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What's the advantage of having many CC?

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Moderator Emerita

Re: What's the advantage of having many CC?


@Cloudlb wrote:

I am rebuilding, and I have two credit cards now, a $500 mastercard from my CU and a Discover cash back one with 4,000 cl.  That's a victory for me.   I pay in full every month, although I'm planning to use my Discover for a big-ish purchase (for which I will pay off during the interest-free period).

 

Does having a 3d one really matter that much?  I wouldn't mind having a VISA for diversification . . . 


It's up to you. But I would advise waiting until whatever negatives you have are farther in your past, and these two cards have more age.

 

Two cards are all you need for rebuilding, and I should have mentioned that up above. Trying to get more while rebuilding often results in just getting a collection of eh cards with eh CL's (although that $4K CL on your Discover is very nice indeed!)

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 21 of 38
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Moderator Emerita

Re: What's the advantage of having many CC?


@Peach8321 wrote:

so would it be advantagous to have say - a MC, AMEX, Visa, Discover group all from different banks so that if one bank got upset, you could depend on the others?  Or do y'all have multiple MC, Visa ,etc rather than a spread of different types?

 

How many cards actually get carried around every day?  Or do you take the one with the reward you want (ie, getting gas? get the gas CC)


I don't think you need one from each card network, although it occasionally seems to be a minor sport around here to do so. IMO, it's more important to have cards from more than one (or two) banks, and from at least two different card networks.

 

Don't know about others, but I carry 4 cards with me --PenFed for gas, Blue Cash Preferred for groceries, either my Chase Freedom or my BofA card for whatever the quarterly bonuses are at any given time, and my Home Depot store card because I keep killing my petunias. Smiley Sad The others either have a recurring charge assigned to them, or I pull them out occasionally to keep them from being closed for non-usage. Or they're a special-use card, like airline miles.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 22 of 38
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Member

Re: What's the advantage of having many CC?

I am in rebuilding mode and I have 3 cards, 1 visa amd 2 MC's. Two of them are secured. Once I let them age a bit I may try to upgrade but i wouldn't want to have more than 4 cards at a time. That's just me. I think if u have cards with healthy cl's than why carry more than $. again just my opinion.

TU-585 5/13/2011
Message 23 of 38
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Senior Contributor

Re: What's the advantage of having many CC?

One advantage of having a lot of CC is the AAoA.  

 

If you have 2 cards and add a new card.    You AAoA goes down by 1/3.   

 

If you have 20 cards and add a new card.  Your AAofA goes down by 1/21.

 

Message 24 of 38
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New Contributor

Re: What's the advantage of having many CC?


@Peach8321 wrote:

So I've been reading on here how people have 8, 10, 20 cards...what is the advantage of that?

 

I have 4 that I use: 

PenFed - gas, personal use $9.5k CL

USAA MC - joint expenses, $24k CL

USAA Amex - bills, $14k CL

Victoria's Secret - their stuff, $650 CL

 

So why do people have so many more?  Is it because the limits are much lower than mine?  What is the advantage of having so many store cards?  We shop at Express, Home Depot, Target, Walmart a lot - should I get their cards?  Would they give me so much more in rewards or something? Should we get an AMEX card as everyone seems to love them (beyond the USAA one)?

 

Isn't it harder to keep track of all those cards?  Do y'all spend a lot more than us? (We spend less than $1,500 a month, usually much less, on CC)

 

Just curious to hear from people why they want to app for so many and have so many cards... thanks!


You save 5% with the Target card.

 

Currently Walmart has a $20 statement credit if you spend more than $100 

 

I wouldn't bother with Express, and consider Home Depot for 0% interest financing; currently the minimum purchase amount for 0% is $299. But must be paid in full within 12 months. 

 

Use 'em to your advantage Smiley Happy

TU FICO - 752 (8/12/11)
EX PLUS - 721 (8/9/11)
EQ FICO - 648 (2010)

(21 years old)
Message 25 of 38
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Frequent Contributor

Re: What's the advantage of having many CC?


@Wolf3 wrote:

One advantage of having a lot of CC is the AAoA.  

 

If you have 2 cards and add a new card.    You AAoA goes down by 1/3.   

 

If you have 20 cards and add a new card.  Your AAofA goes down by 1/21.

 


 

Is that really how it works? Thats awesome if it does...



