New Amex PRG and closing cards

[Anonymous]

Sorry for this long wall of text for a simple question. Thanks in advance for reading. 

So I recently applied for the PRG and to my surprise was approved. My wife and I did a couple BT to some cards in her name so my report shows 0% util until a recent furniture purchase hits. Now we're aggressively paying off all previous debt. 

A lot of this debt comes from all the cards that I have opened expecting to get all these points and then racking up too high of a balance. So I stopped and don't use cards anymore. But recently I got to thinking and figured the PRG would be good because there's "almost" no way I can get into debt with a charge card and we get a lot of perks plus the protection of using a "credit" card instead of a debit card. Plus I want to use the points for a hotel for an upcoming trip and we travel a lot to begin with. Anyway since I got this card and I plan on my wife and I putting all of our spending on it I didn't see the need for our other cards. Plus I'm worried having all those cards will affect us buying our second home in about 2 years. 

So my question is how much will I screw my self by closing basically all my cards? Also how does closing my cards affect me when we apply for a home loan? I did close some a few days ago but stopped myself. From what I understand my AAoA should be affected but only when those accounts start to drop off from my report. 

My plan was to close everything except for my oldest card which is my CU cards and so I'd only have PRG and CU card. Would that look bad when I apply for a mortgage? And will it tank my score?

I understand my utilization will get screwed over because I have some furniture I bought but that's the only balance the both of us will be carrying going into applying and it's only in my name. I'm open to keeping the Disney and Discover because I'd have one of each of the 4(amex, disc, visa, MC) but the Disney does have a $50 AF and I don't plan on using it. Even though we go to very very Disney frequently on both coasts. 

And my wife would keep her Discover and maybe her Amex but I'm thinking she should keep the Citi and Discover. Should she just keep them all open since there are no AFs? 

So the cards I have now are:

Open

SSFCU $5k 8+yrs

Discover $1800 almost 4 years

Chase Disney $6700 about 2 months old

Ashley Furniture Synchrony $4500 1 month old with about $2k balance interest for 6 years

Closed 

Jcrew $7560 7+yrs

HD $5200 3.5yrs

Best Buy $1850 3.5 yrs

Zales $1200 3 yrs 

Ann Taylor $400 2.5yrs 

My wifes cards are  

Amex everyday $5k

Discover $5k

citi diamond preferred $9800

Also we have a mortage at about 4 years old and 2 car loans with 3 years left on them. 

I also want to make the most of the PRG and am wondering if the airline fee credit would apply to purchasing wifi. My wife works for southwest and we fly nonrev so our only expense are wifi if we need it. Sometimes I'll buy a drink but mentioning she's an employee 99% of the times gets me a free beer. Are either of these covered by the credit if we were to purchase them??

[NRB525]

The AMEX Airline fee credit is for extras (not tickets or seats) you pay to one Airline. In-flight Wi-Fi is paid to GoGo, not the airline. So in my experience, no, the AMEX fee credit would not work for in-flight wifi.

If your mortgage is in two years, don't close any more cards. You already did well with closing a bunch of store cards. Just leave the rest open, use them for only charges you can pay on the regular statement cycle, and let these cards help build your payment history.

I would never suggest transferring MR points to a hotel program. None of the available hotels as transfer partners from MR are a good use of those points. Airlines, even Delta SkyPesos, are a better use of MR points.

You just opened the Disney card. If the first year AF is not paid yet, then don't close ahead of that AF. Also, are the perks at the Disney properties something that goes with the card? Give it a chance to show you the value. Don't rush to close or open cards, now or ever. Think through all the aspects.

For now, just use the cards you have. Pay down debt. You will be in better shape financially in two years.

[Anonymous]

You can use pay over time feature with PRG so yes you can still rack up debt.  Also, PRG points are not the best for booking hotels.  Probably if you have issues with credit just cancel everything but your oldest card.  You have a mortgage and 2 new cars if you have trouble controlling spending best is to go credit card free.  You don't need a high credit score anyway. 

[UpperNwGuy]

So what I think most of us are saying is that there is nothing wrong with your strategy of keeping your oldest card and one other card that you find to be more useful.  However, we don't believe that Amex PRG is the best card for this strategy.

[K-in-Boston]

If you are planning a mortgage in 2 years, I would probably do as little as possible to change either of your current card lineups.  I would keep your current cards open but only use them once every 3-6 months if you plan to use the PRG as your daily driver.  For travel, the Platinum card is generally a significantly better card ; you may want to consider an upgrade when your PRG turns a year old if your spend and travel makes sense.

For better FICO scores when it comes time to apply for that next mortgage, you'll each want at least 3 revolving (note PRG is a charge card) credit cards with less than 50% showing a balance on your reports.  For the best results, you'd want to emply the AZEO method (all zero except one card under 8.9% utilization) before beginning the mortgage process.

IME Southwest tickets often trigger the credit because of the smaller price tag often associated with them.  Wifi would not trigger it, but in-flight meals and drinks would.  Gift certificates can also trigger the credit; you would want to visit the FT thread on that for details.

I agree with @NRB525 on every detail except for the hotel part.  With my Platinum card I've been able to get back huge percentages of the spend on airline purchases and Amex Offers when transferred to Marriott (via SPG), although it does take effort and timing to get those kind of redemptions.  Generally speaking, though, you would do better with a hotel's cobranded card if that is your primary earning currency.

[Anonymous]

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@NRB525 wrote:

The AMEX Airline fee credit is for extras (not tickets or seats) you pay to one Airline. In-flight Wi-Fi is paid to GoGo, not the airline. So in my experience, no, the AMEX fee credit would not work for in-flight wifi.

If your mortgage is in two years, don't close any more cards. You already did well with closing a bunch of store cards. Just leave the rest open, use them for only charges you can pay on the regular statement cycle, and let these cards help build your payment history.

I would never suggest transferring MR points to a hotel program. None of the available hotels as transfer partners from MR are a good use of those points. Airlines, even Delta SkyPesos, are a better use of MR points.

You just opened the Disney card. If the first year AF is not paid yet, then don't close ahead of that AF. Also, are the perks at the Disney properties something that goes with the card? Give it a chance to show you the value. Don't rush to close or open cards, now or ever. Think through all the aspects.

For now, just use the cards you have. Pay down debt. You will be in better shape financially in two years.

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The only way I saw to get any value of hotels from MR points was last year when they had the 20 percent bonus for Transfers to British Airlines. I was able to transfer to BA and got 1.1 cent value per MR Point booking a hotel through British Airways travel portal.  But without the transfer bonus even that would be a terrible option. 

[Anonymous]

Thanks for the reply. I guess I’ll keep the cards I have now and see what I can do with the Disney card when it comes to the AF next year. I only applied for the card because we got 200 back.

I may not have made it clear but I fly for free already so I only really need points to stay places. Even flying internationally I’d only pay taxes. We use Airbnb and travel at least 4 times a year so it’d be nice to stay somewhere nicer one of the trips. Plus all the other benefits make me feel better while I’m traveling.

@frogman1 I learned about that feature last night and never plan on using it. This card in my head is a debit card with credit card features. I plan on paying the bill weekly.