How many cards, and how high?

[Anonymous]

Hi, 

I'm just getting back into the credit card game, since finishing grad school. I applied, and to my surprise, was instantly approved for a Capital One Venture Rewards card with a limit of $20,000! It is my only card. In another thread I asked if this limit wasn't too high, and if I should have it lowered. The answer I received was that I should not have the limit lowered and that I should have a second card.

So, here is my question, what is the rationale for having 2 cards, and is there any risk in having really high credit limits (other than the temptation to go buck wild and carge up the world)? Like, should I reserve some available credit, in case I want to buy something else on credit? I can't imagine what, but, who knows? Or, is it risky to have so much credit available in case I lose the card and someone else finds it?

What is the FICO wisdom on responsible credit card ownership, other than the obvious (keep the balance below 10%)? If there is another thread that details it all, feel free to point me to it.

[smallfry]

I think 3 credit cards would be best. Rotate usage each month and you should be fine. Less than 3 cards might be considered a thin file.

[Anonymous]

It's a little confusing, isn't it? Seems to fly in the face of the wisdom to only apply for credit if you need it. The gaming of the system is much more intricate than that. I have student loans and a car loan, so I have a ton of credit history. I thought I read somewhere that having fewer open lines of credit was better. Maybe even somewhere in my FICO report. Not so?

[MarineVietVet]

---

@Anonymous wrote:

Hi, 

I'm just getting back into the credit card game, since finishing grad school. I applied, and to my surprise, was instantly approved for a Capital One Venture Rewards card with a limit of $20,000! It is my only card. In another thread I asked if this limit wasn't too high, and if I should have it lowered. The answer I received was that I should not have the limit lowered and that I should have a second card.

So, here is my question, what is the rationale for having 2 cards, and is there any risk in having really high credit limits (other than the temptation to go buck wild and carge up the world)? Like, should I reserve some available credit, in case I want to buy something else on credit? I can't imagine what, but, who knows? Or, is it risky to have so much credit available in case I lose the card and someone else finds it?

What is the FICO wisdom on responsible credit card ownership, other than the obvious (keep the balance below 10%)? If there is another thread that details it all, feel free to point me to it.

---

Hello and welcome.

I don't go along with the notion that having more than one card is absolutely essential. There are peope who have high scores with just one CC. But I can see several reasons to have at least a second card.

1. Accounts do keep closed for no apparent reason and with no forewarning and you want to have another one just in case.

2. You might be somewhere and try to use a card and for whatever reason it is denied. Not only can that be embarrasing but you might end up stranded in a worse case. Having a second card as a backup can relieve the fear of "what if".

There isn't a downside to having high credit limits as long as you are responsible with usage. You are correct that it can be a temptation for some to use all the CL but that's where self discipline kicks in.

You'll get different opinions and suggestions about the best way to use your card and/or cards. You'll have to figure out what works best for you. There is one approach that works for many people but it's something that really doesn't have to be adhered to closely unless you just want a hobby or you are trying to tweak your score upwards in anticipation of applying for new credit in the near future.

Have only one of your cards report a small (<9% of credit limit) balance on it's monthly statement and then PIF (Pay in Full) before the due date to avoid any finance charges. On any other cards you might have always have them report a zero balance on their statements. That doesn't mean you can't use them but time your payments so that the desired zero balance is achieved several days before the statements post.

That's just one strategy and you'll probably get others. As I said you'll need to figure out the best tactic for your situation.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

Thanks, I think I'll stick with just one, actually. Since it's already, essentially, my backup in case of some emergency, but mostly a way to rack up milage points, rent cars and secure hotel reservations, I don't really feel the need for an extra backup. Maybe someday I'll see the reason for it. I plan to use it regularly, and try to set up a way to pay it off right away, rather than waiting for the bill to come. We'll see what the options are when it arrives and I set up the web thingy.

Thanks, again.

[Anonymous]

Personally. I would rather have one card with high limits than 10 low limit ones. The whole point is to have a decent amount of credit reporting on your CR in my humble opinion. You seem to have a car loan, student loan and one good card with a remarkable starting limit. Just guard it with your life, the less cards you have to juggle the better I say

[Anonymous]

Well, then it's settled. Capital One Venture Rewards FOR LIFE! 

[Anonymous]

You may change your mind when your installment loans close. 

[smallfry]

---

@Anonymous wrote:

Well, then it's settled. Capital One Venture Rewards FOR LIFE! 

---

Kidding right? You're gonna place all your eggs in a Cap One basket? 1 CC for sure is ill advised. With 3 you can use 1 each month let it report and rotate and never lose points for too many accounts reporting balances.  1 is a bad idea. 

[Anonymous]

---

marinevietvet wrote

Hello and welcome.

I don't go along with the notion that having more than one card is absolutely essential. There are peope who have high scores with just one CC. But I can see several reasons to have at least a second card.

1. Accounts do keep closed for no apparent reason and with no forewarning and you want to have another one just in case.

2. You might be somewhere and try to use a card and for whatever reason it is denied. Not only can that be embarrasing but you might end up stranded in a worse case. Having a second card as a backup can relieve the fear of "what if".

There isn't a downside to having high credit limits as long as you are responsible with usage. You are correct that it can be a temptation for some to use all the CL but that's where self discipline kicks in.

You'll get different opinions and suggestions about the best way to use your card and/or cards. You'll have to figure out what works best for you. There is one approach that works for many people but it's something that really doesn't have to be adhered to closely unless you just want a hobby or you are trying to tweak your score upwards in anticipation of applying for new credit in the near future.

Have only one of your cards report a small (<9% of credit limit) balance on it's monthly statement and then PIF (Pay in Full) before the due date to avoid any finance charges. On any other cards you might have always have them report a zero balance on their statements. That doesn't mean you can't use them but time your payments so that the desired zero balance is achieved several days before the statements post.

That's just one strategy and you'll probably get others. As I said you'll need to figure out the best tactic for your situation.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

---

+1

Merry X'mas to everyine!