Why So Many?

[Anonymous]

I have been getting ALOT of great information here the past couple days. However one thing bugs me, maybe someone can enlighten me if i am looking at it wrong.

I see lotsa folks with 15 - 20+ creit cards in thier signatures.

Isnt this just overkill? It seems more like it is a game of "how many cards can i get?", 

Maybe i am completely missing the point. 

[Anonymous]

Thanks, just thought I had been doing rebuilding WAYYYYYY wrong.

[AverageJoesCredit]

No, just because someone has 15- 20 credit cards in no way should imply heading for financial trouble. Everyone is different everyone has different needs. Some of us ended up with alot of cards as we were rebuilding and find we CAN manage our cards without having to cancel them and end up building a thick profile. Not all of us chase rewards, not all of us play the game to churn and burn. One must look at what works for your lifestyle and spend and not necessarily worry about what others have or want. If you can make 3 cards work for you, why cant someone make 20 work for them ? Just my average view from someone who does have 15+ cards

[Anonymous]

1 to 5 lines of credit hurts your credit score.

The more lines of credit you have the more it helps. I believe it tops out at 21 though.

Just be sure to pace yourself as to not nuke your average age of accounts to the stone age as that will hurt your Credit Score along with all those hard pulls.

I would wager that most people here only use 2-6 cards monthly after the sign up bonuses are depleted anyways. The rest are sock drawered.

[jbsilva21]

I also do it to build relationships with different lenders/banks. All the credit cards that I have with the exception of Credit Unions I also maintain some kind of deposit account if they have the option for one. I am looking for a lender that I can grow with and eventually just use 5-6 of them for diversity. I transfer money to some of those bank accounts and then make the payments to said credit cards from their own bank except for Amex since it is only a savings account. I mainly use Chase since IMO they have the best bill pay service in the industry. It also allows me to see which banking service is best. As usual everyone is different and YMMV.

[Anonymous]

I can understand some of it, but I figure more that say 6 and arent you just essentially doubling up with the same lender? I mean more than one from Chase, Citi, Synchrony, Amex. Why is this preferred over increasing your existing card limit with the same issuer?

[Anonymous]

AverageJoe, I didnt mean that it couldnt work, I was trying to determine the benefit of it vs just upping limits on an existing card.
Trying to see the diff in 20 $2500 cards vs 10 $5000 vs 5 $10000 ... Wouldnt you get better aging by just upping limits?

[Anonymous]

I'm sure it's different for everyone but these seem to be the primary reasons:

1.  More accounts in good standing = higher scores, up to a point.  Some people chase high scores, and have multiple cards/trade lines for that purpose.

2.  Utilization:  more cards = more total credit available, meaning everyday spending doesn't run the utilization up so high to lower one's scores.  This is also related to #1 (high score chasing).

3.  Rewards chasing:  different cards have different rewards for different types of purchases.  People will carry multiple cards and pull out the one that gives the best rewards for the money they're spending and where they're spending it.

4.  Sign-up bonuses:  Much like rewards chasing, but requires opening new cards.  There are some deals to be had out there.

5.  Ego boosting.  Yes, we all have them, and some are "fed" with more cards/higher credit lines.

6.  It's a hobby or obsession for some... much like collecting stamps, or cars, etc.  Some people collect credit cards.  Also related to #5.

7.  Building or rebuilding.  Related to #1 above, but some of us have come out of a bankruptcy or other credit related issue, or are just starting out with no credit and are working to build their credit.  The older cards may be starter/secured cards with low limits, and as scores improve, they apply for better cards, but keep the older ones so that AAoA doesn't take too much of a hit.

The average American (not on MyFICO) generally has 1-3 cards, so the 20+ card jockeys are the exception rather than the rule, overall (though not on this forum).  I'm just average myself, on # of cards, and below average on total credit lines, but that was my choice.  I'm the opposite of most here, I'm happier with fewer cards since it means fewer bills to pay, fewer due dates to keep track of, etc., and lower limits so I don't overspend.

[Anonymous]

Everybody has their reasons but sometimes one may get caught up in this "game" of getting more and more credit cards.

I happened to me. I jumped from 2 cards to 11 in less than a year. Didn't see much advantages in it(if any) and just started to cut back all the way to 6 now. By December it needs to be only 4. 

But I am sure most people here with 10+ credit cards know what they are doing. I just didn't. 

[Anonymous]

For me, it's basically the reasons #1, 2 and 7 that @LowLimits identified, along with a bit of looking for the best rewards (one reason I got the Capital One QS Visa Signature is that it offers $150 rewards back after $500 spending, which is a LOT lower than many other such offers). That being said, I'm actually looking at trimming my card portfolio back a bit over the course of this year into next; I got my new Discover IT at least in part because the one I currently have, I got when my scores were significantly lower and my rebuild was still only just really beginning, At this point, I'm pretty sure it's a "starter"-bucket card, so I went to get a new one with a much better SL ($5000, the old one had a SL half that) that I plan to combine the old card into next year.

The same plan obtains for my Capital One QS MC, which is pretty definitely in my opinion a starter card, as I've not been able to get a CLI since the automatic one last summer which took me to $3500 from $3000. I'm planning to zero it out (and use the rewards) over the next three months or so and then combine it with the QS Visa ($10k) in July. I also plan to close out my old Cap 1 starter secured Platinum MC and get the deposit back to apply to other things. I'm also considering the possibility of closing out my Overstock store card; even though it's currently my third biggest CL, I've only used it a couple of times in the last six months since the category (books/music/movies) that I did most of my shopping there got taken down and shows no signs of being restored (and truthfully, the prices there weren't much lower than Amazon anyway).

I only have one credit card at this point that I'm really interested in getting this year, either the Marvel Mastercard or Paypal Mastercard (both Synchrony), and also considering reinstating my (closed) ex-Bill Me Later account at PayPal Credit, which would be a "hidden" tradeline. So assuming everything happens as described above, I'd probably have only 8-9 cards/tradelines by next spring, which I think would suffice pretty well for me, and most of the inquiries I've taken since summer 2016 will have dropped off or stopped affecting my scores. For late 2019, depending on how things shake out, I might try for an Amex once the 5-year-1-month waiting period post-BK completes, but assuming I get that, that would pretty well, I think, round out my portfolio.