How many Credit Cards are too many?

[Anonymous]

To put my thoughts into perspective - We are planning to buy our first home in 2017. I am trying to put things in place to get the best rate possible at that point. I recently opened 4 Credit Cards in 2014 and 1 last week. I now have a total of 12 Credit Cards with the oldest cards being over 12 years old. My concern would be is 12 credit cards too many to apply for a mortgage? If it turns out to be too many, I might even factor in canceling out couple of cards that I applied for in 2014. I have my utilization below 20% right now - Even with these cards closed, I should be able to bounce back my Credit Score by 2017. What do you think?

[Anonymous]

Stop applying for new credit cards at least 1 year before your mortgage, preferrably 2 years. You want to have no inquiries and aged accounts when you apply. Canceling existing cards won't help, so you might as well keep them active unless you want to close them for a particular reason. Lenders generally don't care if you have 12 or 50 cards. What matters to them is how old and established those accounts are. Opening new accounts will hurt a little and having inquiries and new accounts within a year of your mortgage will hurt more. Too many CCs generally won't hurt your mortgage chances, though it can occasionally hurt your chance of getting CCs from small issuers like CUs. 

TLDR: Don't apply for more cards. Don't apply for other credit. Let your accounts age. Don't close cards unless you have another non-listed reason for closing them.

[chwebb1]

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@Anonymous wrote:

To put my thoughts into perspective - We are planning to buy our first home in 2017. I am trying to put things in place to get the best rate possible at that point. I recently opened 4 Credit Cards in 2014 and 1 last week. I now have a total of 12 Credit Cards with the oldest cards being over 12 years old. My concern would be is 12 credit cards too many to apply for a mortgage? If it turns out to be too many, I might even factor in canceling out couple of cards that I applied for in 2014. I have my utilization below 20% right now - Even with these cards closed, I should be able to bounce back my Credit Score by 2017. What do you think?

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I wouldn't get any more credit cards (or other loan accounts) unless absolutely necessary (i.e. your car dies and you need to replace it and have to get a loan to do so). I'd garden what you have until you're ready to buy your home in 2017. As long as you're responsible with the cards (i.e. don't run up large balances), you shouldn't have an issue getting your mortgage. When you're ready to apply, do try to keep credit card debt to a minimum (less than 10% of your credit limits). Over the next two years, I'd just focus on getting APR reductions (if APR is important to you) and soft pull or auto-CLIs on the accounts that you currently have.

[Anonymous]

5 in my book, but to each his own.  I just don't want to manage more than that.

[Imperfectfuture]

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@Anonymous wrote:

5 in my book, but to each his own.  I just don't want to manage more than that.

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6 at the most (maybe an extra low interest rate one for emergencies).  Just my personal preference.

[Anonymous]

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@Anonymous wrote:

5 in my book, but to each his own.  I just don't want to manage more than that.

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Right, but OP was talking in the context of a mortgage app, not the usual "how many is too may" weekly discussion.

I don't go along with no apps for two years, but certainly unnessary apping will lower your score and if it is recent, you may need to provide extra documentation near closing (I had to explain what I applied for and whether it generated a new credit line).

ANd this seems to vary, but in some cases a card reports a "monthly payment" and some mortgages count these towads the DTI levels.   Often these seem small, $15-25, but enough of them could start to add up.   

[Anonymous]

Probably different for new mortgage versus refi, but since I've started my CC app addiction in 2007, we've refi'd about four times (dang rates kept dropping!) and have never had a problem. On average, we apply for about six new cards a year. Most recently, we app'd for a refi in late 2012 with 32 open cards, about six of which were less than one year old and twelve were less than two years old. Never even raised a ripple. Now, back in '07 we were carrying some large BT balances, up to $20k representing 95% of available balance on the card in question. (Ah, those halcyon days of profligate 0% no-fee 15 month balance transfers.) Anyway, that *did* raise some question, and I ended up paying off a couple of them a couple of months early just to smooth things over. And I had to explain some large transfers of money; $20k from a CD to a savings account to a checking account to pay off a B/T. But in the end it never ended up stopping us from getting a loan.

Chris.

[Anonymous]

68.

[pazuzu]

Until you obtain more cards than Ron1, don't bother asking.

[Anonymous]

6.  1 of each (MC, AMEX, VISA, Discover) and two backup cards.  In my case, make 1 a 5% cash back card (Chase Freedom), one a gas and groceries, one a travel card, and 1 a 1.5% or higher points card.  That would be plenty for me.