Why So Many?

[Anonymous]

What cards do you currently have that yields $10250 in total credit limit?

[Cdnewmanpac]

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@Anonymous wrote:

As of right now, we have two brand new TL, with limits that will be very easy to keep the util down on. 10250 limit/87k income. 3 open and completely positive installments for hubs, 2 for me. 

If I'm not going to be really going after rewards at this point, having the two TL with good util should be fine until we can get some good history and apply for the cards that actually offer great rewards, correct?  I'm just trying to make sure that I'm doing the right thing here. 

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1. Utilization only matters the DAY you apply for new credit. So as long as you pay attention in the month preceeding any big application, you will be fine regardless of limits.

2. For maximizing fico scores, you MAY benefit from a 3rd revolving trade line. You may not. But 2 or 3 are fine for score purposes.

3. Pursuing maximum rewards doesn't necessarily mean lots of cards. That may be true if all you focus on are straight cash rewards, but remember this: if you spend 40k/year on credit cards, the difference in cash back between 1% and 2% is $400. You can decide not to worry about rewards at all and the impact on your actual finances will be trivial. Those of us who focus on rewards do so at least in part as a game. But nobody should be under the delusion that maximizing (or even getting) rewards is "important" in any real sense. 

Your current cards are great for someone focused on building credit. Many people are stuck with limits in the hundreds of dollars for years. Relax, use your cards periodically, pay them off, repeat. If you see a card that would help you in some way, consider adding a 3rd line. If you don't, just go with what you've got for a year. Either way, you'll be in a good position in a year to use your credit in any way that helps you achieve your goals.

[Anonymous]

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@Anonymous wrote:
What cards do you currently have that yields $10250 in total credit limit?

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@Anonymous nRewards @ 10k

@Anonymous @250

Current EQ FICO: 602

Items that are damaging right now: One derog from LVNV, student loans that defaulted, and then went through two other lenders until they got squared away. AAoA is very low, 1 yr 11months. Until apped and received cards yesterday, no revolving credit. 

[Anonymous]

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@Cdnewmanpac wrote:

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@Anonymous wrote:

As of right now, we have two brand new TL, with limits that will be very easy to keep the util down on. 10250 limit/87k income. 3 open and completely positive installments for hubs, 2 for me. 

If I'm not going to be really going after rewards at this point, having the two TL with good util should be fine until we can get some good history and apply for the cards that actually offer great rewards, correct?  I'm just trying to make sure that I'm doing the right thing here. 

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1. Utilization only matters the DAY you apply for new credit. So as long as you pay attention in the month preceeding any big application, you will be fine regardless of limits.

2. For maximizing fico scores, you MAY benefit from a 3rd revolving trade line. You may not. But 2 or 3 are fine for score purposes.

3. Pursuing maximum rewards doesn't necessarily mean lots of cards. That may be true if all you focus on are straight cash rewards, but remember this: if you spend 40k/year on credit cards, the difference in cash back between 1% and 2% is $400. You can decide not to worry about rewards at all and the impact on your actual finances will be trivial. Those of us who focus on rewards do so at least in part as a game. But nobody should be under the delusion that maximizing (or even getting) rewards is "important" in any real sense. 

Your current cards are great for someone focused on building credit. Many people are stuck with limits in the hundreds of dollars for years. Relax, use your cards periodically, pay them off, repeat. If you see a card that would help you in some way, consider adding a 3rd line. If you don't, just go with what you've got for a year. Either way, you'll be in a good position in a year to use your credit in any way that helps you achieve your goals.

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Thanks! I would probably be interested in playing the rewards game once our credit situation allowed us to get cards that would be worth 'playing' with. I already use a series of online things (like ebates) to stack up rewards/cash back bonuses. But for now the only thing I really want to do is tend the garden for a while. Hubs will need a new vehicle within the next 12 months, so my goal is to have everything as good as it can be before he goes in for that, in order to not get reamed on interest. 

[Anonymous]

To me, rewards are extremely important. I save up until I get $140, use $120 for a statement credit and build the rewards back up again. Saving money is very important to me, especially with a new mortgage. I have earned about $350 since July. I will most likely get $500 back this year. I have been charging $1500-$2000 per month on my rewards cards. To get a decent amount of cash back, you got to pump a lot of money through your cards every month.

[jsickz32]

Only one reason for me and that is because i can. Also utility

[bs6054]

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@Anonymous wrote:
To me, rewards are extremely important. I save up until I get $140, use $120 for a statement credit and build the rewards back up again. Saving money is very important to me, especially with a new mortgage. I have earned about $350 since July. I will most likely get $500 back this year. I have been charging  $1500-$2000 per month on my rewards cards. To get a decent amount of cash back, you got to pump a lot of money through your cards every month.

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Right, but I think Cdnewmanpac's point is that even the "best" reward strategy (by adding lots of cards for example) doesn't make a huge difference.  If you replace a 1% with a 5% on your spend, that is an extra $1000, but that is unlikely to be possible (all spend in 5%).  And at the other end, when I have 20 cards, and get a new one that gives me 5% on [green books on Danish Railway history], the spend in that niche is very small, so the extra reward may not be worth the hassle.

[jamesdwi]

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@bs6054 wrote:

There are several different motivations.

1) As Commandolam says, all the cool kids are doing it, and you wouldn't want to be uncool would you?

2) Genuine need for lots of credit (I suspect that is rare)

3) Utilization:  Adding CLs reducing utilization for a given balance, increasing score.  Much cited here, but in most cases far in excess of what is needed for this purpose.

4) Sign up bonuses.   These can be worth quite a lot

5) Rewards maximization.  Lots of different cards allows you to get maximum rewards on each kind of purchase.  True, but diminishing returns as you add more and more cards, as the niche for the latest card becomes small.

6) Portfolio renewal.  At the beginning people get what cards they can.  As scores/credit history improves, better cards become available.   Many people still keep most of their old ones, which makes the number look large, whereas only a small set are actively used.

7) Because the voices told me to.

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+1

even 3 cards when your rebuilding isn't enough, card #1  daily spender,   card #2 emergency ( but this may need to be 2-3 cards when you are stuck with a $300-$500 limits, $300 extra spending isn't much of an emergency these days),  card #3 vacation card even its a $500 limit  its barely usable for a nice weekend away with your spouse, a week long trip involving airfare and a rentel car and you need at least $2000 in availible credit at least temporarily these numbers aren't even 3 star accomadations.

Weekend Away:

$150 gas pre-authorization at the pump

$200 two nights at a semi-decent hotel

$50  pre-authorization at hotel when you check in.

oops allready at $400 80% of the CL card is maxed out.

$100 dinner at a nice resturant for two

$25   lunch on the second day

$50   dinner on second day

your $500 limit card is now over the limit if they haven't declined one or more purchases yet
and its only saturday....

Full Week Vacation:

$400 Airfare for two

$80 bag fees

$500 pre-authorization for rental for the week

$500 motel room for 5 days

$500 lunch and dinner for a week for two, if you eat breakfast at the hotel,

$150 gas pre-authorization....

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$2130

that is just food and lodging, no entertainment, no night at the bar, doesn't even include a nice bottle of wine with dinner.

[Anonymous]

I think I'm going to practice my rewards getting with my nRewards card. Hubs and I sat down and talked about using it in the place our debit when paying bills (ie, paying with the cc and immediately paying the cc with the bank)

[Anonymous]

So much great info here. You guys are rock stars. I want to go all Oprah and be like YOU get a CLI!Getty a CLI! EVERYBODY GETS CLIIIIIIIII!