What should I do about Credit Cards

[Anonymous]

Hello Wise Ones! 

Current FICO Score 8

EQ:707 | TU:673 | EX:659

I got my first 2 credit cards of my life in late 2013 when I was 36. I guess I am fortunate? LOL

At the time, I was just establishing my credit and trying to create good lines of credit. I heard that is what adults are supposed to do! I always hear about these amazing credit card rates and perks and am wondering when or how I get qualified for those. What is the secret!!??

I had some issues with my credit after getting the ball rolling in 2013.I spilled my credit guts in this post: http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Help-Cleaning-up-my-Credit/m-p/4943944#M53009...

As of right now, these are the cards I have: 

Capital One Platinum with a $500 Credit Limit with a 25.65% APR which seems really high. My annual fee on this card is $19. 

I called them the other day to see if I would be able to lower the rate or qualify for a better card. Based on the Pre-Qual I was told no, I am pretty sure there is no reason to have them run a FULL report to see if I qualify for anything. 

Our Community Credit Union Credit Card with a $500 limit and a 12.5% interest rate. No annual fee. 

This is the lowest rate they offer as they have shared that credit cards aren't a "big thing" for them. I absolutely LOVE this credit union though! They have been SO GOOD to me! 

USAA Amex Card with a $1000 Limit and 26.65% (Prime + 22.65%) APR. 

I just opened this one last month and haven't even used it yet. I am kind of afraid to. 

I plan to set up some sort of small auto debit each month. 

My total usage right now is at about 3% 

My major end goal and first priority is to buy a house sooner than later. Should I not really worry about the credit cards, or does someone have amazing advice to offer on how to qualify for the super snazzy credit card perks?

Thanks all! 

[Anonymous]

A few things.  One, I didn't even know the Platinum could come with a AF.  Mine didn't have one. 

Second, adopt a PIF philosophy ASAP.  That makes all of your interest rates irrelevant.  My interest rates could be 99.99% and it wouldn't bother me as I never pay a penny of interest.  I suggest you embrace this mentality and then APR becomes one less thing you ever have to think about.

If your goal is a mortgage, you ideally want no apps for about a year leading up to it.  So, if you're looking at it in the next year, don't app.  Assuming the cards you have now will suffice in terms of being able to pay for what you need, just focus on those for the next year by keeping utilization down, PIF, request SP CLIs, etc.  You should be able to take that $500 limit CO card to $1000 then $1500 within a year.  Your Amex you can 3X CLI at Day 61 from $1k to $3k and 180 days after that from $3k to $9k as long as your profile improves during that time.  As for the local CU card, only you know how they are with CLs but usually credit limits can grow on CU cards if you treat them well. 

You have 3 cards already which means you can maximize your FICO score under the utilization sector of the pie by allowing just 1 of them to report a small balance ($5 or so) while the other two report $0 balances.  While there may be a "want" to add another card, there is no "need" at this time for you.

Garden hard, keep aggregate utilization down to a single-digit number and in a year you'll be in a place where you can obtain the best mortgage interest rates.

[Anonymous]

Thank you for the feedback! That is awesome information.

By no means do I "need" more credit cards.......I would rather have none tbh but I know that I need to have lines of credit. I have adopted a PIF strategy and will continue to keep that going.  I have a few follow-up questions, if I may:

• How is your usage percentage rated good or bad if you aren't really using the cards?
• What is your recommendation in regards to letting one float with a small balance?
  • Should I charge a few bucks, and then just make the minimum payment? Should I do this on my lowest interest one? 
• What is SP CLIs, etc. you mentioned in your reply? 
• What is the actual benefit to increasing my limit if I am paying in full anyway? 

Thank you again! 

[Anonymous]

Op Amex is USAA Amex not regular Amex will it 3X cli ?  It is good the bk does not report.  You will  need to good will as many as possible of those derogs off and then age the rest.  Does the overpayment of unemployment  on public  records have your full ssn or just last 4 digits? If it has only the last 4 digits it may come off this summer  National Consumer Assistance program this summer? Judgemnets  and tax liens come under this I am wondering if unemployment might also.