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I currently have:
Discover IT (Graduated) $1000
Capital One Quicksilver (Graduated) $1300
Navy Federal (Secured) $500
I have about $5K I was thinking of putting into secured cards to reduce my utilization.
Should I get one secured card at $5K, two cards at $2500, or three at $1.666.66? Will it help much?
I suggest using the $5k to pay off some outstanding balances. I would not want to go into more debt (not saying you will) and reduce your AAOA at the same time. Consider using the AZEO method (All Zero Except One)—you can find more about this method here; https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/ABCD2199-s-Eleven-Rules-to-Credit-Rebuilding...
What does your profile look like, by the way?
@Anonymous wrote:I suggest using the $5k to pay off some outstanding balances. I would not want to go into more debt (not saying you will) and reduce your AAOA at the same time. What does your profile look like?
I pay my balances in full once or sometimes even twice a month. With such low limits its still easy to have high utilization.
Still, though, I don't think that geting more secured cards is neccesary. You already have a great card line-up, so it makes sense, at least to me, to continue with what you have and save the $5k for something unexpected. Just my 2 cents.
Besides, as your scores start to improve, you can ask for a credit line increase.
But putting the money on a new secured card is still "saving" it right? Not spending it! PLUS it will raise my score?
In that case, go for it! It's saving, to me, because when the card unsecures, you get your money back.
I recommed the Bank of America secured card.
I would also have to echo that with three unsecured cards, none of which are subprime lenders, it likely wouldn't do much good for you and may in fact hinder your ability to grow your current credit lines due to the presence of new account(s) and a reduction in your average account age. Putting that $5k into something interest bearing (even a NFCU checking account) that you use to make multiple payments to keep your utilization in check throughout the month would be a better solution. Putting spend through the accounts will show your lenders that you need a higher credit line and you won't have that $5,000 tied up and not accruing interest for months or longer.
If you really have your heart set on opening a secured account, though, I would suggest putting all $5,000 into a single account, preferably from a lender where it will unsecure and grow like a card that began unsecured in the future like Bank of America.
Well said!