How many credit cards should I own?

[Anonymous]

I currently have 2 and 1 application pending.

Bank of America Secured Credit Card: $300 CL

Best Buy Rewards Zone Mastercard: $500 CL

Capital One Student Credit Card: ?????

What should my credit utilization be? In $$ figures...

[laz98]

you should only own as many as you feel you can handle comfortably.  i manage my 8 cards as well as my gf's 8 cards.  it's a personal choice.

just because your limits are low doesn't mean you can only buy a bag of peanuts.  you can charge as much as you want throughout the month, IF YOU KNOW when your statement will be cut.  pay your balances off (or down) before that date, & then you are in control of what UTIL is reported.

just remember some companies are crazy about how many payments you can make in a month, so i wouldn't try to pay it off every day or every charge.  maybe every week or so, you know?  depends on your spending habits.

[Anonymous]

Thanks,

I'm not trying to get them so that I can charge up a storm, I want to buy a car. I NEED to buy a car and I have a very very very very limited credit history. Moreseo, I need cc's to earn trust of lenders. I read that having a low credit limit counds against you bc lenders will think you don't have enough experience with high limits?

[laz98]

no one is saying you have to charge up a storm; but a lot of people don't understand that they are not super limited by their low limit cards.

sometimes lenders are reluctant to give you a higher limit when all you have is lower limits.  the only thing that you can really do about that is manage your cards responsibly, regardless of how much you are spending on them, & let time go by.  if you have a very short credit history, sometimes it's hard to find lenders that are willing to work with you or give you the best rates.

[Anonymous]

For the purpose of optimizing score, you need to keep utilization at 9% or under, so for a 800 total credit limit, you can only let $72 balance post in your monthly statement. This doesn't mean that you can only use that much every month. You can always pay down the balance you use during the month, and leave a little to post to your statement (double check to see if your bank lets you pay more than once a month, most do).

This is what I do for my cards. Suppose that my card has a limit of 500, and I used 400 in the past month, and that the card produces its statement on the 12th. I subtract 3 days (or however long it takes to process your payment). The latest I can pay down the balance would be the 9th. On the 9th, I'd pay the bulk of the 400, leaving maybe 20 dollars on the statement. On the 12th, the card statement would come out showing only 20 dollars balance (4% utilization). Pay the 20 dollars before the due date, and you're golden. You're showing responsible use of credit on your report (from the 4% utility). It's not hard, just tedious at best. I started with very low credit limit too when i rebuilt, and just got used to paying more than once a month for the past 3 years.

I hope what I wrote makes sense. Feel free to correct it, if you catch any mistakes.

[haulingthescoreup]

I would keep it at three cards for now, and let them build up a string of months of clean payment. If you try to get more now, in hopes of building more history, you're actually going to put yourself in a (temporarily) weaker position, because it will look like you're out there shaking the money tree a bit too hard.

How old is your oldest account? Do you know your average age of accounts?

Sometimes you just have to be patient and let more history accumulate, and that's just a function of time. Having a lot more too-new history won't help.

Three cards are all you need for maximum scoring, if you don't have negatives that you're trying to "dilute." If you stop with these three now, and let them accumulate a good track record, you can gradually add a couple more over time, as your credit profile improves and you qualify for cards with more rewards, etc.

It's kind of a PITA to have a bunch of cards. Trying to keep adequate usage on all of them to keep them "happy" can take up way too much time and attention.

[MarineVietVet]

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@haulingthescoreup wrote:

I would keep it at three cards for now, and let them build up a string of months of clean payment. If you try to get more now, in hopes of building more history, you're actually going to put yourself in a (temporarily) weaker position, because it will look like you're out there shaking the money tree a bit too hard.

How old is your oldest account? Do you know your average age of accounts?

Sometimes you just have to be patient and let more history accumulate, and that's just a function of time. Having a lot more too-new history won't help.

Three cards are all you need for maximum scoring, if you don't have negatives that you're trying to "dilute." If you stop with these three now, and let them accumulate a good track record, you can gradually add a couple more over time, as your credit profile improves and you qualify for cards with more rewards, etc.

It's kind of a PITA to have a bunch of cards. Trying to keep adequate usage on all of them to keep them "happy" can take up way too much time and attention.

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I agree. Three cards is plenty for now.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772

You can do the same thing with hard work

[fused]

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@haulingthescoreup wrote:

I would keep it at three cards for now, and let them build up a string of months of clean payment. If you try to get more now, in hopes of building more history, you're actually going to put yourself in a (temporarily) weaker position, because it will look like you're out there shaking the money tree a bit too hard.

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I also agree.

[Anonymous]

My oldest account age is 8.2; average age of accounts is 5.0 (EX), 4.4 (EQ),  5.0 (TU). Not sure if that is good or bad? I guess you should take into consideration my age: 26.

[Anonymous]

IMO,   Increasing your deposit and CL on the BofA secured card would be a good strategy.  You don't need more than 3 cards.