Reducing credit cards, a new adventure

[Anonymous]

Anyone think we should call the act of chopping all of these old seeds and plants to trim back our useful crop as "composting" credit?

Johnny50: Holy Chase Freedom!  Did you get that with CLI requests or by reallocating other cards from Chase?  Can I ask what your reported income is with lenders (or range at least)?

[MrDisco99]

I can already see this in my future as well. I plan to do some trimming next year of AF cards and more after that when I get the limits on my main cards where I want them. It’s nice to be in a spot where I no longer worry about utilization but having to login to 7 different apps is a hassle.

[odd_dog]

Congrats Joey this is great news! You know I am an advocate of closing lines you do not use/need. To me the "sock drawer mentality" may be great for some but certainly not all. I would rather have 4 cards with generous limits than 30 plus just to "pad my utilization". I have closed so many in the past year, it is getting hard now to thin the herd. Some I do keep solely for status with airlines and hotels I constantly use, but do not put much spend on, because I get the points from actually traveling. The other reason I close accounts is the whole fraud thing, less time looking over cards I do not use to make sure they are not compromised is a HUGE plus...if you are not using it don't keep it....I guess I can say that easily as my exposure is over $300K and really I DO NOT NEED THAT, I certainly do not keep balances on cards so utilization is not an issue with me....GOOD luck and it is always encouraging to me to hear people closing unused lines and cards! It makes me want to look through my stash and close a few myself, so thanks for the push!!!

[kdm31091]

I don’t see why someone would need to SD some 20 odd accounts they don’t intend on using. I think 3 to 5 cards are perfectly fine and plenty for the average person. I understand the SD argument but short of some type of apocalypse you don’t need 20 backup accounts. Most consumers have one to three cards and get through life just fine.

I personally feel uncomfortable monitoring more than 5-6 accounts at the most but it’s a preference and everyone should do what works for them.

[Anonymous]

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@kdm31091 wrote:
I don’t see why someone would need to SD some 20 odd accounts they don’t intend on using. I think 3 to 5 cards are perfectly fine and plenty for the average person. I understand the SD argument but short of some type of apocalypse you don’t need 20 backup accounts. Most consumers have one to three cards and get through life just fine.

I personally feel uncomfortable monitoring more than 5-6 accounts at the most but it’s a preference and everyone should do what works for them.

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It's a mental anguish pre-anxiety thing common in consumers who have experienced traumatic financial destruction in the past.

• They once had no available credit and needed it so they covet what they have in case a traumatic financial event happens again
• They "worked hard" to rebuild after having thrown it away once before
• There's gamification in social network when it comes to overall credit exposure -- as if a person with $1 million in credit limits is "the big winner".  Gamification is really important in promoting consumer luxury spend as well.
• There's a sense of accomplishment in credit limits more than in savings account balance -- driven by the high advertising/promotion of credit card commercials with beautiful actors and not a single commercial with a bikini model promoting 1.3% APR on savings, which is boring.
• There's usually a FOMO (Fear Of Missing Out) that the card that gives some ridiculously limiting perks might be useful in the future (it never is).

[UpperNwGuy]

So far this year I have gotten rid of 5 store cards and 3 bank cards, reducing my overall credit limit by about $40,000 and my number of cards from 15 to 7.  I think it is better to have a handful of high quality cards than a sock drawer full of cards that are rarely used.

[longtimelurker]

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@Anonymous wrote:

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@kdm31091 wrote:
I don’t see why someone would need to SD some 20 odd accounts they don’t intend on using. I think 3 to 5 cards are perfectly fine and plenty for the average person. I understand the SD argument but short of some type of apocalypse you don’t need 20 backup accounts. Most consumers have one to three cards and get through life just fine.

I personally feel uncomfortable monitoring more than 5-6 accounts at the most but it’s a preference and everyone should do what works for them.

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It's a mental anguish pre-anxiety thing common in consumers who have experienced traumatic financial destruction in the past.

• They once had no available credit and needed it so they covet what they have in case a traumatic financial event happens again
• They "worked hard" to rebuild after having thrown it away once before
• There's gamification in social network when it comes to overall credit exposure -- as if a person with $1 million in credit limits is "the big winner".  Gamification is really important in promoting consumer luxury spend as well.
• There's a sense of accomplishment in credit limits more than in savings account balance -- driven by the high advertising/promotion of credit card commercials with beautiful actors and not a single commercial with a bikini model promoting 1.3% APR on savings, which is boring.
• There's usually a FOMO (Fear Of Missing Out) that the card that gives some ridiculously limiting perks might be useful in the future (it never is).

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Good points.   I think one of the unfortunate things about a site like this for rebuilders is the positive feedback when someone gets a new card or a CLI.   Yes, it's nice that they got what they wanted, but whether it is a wise thing to do is a different question.

[Anonymous]

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@longtimelurker wrote:

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Good points.   I think one of the unfortunate things about a site like this for rebuilders is the positive feedback when someone gets a new card or a CLI.   Yes, it's nice that they got what they wanted, but whether it is a wise thing to do is a different question.

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I work with so many people in real life and on Facebook every day who are rebuilding from catastrophe that I see it constantly.  CONSTANTLY.

This is why my goals in mentoring others have nothing to do with credit limits or cards, per se.  My focus is always "build savings even if it costs you interest elsewhere" as #1.  If someone stops increasing savings even one month when I'm mentoring them, I fire them immediately.

#2 is "make a goal of earning useful rewards or cashback"

#3 is "never pay interest again after your goal date"

Nothing to do with credit limits anywhere.  I also tell people who do need rebuilder credit to set a goal date or goal post of when and why they will close those rebuilders.  "I will get the QS1 with AF but only until I am approved for a 1.5% card with no fee" that sort of deal.

Credit limits keep people in a "consumer" mindset.  I don't promote that because I promote wealth, not consumption.  I grind my teeth frequently on credit forums of any kind, but then again, consumers exist to enrich people with wealth-perspectives.

[Anonymous]

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@Anonymous wrote:
Good point. I closed my Discover It account a year ago with a $3500 CL. Never got love. Last month applied for Discover Miles and instantly approved for $20000.

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What the h***! This I will never understand? Great approval and CL. You are certainly living the credit world right!!!

[Anonymous]

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@Anonymous wrote:

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What the h***! This I will never understand? Great approval and CL. You are certainly living the credit world right!!!

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Discover uses investment ABS systems to finance credit card debt -- and those systems incorporate tranches so you can get locked into a low score tranch with your card.  Closing a card and opening a new one when your scores are better is the best way to move from a subprime tranch to a prime one.

See my post here about Capital One, but Discover is the same: http://ficoforums.myfico.com/t5/General-Credit-Topics/Credit-Card-Asset-Backed-Securities-ABS-and-why-some-subprime/td-p/5083619