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Newbie questions: Why so many cards?

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Senior Contributor

Re: Newbie questions: Why so many cards?


@Courtyj725 wrote:

Is there something I am not understanding about credit cards?

 


It sounds like you just need to read up on credit in general.  If you understand the various factors on how your scores are determined then you'll realize that number of credit cards really doesn't mean much in and of itself.  It all boils down to the usual suspects: utilization, average age of accounts, on time payments, derogatory information and so on.

 

Some people have a number of cards because closing card accounts would adversely affect their utilization and AAoA.  I have the carsd that I have because they all offer different benefits.  Don't fixate too much on number of cards.  As long as you're not opening too many new accounts to adversely impact your AAoA and number of inquiries and can manage them properly it really doesn't matter.

 


@Courtyj725 wrote:

This will put my total UTIL at about 36%. (this does not include student loans, only lines of credit as I was told istudent loans dont count towards util).

 

1. Will that be enough after waiting for my score to rise to app for cards?

 


I'd aim for lower utilization.  30% is what's usually recommended but less is better as long as you're above 0.

 


@Courtyj725 wrote:

2. Am I looking for any rise in my score or a particular score?

 


Depends on who you're applying with and what bureau(s) they use.

 


@HiLine wrote:

50% on each card is better than 0% on one and 80% on the other.


How so?  Clarify "better" -- it doesn't really mean much on its own.  If the OP wants to minimize interest payments it won't be better.

Message 11 of 32
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Super Contributor

Re: Newbie questions: Why so many cards?

In my estimation, the number of cards one has should be predicated on the current credit environment, credit health, and personal needs.

 

The last several years have been the "golden" age of sign-up rewards; once this passes, we'll likely never seen them at these levels again.  Under these conditions, it makes sense to leverage a good credit score to derive the most benefit from these offers while they last.  Sign up for 10 cards resulting in $10K worth of tax free travel.

 

Another reason would be credit diversification, higher aggregate limits, and increased AAOA for future needs.  

Message 12 of 32
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Senior Contributor

Re: Newbie questions: Why so many cards?


@Courtyj725 wrote:

Thanks to all for replying thus far and the helpful info!

 

So... I'd like additional advice then.

 

I have 2 high balance cards:

 

Barclay Visa = CL 1700/Current balance = $1500/APR = 20.24% from 22.99% (called & they lowered it yesterda 6/18/13y! see my post: Backdoor - Barclay APR success! )

Cap One Mastercard = CL 2000/Current balance = $1655/APR = 16.90% (calling today to ask for lowered APR)  

 

Barclay is getting payed down completely by July 1 the latest.

Cap One will likely get paid down by about 250 - 300 making my balance $1355.

 

This will put my total UTIL at about 36%. (this does not include student loans, only lines of credit as I was told istudent loans dont count towards util).

 

1. Will that be enough after waiting for my score to rise to app for cards?

 

2. Am I looking for any rise in my score or a particular score?

(please see scores in my sginature below)

 

3. Should I then app for 2 or 3 cards on the same day?

 

Backstory:

 

My 1st credit card was opened 6 years ago this month.

My most recent was April of last year.

My student loans opended April of last year as well, leaving my AAOA at 1year.

I have 2 inquiries on my account both from May 1, 2013.

I was denied for both inquiries. The denials led me to begin loggin on to myfico and building my credit and rmeoving anything from my account that was wrong.

 

 

Thanks again!

 


IMO, when you are paying high CC interest( over 5%), you should only  be concerned with paying off that debt,  because it is very expensive.  Best to pay the highest rate card off first, then pay the next one off.    This saves you the most money 2 ways, Interest accrual is less,  and you can use the grace periond on first card for your monthly expenses withou interest after it is paid off. 

 

I suggest you wait until you are paying in full each month on all your CC and then consider applying for your next card.      

Message 13 of 32
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Established Member

Re: Newbie questions: Why so many cards?

Great info Open123, appreciated.

 

I do want to diversify my credit and have cards with better options and perks as well as an increased CL but I can be impatient sometimes and keep revisiting the idea of apping so soon because of all of these posters who have cards and perks.

 

I'm leaning more towards safe behavior and proper credit management than I am perks at this stage so I'm just gathering as much information on the whys and hows at this point. I do want to take note of the "golden age" you mentioned though. Currently my AAOAis screwed by my student loan and latest credit card so it seems applying this year wouldn't do much further damage to my AAOA than is already done.

 

I'll look into it after I've paid down to 9% or less as many like codimom has suggested and then revisit.

Hopefully this is feasible by the fall.

 

You've been very helpful. Thanks.

 

 

Wallet: JetBlue Plus Barclay MasterCard - $3000/ Cap One Quicksilver - $2500 / Citi Diamond Preferred - $2000 / Chase Slate - $2000 / Barclaycard Rewards Visa - $1900 / Discover It - $1900 / Target - $2100 / Macy's - $2100 / Victoria Secret - $950

Starting Score 6/17/13: EQ:651 EX:640
Current Score: TU:685 5/5/16 EXP: n/a 5/5/16
Goal Score: 750
Message 14 of 32
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Frequent Contributor

Re: Newbie questions: Why so many cards?

Utilization is my only reason.  If I need to make a big purchase, such as replacing my iMac soon, I don't want it to effect my utlization too much.

