Discussion - Multiple CCs vs. fewer CCs

[s_haliz]

I am always curious and I am sure you all (or at least majority of you) might be curious too.. 

Say two people had very identical profile.....But differences in terms of credit cards they have and CL on each of their cards. 

Person 1: CC1 - $10,000 CL | CC2 - $5,000 CL | CC3 - $3,000 | CC4 - $12,000 | CC5 - $7,000 | CC6 - $9,000 ......Total CL: $46,000 
Person 2: CC1 - $20,000 | CC2 - $10,000 | CC3 - $16,000 ........Total CL: $46,000 

For example sake, let's assume that their credit utilization ratio is also simiar...Say 3% overall utilization. 

Now let say they both applies for new credit card......Whom will be looked more favorable in terms of credit limit assigned to the new card? Person 1 or Person 2? 

[compassion101]

If I were a bank* I would be more likely to give credit to the one with fewer cards, 1) more liklihood he would use my card and 2) he seems like he gets the credit he needs rather than racking up bonuses etc. But I don't think it would make a huge difference if they both had good credit.

* I am not a bank

[nachoslibres]

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@compassion101 wrote:

If I were a bank* I would be more likely to give credit to the one with fewer cards, 1) more liklihood he would use my card and 2) he seems like he gets the credit he needs rather than racking up bonuses etc. But I don't think it would make a huge difference if they both had good credit.

* I am not a bank

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I'd go with this.  But every bank has a different risk algorithm so who is to really say?

[Kenny]

I think the likelihood of the 2nd person's initial credit limits being higher than the first person are much higher than the 1st person getting the larger line.

One of the pros to being the first type of person is that you can somewhat expand your total CL amount quicker than relying on a smaller number of cards as you will quickly reach their ceiling of exposure related to income. (Just my opinion!)

I have respect for both approaches. Wish I could be more like approach 2, but realistically I'm more like #1 -- trying to adjust down to approach 2, though. lol

[eagle2013]

Person 2 definitley will have more favorable terms and higher CL relative to Person 1.

I've pretty much exhausted a lot of the CC options - total of 19 or 20 cards. A few of them are AF travel cards that are getting ditched next year now that I've liquidated the bonuses. I expect my CC portfolio to shrink down quite a bit. My goal is to have a total of no more than 5 cards in use: CSP, Sallie Mae, Sams Club MC and Fidelity AMEX. The rest either reallocate limits or SD. 

[Anonymous]

Impossible for us to say!   It's also sort of unlikely that they would have the same score in this case.  You can make cases for either side easily enough.

For example: assume that both have a perfect payment history.   A UW could argue that that means more for the person with lots of cards than the person with fewer (if you had just one card, not missing a payment doesn't show that you have good management, of course being late on your only card would be bad).   So I'm more willing to give the person with more cards my card, as he/she seems to know how to handle them.

But as others have said, if both have similar good scores, payment history and reported income, they may well be treated the same, as these differences may not be key ones.

[joltdude]

Interesting you should mention this.. The short.. One of my folks wanted a credit card in their name only, for various reasons.. Wanted cashback and not points, as well as no annual fee and didn't want to deal with categories... Their wallet basically consists of two cards (with limits unknown to me).... One has a third card in their name only, and the other wanted a third card as well.... Go to the prequalifiers for a few of the majors, and they all prequalified for cards.. Chose one.. and it was an instant approval for 10k!..... So.. the other was complaining about their Walmart card....Logged into their account and hit the Luv button... BAM! Add 8K to their limit.. but oddly the avalible credit screen has not gone up.. Another family member wanted their second card... theve been getting offers from ole' Amex..... Filled out the form.. They had preapprovals for SPG and ED, Wanted BCE.. I said.. Cold app.. you shouldn't have an issue... BAM... 3K on initial..Some really bad system lag so ended up calling to get the limit. Said sit tight and wait the 61 days...  The moral of this story.. These are folks with FEW cards (one had 3, one had 2, and one had one)..  Creditors *DO* look well at this type of cardholder... and a little bit differently, esp it seems with higher limits to suit their  "payment style"... Im pretty certain these type of folks have a very high AAoA as well as don't max them out and tend to PIF... and that doesn't hurt either.

[s_haliz]

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@compassion101 wrote:

If I were a bank* I would be more likely to give credit to the one with fewer cards, 1) more liklihood he would use my card and 2) he seems like he gets the credit he needs rather than racking up bonuses etc. But I don't think it would make a huge difference if they both had good credit.

* I am not a bank

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Thank you for your opinion. 

[s_haliz]

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@nachoslibres wrote:

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@compassion101 wrote:

If I were a bank* I would be more likely to give credit to the one with fewer cards, 1) more liklihood he would use my card and 2) he seems like he gets the credit he needs rather than racking up bonuses etc. But I don't think it would make a huge difference if they both had good credit.

* I am not a bank

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I'd go with this.  But every bank has a different risk algorithm so who is to really say?

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Absolutely. 

[s_haliz]

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@KennyRS wrote:
I think the likelihood of the 2nd person's initial credit limits being higher than the first person are much higher than the 1st person getting the larger line.

One of the pros to being the first type of person is that you can somewhat expand your total CL amount quicker than relying on a smaller number of cards as you will quickly reach their ceiling of exposure related to income. (Just my opinion!)

I have respect for both approaches. Wish I could be more like approach 2, but realistically I'm more like #1 -- trying to adjust down to approach 2, though. lol

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You are fine. Keep in mind sometimes person of Approach #2 just happens to be. Not necessary that's the path they had chosen......