 

What's right for you isn't necessarily right for others: I try to keep that in mind as I read posts on this and other boards like it.  I'm happy sticking with 4-7 cards and using those regularly, I would have an anuerysm trying to keep track of 20+ cards.  Diversification is overrated. On the other hand:

What's right for others isn't necessarily right for you: You don't have to be the one that collects credit cards just because others are doing it.  If you have the financial profile to fit, you can do the same with 4-7 cards that you can do with 20+.  The time it takes to build up to that is the same time it takes the hoarders to watch it all come crashing down and wind up in bankruptcy court. 

Credit isn't the only thing: I'm slowly rebuilding my savings, finally have a 401k established at my employer, and I'm looking into a brokerage account to get into stocks and other liquid investments.  My overall financial picture is what's important here.  I've always believed given the choice I'd rather have $100k in liquid assets than $100k in CLs. 

It's a marathon, not a sprint: Last year at this time, I had a Credit One account and a couple of store cards, got Chase Freedom, and canceled CreditOne while keeping the store accounts alive.  At this time last year my scores were mid-upper 500's (580 or so) now my highest score EQ is now 660, and the others aren't far behind. Once my balances come down (they're getting there), 700 will be easily obtainable. 

[jeffery581]

I agree completely. I have learned these this year as well.

# 9 "Credit is a journey, not a race."

Would a Speedy Scenic route be ok? 

[Anonymous]

I have learned everything I know about credit in this year. Before finding my way to these forums in April of this year, I had one, $300 (I think) Comenity card. The only thing I knew about credit was charge and pay. I couldn't list all of the things that I have learned, but I can pick the most important lesson: Plan for your future. At this time, I am working on rebuilding my savings, paying down my student loan, letting my tradelines age, and aging off my inquiries while I research mortgages and auto loans, so that someday I may be able to buy a home and then a newer truck.

And equally as important, don't judge others based on their past credit mistakes. Most of us have made mistakes. A handful have escaped that path and made good decisions. Either way, we are all here to learn and grow and not to look down on those that may be in another category. Just be kind.

[Brenex]

Thanks for the posts! There is a lot of good information here and I completely agree with a lot of what is being echoed here. It's important to determine what you actually need and could put to good use and to be responsible with your assets. This site helped me figure out how the whole credit thing works a few years back and I'm pretty grateful for that. If there is one thing I re-learned and am happy for this year it's the importance of PIF and/or having just a small utilization balance. 

[Anonymous]

Great Posts....thanks for sharing valuable information which otherwise would only come by experience, which in turn means i have to go through the churn to get experienced...this is one of the reasons I like this Forum

I learnt Two important things this year:

1. Use the cards regularly and PIF as far as possible.

2. If not using a card for a longer period or the card doesn't make sense or has higher fees, do not hesitate to close it.

[NRB525]

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@Anonymous wrote:

Credit isn't the only thing: I'm slowly rebuilding my savings, finally have a 401k established at my employer, and I'm looking into a brokerage account to get into stocks and other liquid investments.  My overall financial picture is what's important here.  I've always believed given the choice I'd rather have $100k in liquid assets than $100k in CLs. 

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Something to clarify for many here:

This is an asset, something you own.

This is pretend, something that the banks may or may not allow you to borrow, but which will likely cost you a lot of future money to pay back if you do borrow it. You do not own this. You can only create obligations for yourself with this.

There is an important distinction between the two.

After years in the high-utilization wilderness, this year was a nice change. I got utilization down to levels where the banks are making easy CC approvals. I learned more clearly that credit is a cyclical arrangement: As long as you pay back the money, the banks are happy to lend more to you. It's up to each of us to determine how much we want to borrow, and borrow responsibly.

And I'll echo the sentiment that those of you who are rebuilding from negatives have my rspect. You are making the hard choices that are necessary to get your credit back on track, and that will serve you well in the long term.

[Anonymous]

I think points 8, 9, and 11 are the most important. Not only on the forums, but in life as well  

[Anonymous]

+1 Absolutely fabulous post. Great learning was had this year. Looking forward to next year to keep applying the lessons! Best wishes to all.

[msbia]

Biggest lesson I learned in 2015: 

Just because a bank (and I'm giving YOU the side-eye BOA) sends you balance transfer offers, checks, emails, etc. it doesn't necessarily mean they want you to use them. Lesson learned, moving on!