Barclays Uber - 4% Restaurants, 2% Online Purchases/Everyday Card || PenFed Cash - 5% Gas || Amazon Visa Signature - 5% Amazon || U.S. Bank Cash+ - 5% Utilities, 5% Cable/Internet || AMEX BCP - 6% Groceries || WF Cash - Cell Insurance || Rotating 5% Categories - Chase Freedom, Discover It, Citi Dividend || AMEX Zync - For Fun!

Message 26 of 38
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Regular Contributor

Re: What's the advantage of having many CC?


@Meltdownblitz wrote:

@Wolf3 wrote:

One advantage of having a lot of CC is the AAoA.  

 

If you have 2 cards and add a new card.    You AAoA goes down by 1/3.   

 

If you have 20 cards and add a new card.  Your AAofA goes down by 1/21.

 


 

Is that really how it works? Thats awesome if it does...



Well... it is just simply math and it sounds right.


Starting Score: EQ: 703 (4/2011);
Current Score: EQ: 738 (04/2013)

Goal Score: ALL 800

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Message 27 of 38
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Established Contributor

Re: What's the advantage of having many CC?


@Wolf3 wrote:

One advantage of having a lot of CC is the AAoA.  

 

If you have 2 cards and add a new card.    You AAoA goes down by 1/3.   

 

If you have 20 cards and add a new card.  Your AAofA goes down by 1/21.

 


That's the main reason why I am angry that I did not get more cards when I started my credit journey. I had only one card for years, and each piddly tradeline I get trashes the AAoA relentlessly.

Message 28 of 38
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Moderator Emerita

Re: What's the advantage of having many CC?

 


@dp321 wrote:

@Meltdownblitz wrote:

@Wolf3 wrote:

One advantage of having a lot of CC is the AAoA.  

 

If you have 2 cards and add a new card.    You AAoA goes down by 1/3.   

 

If you have 20 cards and add a new card.  Your AAofA goes down by 1/21.

 


 

Is that really how it works? Thats awesome if it does...



Well... it is just simply math and it sounds right.


It's rough, but it's pretty much true.

 

When you calculate your AAoA, you divide the total number of months of all your accounts by the number of accounts. If the number of accounts is small (i.e., few CC's), the result is going to swing a lot more by adding a card than if the number of accounts is large. So for instance:

 

3 accounts, AAoA of one year (or 12 months), add a card: (3x12) / 4 accounts = 9 months, down from 12 months <-- 25% drop in AAoA

 

10 accounts, AAoA 12 months, add a card: (10x12) / 11 accounts = 10.9 months, down from 12 months <-- ~9.2% drop in AAoA

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 29 of 38
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Moderator Emeritus

Re: What's the advantage of having many CC?


@haulingthescoreup wrote:

 


@dp321 wrote:

@Meltdownblitz wrote:

@Wolf3 wrote:

One advantage of having a lot of CC is the AAoA.  

 

If you have 2 cards and add a new card.    You AAoA goes down by 1/3.   

 

If you have 20 cards and add a new card.  Your AAofA goes down by 1/21.

 


 

Is that really how it works? Thats awesome if it does...



Well... it is just simply math and it sounds right.


It's rough, but it's pretty much true.

 

When you calculate your AAoA, you divide the total number of months of all your accounts by the number of accounts. If the number of accounts is small (i.e., few CC's), the result is going to swing a lot more by adding a card than if the number of accounts is large. So for instance:

 

3 accounts, AAoA of one year (or 12 months), add a card: (3x12) / 4 accounts = 9 months, down from 12 months <-- 25% drop in AAoA

 

10 accounts, AAoA 12 months, add a card: (10x12) / 11 accounts = 10.9 months, down from 12 months <-- ~9.2% drop in AAoA


Yeah.  It gets a bit hairy though, because each of those 20 cards has reduced the AAofA along the way.  It's not like you start with 20 cards in month one.  I've played around with this on my AAofA spreadsheet  - probably when I should have been dusting or some such, (and it seems to prove I have a very twisted vision of how to spend my free time) and it tends to be much less enticing than it first sounds. 

 

And, of course, remember those FICO reason codes.  You can have too many bank cards (merchant cards seem to be a different animal - the reason code specifies bank cards).  One member here got his fingers slapped with this code - you don't see it rise to the top of anyone's reason codes too often, but it's out there.  Maybe something to keep tucked in the back of the old brain cells.

Just puttin' syrup on something, don't make it pancakes.
Message 30 of 38
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