Credit Cards cancellation

[Anonymous]

Hi,

Now that I am set on having great credit score and great credit cards, I have a question regarding those cards I will be applying for then. Say 2 years from now I have one card from each of the major credit card companies, e.g. AMEX, Chase, Cap 1, Discover, etc. At that point, how should one garden those cards? I understand the concept of keep util low on 1 card and have the rest on 0, but if I just use 1 card wouldn't they cancel the other ones for inactivity? Or what one is supposed to do is use all of them monthly, but only keep a balance in 1 for statement? Which is why is hard to manage many credit cards since one has to use them all and pay all on time?

I want to make sure that when I am at that point I don't have to keep HP to open a card that was closed because it was not used.

Thanks.

[Anonymous]

The idea is to only let one report.

You can use all of them whenever you want, just make sure you pay all of them except for one off before the statement cuts in most cases and they'll report $0 utilization.  I say most cases because a couple companies report on a certain day of the month rather than your statement balance (US Bank, for example, reports on the last day of the month).

Edited to add: If you don't want to use them all every month you don't have to, just use them every few months to make sure they stay active.  Otherwise you can set up some type of subscription (if you currently have one - like example Netflix, Hulu, MyFico, etc) to different cards and an automatic payment to each of those cards a couple days after the subscription date (after it posts) and bam, done.

[Anonymous]

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@Anonymous wrote:

Hi,

Now that I am set on having great credit score and great credit cards, I have a question regarding those cards I will be applying for then. Say 2 years from now I have one card from each of the major credit card companies, e.g. AMEX, Chase, Cap 1, Discover, etc. At that point, how should one garden those cards? I understand the concept of keep util low on 1 card and have the rest on 0, but if I just use 1 card wouldn't they cancel the other ones for inactivity? Or what one is supposed to do is use all of them monthly, but only keep a balance in 1 for statement? Which is why is hard to manage many credit cards since one has to use them all and pay all on time?

I want to make sure that when I am at that point I don't have to keep HP to open a card that was closed because it was not used.

Thanks.

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You're confusing gardening with score optimization. For gardening, you're really just promising yourself that you won't app for new cards. Thus, you use the cards you already have. That's all there is to gardening. 

For score optimization, you want to have all but one cards report a zero balance, with the last card reporting <10% utilization. Mostly, this just involves setting calendar alerts for yourself so that you know when the statement date is, then paying the cards off online the day before that happens. You can still use each of the cards as you wish. 

However, remember that utilitization has no memory. If you're not going to be applying for something (a mortgage, car loan, more cards, whatever), then optimizing doesn't really matter and you're just giving yourself more work. In that case, you should just let autopay take care of paying-in-full for each card and not really care about utilization. 

[Anonymous]

Oh, it's also worth noting that Chase reports mid-cycle, so that should be your 10% card, if you're going to go the optimization route. 

[AirlinerDudeB6]

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@Anonymous wrote:

Oh, it's also worth noting that Chase reports mid-cycle, so that should be your 10% card, if you're going to go the optimization route. 

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It was my understanding (and personal experience) that Chase only reports during the cycle if/when you pay down your balance to $0.00

Ive never had them report a current balance mid-cycle on either of my Chase cards.

[noobody]

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@AirlinerDudeB6 wrote:

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@Anonymous wrote:

Oh, it's also worth noting that Chase reports mid-cycle, so that should be your 10% card, if you're going to go the optimization route. 

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It was my understanding (and personal experience) that Chase only reports during the cycle if/when you pay down your balance to $0.00

Ive never had them report a current balance mid-cycle on either of my Chase cards.

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since they report 0 balance mid-cycle, that is the reason they are NOT my 10% card

[Anonymous]

I see, so I don't always have to be on top of 1 report < 10% and rest 0, just a couple weeks before I want to apply for something. The auto pay from CC is also a good idea since I have quite a few services for a couple bucks each like Netflix, Pandora, myFICO, etc. If I put one on each of my current cards combined it should not amount to more than a few % so I can let all report and have it auto pay from debit card?

[NRB525]

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@Anonymous wrote:

Hi,

Now that I am set on having great credit score and great credit cards, I have a question regarding those cards I will be applying for then. Say 2 years from now I have one card from each of the major credit card companies, e.g. AMEX, Chase, Cap 1, Discover, etc. At that point, how should one garden those cards? I understand the concept of keep util low on 1 card and have the rest on 0, but if I just use 1 card wouldn't they cancel the other ones for inactivity? Or what one is supposed to do is use all of them monthly, but only keep a balance in 1 for statement? Which is why is hard to manage many credit cards since one has to use them all and pay all on time?

I want to make sure that when I am at that point I don't have to keep HP to open a card that was closed because it was not used.

Thanks.

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As long as you use each card every few months, it will stay active. For those cards that provide you some of the key benefits you really want, then you should use those the most frequently to keep them active. You apped them for a specific purpose, use them for that specific purpose. Or don't app in the first place

And I really have to wonder: If someone keeps a card at a zero balance, why was the card apped at all? PIF is best, but reporting zero on the statement after normal usage makes no sense to me.

[takeshi74]

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@Anonymous wrote:

I see, so I don't always have to be on top of 1 report < 10% and rest 0, just a couple weeks before I want to apply for something.

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Don't rely on X time.  Make sure that your reports have updated before applying.  Two weeks isn't going to ensure that the balances on your reports have updated.

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@Anonymous wrote:

I want to make sure that when I am at that point I don't have to keep HP to open a card that was closed because it was not used.

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Verify with each of your creditors what their policy is on closure due to inactivity and make sure you maintain at least the minimum activity required.

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@NRB525 wrote:

And I really have to wonder: If someone keeps a card at a zero balance, why was the card apped at all? PIF is best, but reporting zero on the statement after normal usage makes no sense to me.

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I don't understand your confusion.  Allowing zero to report and why the card was apped are two entirely different things.  One can have a useful card only report 0 balances for scoring purposes.  There are certainly other reasons as well.  Some may find a card that isn't used much useful for utilization padding.  You may not see utilization as signiificant but you can't assume your siutaiton and preferences to be universal.

In any case, do what works for you.  If reporting 0 doesn't make sense for you then you don't have to bother with it.  I don't worry about having my accounts report zeros.  Some do, some don't but even with most reporting balances I'm fine with my scores.

[NRB525]

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@takeshi74 wrote:

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@NRB525 wrote:

And I really have to wonder: If someone keeps a card at a zero balance, why was the card apped at all? PIF is best, but reporting zero on the statement after normal usage makes no sense to me.

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I don't understand your confusion.  Allowing zero to report and why the card was apped are two entirely different things.  One can have a useful card only report 0 balances for scoring purposes.  There are certainly other reasons as well.  Some may find a card that isn't used much useful for utilization padding.  You may not see utilization as signiificant but you can't assume your siutaiton and preferences to be universal.

In any case, do what works for you.  If reporting 0 doesn't make sense for you then you don't have to bother with it.  I don't worry about having my accounts report zeros.  Some do, some don't but even with most reporting balances I'm fine with my scores.

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Having a zero balance because you didn't use the card is one thing. Letting the card report a balance that you are going to PIF seems to be a rare occurrence around here