My Wallet:
AMEX Platinum | Discover It $20.3k | Chase Sapphire Reserved $16k | Chase United $12k | AMEX SimplyCash Plus Business $11.6k | AMEX Schwab $9k | AMEX BCEP $8.2k | Citi Costco Anywhere Visa $8k | Chase Amazon Visa $8k | Chase Sapphire Preferred $7k | Chase Freedom $5k | Citi Simplicity $5k | Paypal Extras Platinum $5k | Wells Fargo $5k | Citi Best Buy $4.2k | Citi Visa Signature $3k | Care Credit $3k
Message 15 of 32
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Established Member

Re: Newbie questions: Why so many cards?

Thanks Wolf3, very conservative take on it which I think is smart when working diligently to rebuild credit.

 

Like codimom, your opinion is more what I want to be and want to do .. but less than what I seem to have patience for. lol.

 

I have to make a safe choice though.

Currently I'm pacing myself and just gathering information, ideas, facts and thoughts from everyone.

 

I appreciate your input.

Wallet: JetBlue Plus Barclay MasterCard - $3000/ Cap One Quicksilver - $2500 / Citi Diamond Preferred - $2000 / Chase Slate - $2000 / Barclaycard Rewards Visa - $1900 / Discover It - $1900 / Target - $2100 / Macy's - $2100 / Victoria Secret - $950

Starting Score 6/17/13: EQ:651 EX:640
Current Score: TU:685 5/5/16 EXP: n/a 5/5/16
Goal Score: 750
Message 16 of 32
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Established Member

Re: Newbie questions: Why so many cards?

Interesting boomhower!

 

Thanks for your take on it.

I am going to attack my utilization with my current balances first by paying off. Then once that reports, I'll revisit diversity in cards and raising utilization with 1 or 2 good cards. That will put me at 3-4 which still isn't the lucky number 5 but maybe I can do a store card or two?

 

We'll see. Not many stores I constantly shop at other than Target. Don't recall if they have a reporting CC.

 

 

Wallet: JetBlue Plus Barclay MasterCard - $3000/ Cap One Quicksilver - $2500 / Citi Diamond Preferred - $2000 / Chase Slate - $2000 / Barclaycard Rewards Visa - $1900 / Discover It - $1900 / Target - $2100 / Macy's - $2100 / Victoria Secret - $950

Starting Score 6/17/13: EQ:651 EX:640
Current Score: TU:685 5/5/16 EXP: n/a 5/5/16
Goal Score: 750
Message 17 of 32
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Blogger

Re: Newbie questions: Why so many cards?


@takeshi74 wrote:


@HiLine wrote:

50% on each card is better than 0% on one and 80% on the other.


How so?  Clarify "better" -- it doesn't really mean much on its own.  If the OP wants to minimize interest payments it won't be better.


You may want to re-read the post to see what the poster is asking. Smiley Happy

Message 18 of 32
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Established Member

Re: Newbie questions: Why so many cards?

Fairy credit (codi) god mom!

 

You are right and I know it. lol.

 

I just like to gather all the information and ask as many questions so I can understand why I need to do one thing while others do another.

I absolutely still intend to take your advice. Smiley Happy

 

 

 

p.s. fairy credit mom... whats drapping?

 

Smiley Happy

Wallet: JetBlue Plus Barclay MasterCard - $3000/ Cap One Quicksilver - $2500 / Citi Diamond Preferred - $2000 / Chase Slate - $2000 / Barclaycard Rewards Visa - $1900 / Discover It - $1900 / Target - $2100 / Macy's - $2100 / Victoria Secret - $950

Starting Score 6/17/13: EQ:651 EX:640
Current Score: TU:685 5/5/16 EXP: n/a 5/5/16
Goal Score: 750
Message 19 of 32
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Blogger

Re: Newbie questions: Why so many cards?


@Wolf3 wrote:

@Courtyj725 wrote:

Thanks to all for replying thus far and the helpful info!

 

So... I'd like additional advice then.

 

I have 2 high balance cards:

 

Barclay Visa = CL 1700/Current balance = $1500/APR = 20.24% from 22.99% (called & they lowered it yesterda 6/18/13y! see my post: Backdoor - Barclay APR success! )

Cap One Mastercard = CL 2000/Current balance = $1655/APR = 16.90% (calling today to ask for lowered APR)  

 

Barclay is getting payed down completely by July 1 the latest.

Cap One will likely get paid down by about 250 - 300 making my balance $1355.

 

This will put my total UTIL at about 36%. (this does not include student loans, only lines of credit as I was told istudent loans dont count towards util).

 

1. Will that be enough after waiting for my score to rise to app for cards?

 

2. Am I looking for any rise in my score or a particular score?

(please see scores in my sginature below)

 

3. Should I then app for 2 or 3 cards on the same day?

 

Backstory:

 

My 1st credit card was opened 6 years ago this month.

My most recent was April of last year.

My student loans opended April of last year as well, leaving my AAOA at 1year.

I have 2 inquiries on my account both from May 1, 2013.

I was denied for both inquiries. The denials led me to begin loggin on to myfico and building my credit and rmeoving anything from my account that was wrong.

 

 

Thanks again!

 


IMO, when you are paying high CC interest( over 5%), you should only  be concerned with paying off that debt,  because it is very expensive.  Best to pay the highest rate card off first, then pay the next one off.    This saves you the most money 2 ways, Interest accrual is less,  and you can use the grace periond on first card for your monthly expenses withou interest after it is paid off. 

 

I suggest you wait until you are paying in full each month on all your CC and then consider applying for your next card.      


Another solution is to pay the utilization down to the level where a credit card with an introductory 0% period can be obtained, though honestly if the OP has the means he should simply pay off the debt. The amount owed is not that big.

Message 20 of 32
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