New MyFico Trend?? "Less is More?"

[austinguy907]

I learned awhile back that Quality over quantity is very useful when playing this game we call credit.  When you're at rock bottom though getting an approval is like a hit of crack that lasts for about 10 mins and you're onto the next app hoping for the same high.  Then you start hitting the denials but you're jonesing for another hit and keep trying to find someone to say yes.  This is where the problem starts for most that have 20+ cards in their trapper keeper.  Once I started grooming cards into higher limits I was more content and started letting some of them just auto close with time.  I'm a firm believer and preacher of poaching CLI's instead of apping for something new at this point in my credit journey.  I'm focused on growing without expanding my current lineup.  I have a couple of more cards I'm waiting on them to close down the road and then I might get down to maybe 6 open CC's from where I stand now at 10 open accounts.  Early on before 2008 I was interested in not doubling up on the same lender as well which led to some pretty rock solid CU accounts which are pretty much now not used except every 6 mo's to keep them alive for a backup in case I lose or a card is compromised somehow.  Right now there's a good chunk of change sitting there as a backup in the neighborhood of 80K between 4 accounts.  

As time goes on though some of the old "programming" starts to fade away from the whole I have to keep everything I'm approved for to it's alright if they start to fade away one by one.  I don't subscribe to most of the rewards chasing though and simply focus on a healthy round up of lenders and CL's instead.  I've seen most of the millennials around here are actually scared to open cards or even have more than 2-3 of them at most for fear of managing them and keeping up with the payment dates and such.  With time and experience with varying types of credit we have to step in and let them know if they ever plan on taking out a mortgage they need 3 cc's with at least 2 years of history on them for most lending programs outside of getting ripped off with an FHA loan where they pay MI upfront at a higher rate than private MI.  

I've noticed a couple of people here and there shying away from maxing out their exposure with CLI's as well. While it confuses me a bit why you wouldn't want your limit to be higher than it currently is maybe it's the mindset and approach I take of making a mental limit of 10% of whatever they're handing out instead of thinking I could max it out and it would take forever to get out of debt.  There are the algorithms that lenders have that when they see a rush on utilization they automatically kick in a CLD to prevent over exposure.  So, while you're escalating balances they have a stop gap for anything out of the ordinary not only for their safety but to prevent a run up on all limits and then waiting several months and putting a BK7 on them.  

I guess I just like a wide solid foundation for my pyramid to sit on.  That would be the CU cards mentioned above on each corner.  Fill in some of the steps with misc cards like Macy's, Sam's, Chase, Cap1 and at the top AX/DS.  

[Anonymous]

LOL 😂 @austin comparing cc approvals to crack! I literally imagined Pookie from New Jack City saying "come on, I just need one more!" 😂

[Revelate]

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austinguy907 wrote: 

I've noticed a couple of people here and there shying away from maxing out their exposure with CLI's as well. While it confuses me a bit why you wouldn't want your limit to be higher than it currently is maybe it's the mindset and approach I take of making a mental limit of 10% of whatever they're handing out instead of thinking I could max it out and it would take forever to get out of debt.  There are the algorithms that lenders have that when they see a rush on utilization they automatically kick in a CLD to prevent over exposure.  So, while you're escalating balances they have a stop gap for anything out of the ordinary not only for their safety but to prevent a run up on all limits and then waiting several months and putting a BK7 on them.   

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Well since I'm one that prattles on about lowering exposure, to be fair I live a pretty minimalist lifestyle: I'll still go on spending sprees and I'm not anti-materialistic, but I typically get something I need and then don't replace it for a decade or more.  Cars, TV's, about the only exception to that is computers which historically are one every threeish years (but I haven't paid for all of those myself either but I digress).

As a result, unless my financial situation detoriates and I'm heading towards a BK anyway, what "real" need do I have for even 50k in lines let alone the 150K I have now?  I just paid all my property taxes, and it came out to 6K on 150k worth of CL's on a 22K card... that's trivial utilization even from a FICO perspective, and that's big expenditure in my life, and I'm still going to write a check for it after it posts (hey might as well set the high balance).

Lenders do make a calculation on overall exposure, we know that absolutely time and again from multiple people's reports.  My limits are pretty close to 1:1 with my income currently, and at least under the current market it's really really easy to establish more limits: I have a tentative approval for that First Tech card which I only need like 5K on for incidentals though their minimum is 10K, and even with all my credit issues they still gave me the maximum 25K on that tradeline as a new customer even... FFS, why lender, and why do I need that?

Also if we do get another pull back, they'll look at CL vs. spending for everyone: a big honking limit on a low use card is just begging to get whacked and that's just how fractional reserve banking works.  I'd rather be way down the list if, or honestly, when, that occurrs again.

Really I expect I'll level off somewhere around 100k in limits, which is still way more than I rationally need.  I'd like 40K or so on my primary travel card, I can use 25K or so on my default spender (tax payments et al.), but I can sort just about everything else out on a 1-2 or at worst case 5K tradeline for those with minimums.  If I get a balance carrying card sure I want that as high as possible, but with a HELOC that doesn't make as much sense to me as it once did.

I know I'm an outlier on this forum, but really, when I take a hard and honest look at my financial life, I just don't need exorbitant limits, and after the Amex CLI's to get me to a near 10K line which springboarded everything else, I only did the one flier CLI because wtfelse am I going to use my Transunion report for anyway other than testing inquiry binning I guess since no lender I care about is going to be pulling Transunion for me.  

