@folks19 wrote:@Anonymous why not? ... I won't get shut down because I will use the cards every month.
Keep in mind that shutdowns don't occur only due to non-use. The current credit limit decreases or account closures are due to banks limiting their risk with customers who are seen as higher risk as economic conditons tighten up with the pandemic. If you acquire a lot of cards with limits many times your documented income, you could also be subject to adverse action, especially if you ever allow balances to post on multiple cards. In today's climate however, it could happen just based on your overall credit profile including income, debts, credit score, any derogatories, revolving credit available, etc. Underwriters look at a lot of factors when they make these decisions. Using the card may help but it's not enough in all cases to prevent shutdown. It may not matter if you use the account or pay on time or in full.
@folks19 wrote:@Anonymous why not? If I make over 500$ - 3000$ a month at 10 different stores for my business, why is it a bad idea if those store cards offer great reward? We're talking about 5000 - 30000 in total... I won't get shut down because I will use the cards every month. As for the limits, whatever I get is better then 0...
Could you further elaborate on this? I'm not sure if you meant that you would be making $500-3000 per month between collecting rewards or discounts, or if you mean that you're making $500-3000 per month in profit for reselling products purchased at these stores. If that's money gained back in rewards and/or through savings, that is significant. If it's just a matter of buying power at these stores and you're making that in profit, you would probably want to examine each store for potentially higher rewards with a more traditional bankcard.
Not all store cards are created equally. There are many cards that offer little incentive to use them after an initial purchase, sometimes as little as 10% off or $10 off your first purchase, so just a single bankcard offering a $500 signup bonus can bring greater rewards than dozens of store cards combined. Even some very popular and widely useful store cards offer nothing in the way of rewards, but rather extended promotional APR periods - the Home Depot card is a good example of this. A gas card would be an example of where a traditional bankcard would likely be a better option - using $3/gallon and a 12 gallon tank as an example, 5 cents off per gallon offered by many gas cards would save you $0.60, while one of many cards offering 3% cash back on fuel would give you $1.08 in cash back - certainly not worth opening a fuel card for lower rewards, and any 2% card in this example would still earn more than the gas card.
A majority of store cards are issued by just three lenders: Synchrony, Comenity, and CBNA. All will be sensitive to a large number of cards opened in a short period of time. Regardless of how much they are being used, Synchrony and Comenity both have track records of closing accounts when they deem your risk to be high, and this happens quite often after a number of store cards are opened with them.
There is nothing wrong with acquiring store cards if they benefit you. But acquiring many of them in a short period of time and from the same lender is a recipe for credit disaster, particularly if one does not have a very well-aged and thick profile that can absorb those hits.
Other than a credit union here or there, members of this community have never really reported issues with overall available credit. Certainly individual lenders have their limits on how much they will extend to an individual borrower, but many of us here have multiples of our incomes in available revolving credit. That has not not prevented being granted additional credit on my end.