In a similar vein, in my most recent interview the director I'm going to be working for brought up a reason that a bunch of his techies head off to the other side of the company to manage the half billion dollars worth of server equipment (which I had a hard time not rolling my eyes and asking why the hell did they spend so much there, people are so bad with money in companies just like their personal lives but I digress), but while that was something which would've been "cool" for me 15 years ago, now, give me the organizational problems and let me go find a technical solution for them: that's what's exciting for me today, helping the rest of the group or in this case company do better.  By analogy, limits for me now, pretty darned similar: 25K approval which is my highest CL ever /shrug.

I do hope most people get to that point in their credit lives too, transactors don't need much in the way of limits and I intend to remain one for the rest of my credit using life when it comes to credit cards anyway... better ways to finance debt than a rewards card at 20% APR or worse.

[Anonymous]

I agree, less is more...I closed several cards down mainly because I was stressed out. Trying to decide which one to use to keep who happy. Then I did it. I asked myself which ones I like best and which ones I had to worry about. So this year I closed the following.

Discover $4500

Marvel $10000

Barclays Cash forward  $6000

Barclays Ring $5000

Citi Diamond $1500

Comenity Dental First $7900

The ones I will keep are in my siggy. I will be combing my Slate limit into my Freedom Unlimited just as soon as 30 days from last transaction arrives and I will be down one more.

[Anonymous]

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@austinguy907 wrote:

I learned awhile back that Quality over quantity is very useful when playing this game we call credit.  When you're at rock bottom though getting an approval is like a hit of crack that lasts for about 10 mins and you're onto the next app hoping for the same high.  

I've noticed a couple of people here and there shying away from maxing out their exposure with CLI's as well. While it confuses me a bit why you wouldn't want your limit to be higher than it currently is maybe it's the mindset and approach I take of making a mental limit of 10% of whatever they're handing out instead of thinking I could max it out and it would take forever to get out of debt.  

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For me, quality over quantity applies equally to CLs.  Cards such as Freedom max out their usefulness at $1,500 a quarter in spend.   A $20K limit isn't a whole lot of use on that card.   So I keep CLI requests on cards where I have a need for high spend (usually MS, but the same applies for real spend).    Part of this is I don't buy into utilization buffer arguments, score needs maximizing only rarely, and if you can PIF, you can pay before statement cut on those situations.  (And if you can't PIF, focus more on that than on getting CLIs!)

[Anonymous]

I just closed all my store cards but Amazon and Overstock. I'm of the less is more now as well. It's too hard to gain history with so many. It's a PITA to remember to use each one.

I have 5 cards I use regularly.... and 2 store cards. I really don't want any more but if one came out where the into bonus was good or the card itself was unique or too good to pass up I would go for it... but I really love my Discover and USBank Cash+ so it would take a lot to make me not use those as my 2 daily cards.

[AverageJoesCredit]

More is less and less is more.....

Meesa likea this....

Gonna be my motta for 2017

[kuku4koco]

I believe 'Less is More'... when I first came to Myfico... I was extremely uneducated.  Having filed for BK in 2010, I didn't think I would ever be elgible for credit again.  So I didn't have any.  At most, I thought I would have to wait 10 years.  Once I started reading here... I became very excited, started apping/doing sct and ended up with more cards than I even needed/probably would use.  After two years of educating myself, I've decided (for myself) that I only NEED about 5 cards.  I have 16.  I use 10 regularly.  So, I still have work to do. Only now in the other direction....  (Quality vs. Quantity).

I think the main thing to remember is, you can/should only have/use what your income will support.  That doesn't mean high income should necessarily have a sh*t ton of cards/high CL... nor does that mean low incomes can't have ANY.  It just means to live within your means...  People lose their jobs everyday, the recession was a complete nightmare and could very well happen again.  I think there are two camps of thought here on Myfico... it's either 1.  Get whatever and all you can (i.e. "There's still money on the table!! Go get it!!") or 2.  Learn from your/others' mistakes on how to be responsible in obtaining and using credit.

I don't understand the CLI chasers... I just don't get the point of that at all.  Yes, I get that no one wants to have 'toy limits' those cards are incredibly hard to use, utilization concerns, etc.  But, the desire to have exessively high CL's or CLI chasing... I don't get.  Yeah ok, it's all relative and everybody's needs vary, but I've seen more than a few on here that do it 'just because they can'.  Bragging rights?  Ego?  It can be a dangerous game to play for newbies and youngsters just starting out in the world of credit.  This forum can be very persuasive and influential... Peer pressure exists no matter the age, economic background, etc.  This forum (in and of itself) can be like crack!   Be careful!!!

I've learned to take the good and the bad with a grain of salt... everyone's profile and credit needs vary.  This forum can be/is very beneficial when used as a tool to LEARN how to improve/make your credit work for you.

Best wishes to all in the coming New Year!!

[Anonymous]

I think the goal of most should be to be able to put everything on credit-
1)to get rewarded on most all spending.
2)Maximize your rewards with as much simplicity as possible.. Have cards that offer more for your bigger spending categories.. smaller categories eventuallt arent worth its own card
3)Be able to spend as much as you typically would on any given card and overall have Util at under 10%
4)Have some sense of padding/back up to keep file thick enough to be able to absorb change without majorly impacting credit.

Everyone will differ in their personal needs to do this. $2500 credit between 2 cards might be sufficient for one person, while another needs 20 cards with $250k total credit to accomplish the same goal.

[Anonymous]

For me, for example- Im just about where I need to be. I'd like to get my Costco card's CL a bit higher (at 5k now) in order to utiluze the travel rewards for a big trip while still keeping util under 10% on that card.. most the rest are sufficient- some higher than needed (BCE @ 23.3k for example).