Why so many credit cards? What is the benefit

[Anonymous]

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@Anonymous wrote:
Because I can

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+1

[Anonymous]

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@IWOL wrote:

I just wanted to add that one benfit of having a lot of accounts is that it builds a  thick file.

After the accounts have aged a few years, if you add additional cards or loans they will have minimal impact on your AAoA. If you have only 2 or 3 cards and you add 2 new ones 5 years later that can really zap your AAoA.

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Right, but I find this sort of circular.   Basically "I get lots of cards so I can add lots more cards (without hurting the score)"

[kkapdolee]

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@Anonymous wrote:

37 for me (see my new Sig). Scores in the low 800's.

I'll give you three why's:

Why get 37 cards? Sign up bonuses, mostly.  Sometimes for ongoing rewards, but usually that's a secondary consideration to a great starting bonus.  Back in the day, I'd get them for B/T, when you could often get a 0% no-fee B/T and stick the money in a CD earning 6%.  God I miss those days...

Why use 37 cards? Well I don't; most are SD. But the ones I use I do because they offer me the best return. I love to optimize rewards.

Why keep 37 cards? Because there's just no good reason to close them.

Chris.

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I have 23 credit cards for the same reasons. FICOs in mid to high 700s.

Edit: Actually, I don't do it for B/T or carrying balance on 0% interest. Mostly for 1. bonus, 2. optimizing rewards combination on my spending.

[Anonymous]

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@lolabelle wrote:
I'm curious to know how you people with so many credit cards manage to have super high credit scores. My scores are great, utilization is optimal, AAofA is almost 9 years (thanks in part to super old student loans that won't be paid off for ages). I have 8 credit cards, around $80K CL total, and would love to get up to $100K and take advantage of some app bonuses, but am living in fear of tanking my score.

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Why would you think that having lots of cards would hurt your score? *Having* a large number of open cards doesn't factor into your score one iota.  Show me any FICO score breakdown that lists "number of cards" as a component or part of a component (other than not having enough cards).

I apply for 3-6 new cards each year.  With 37 cards, my scores hover in the low 800's.

Now, in the short term, *acquiring* lots of cards can have an impact in several ways (depending on scoring model):
- Too many recent inquiries
- Average age of open accounts
- Number of accounts opened in last 3 months/6 months/year

But if you have a thick file like I do, those reasons are swimming up stream against long overall age (unfortunately only 14 years in my case), zero negative entries, low utilization (very little used of $400k+ total credit) and a good mix of credit types.

There's no point having a great credit score if you don't exploit it!

Chris.

[Open123]

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@Anonymous wrote:

There's no point having a great credit score if you don't exploit it!

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+1

Couldn't agree more!  

[lolabelle]

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@Anonymous wrote:

Why would you think that having lots of cards would hurt your score? 

 ...

Now, in the short term, *acquiring* lots of cards can have an impact in several ways (depending on scoring model):
- Too many recent inquiries
- Average age of open accounts
- Number of accounts opened in last 3 months/6 months/year

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I'm concerned about it for the reasons you listed in your post.

lt's not the *having* of the credit cards that's the concern, it's the potential implication for one's score as a result of inquiries, new credit, etc.  I guess it's more a big deal if you're going to be trying to secure a mortgage...

I totally agree that the main point of having a great score is to make it work for you.  It's just not totally clear to me how making it work for you works exactly.  Just when I think I have it figured out, along comes someone with $400K available credit, multiple new accounts every year, and an 800+ score.    

Even with my bajillion old accounts, I'm not sure I could pull that off.  And I'm also not sure I could convince creditors to give me $400K worth of available credit, even though my income is pretty decent.  That could be more about the high student loan debt, though...  

And then, if they did, I couldn't spend enough every month to keep my utilization at at least 1%.  Or shouldn't, anyway.  And having a <1% utilization could also affect my score.  That's a lot to think about.

[kdm31091]

It is up to an individual how many cards they want, but I prefer to stay at 6 or less. Really 6 is pushing it and I plan to pare down to 4 by the end of the year.

You can have a perfectly good, even excellent FICO score with 2 or 3 cards. You do not "need" more than that for FICO purposes.

The decision to have 10, 20, 25, whatever is largely a preference usually based on util or rewards. But everyone's comfort zone is different. I could never have 20 cards.

[Anonymous]

I currently have 7 cards. Next time I app I'll be going after three cards. If I get them, I'll still have 7 cards because I'm going to dump the three on the bottom tier.

[Anonymous]

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@lolabelle wrote:

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@Anonymous wrote:

Why would you think that having lots of cards would hurt your score? 

 ...

Now, in the short term, *acquiring* lots of cards can have an impact in several ways (depending on scoring model):
- Too many recent inquiries
- Average age of open accounts
- Number of accounts opened in last 3 months/6 months/year

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I'm concerned about it for the reasons you listed in your post.

lt's not the *having* of the credit cards that's the concern, it's the potential implication for one's score as a result of inquiries, new credit, etc.  I guess it's more a big deal if you're going to be trying to secure a mortgage...

I totally agree that the main point of having a great score is to make it work for you.  It's just not totally clear to me how making it work for you works exactly.  Just when I think I have it figured out, along comes someone with $400K available credit, multiple new accounts every year, and an 800+ score.    

Even with my bajillion old accounts, I'm not sure I could pull that off.  And I'm also not sure I could convince creditors to give me $400K worth of available credit, even though my income is pretty decent.  That could be more about the high student loan debt, though...  

And then, if they did, I couldn't spend enough every month to keep my utilization at at least 1%.  Or shouldn't, anyway.  And having a <1% utilization could also affect my score.  That's a lot to think about.

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The scoring can be complex.   I have well below 1% util and still get 850s on some reports (probably any non-zero is rounded to 1%.  Re mortgages, I think some advice I've seen here is way too cautious (no apps for two years for example).    Yes, in the worst case, one extra app can move you from one interest tier to another, but that's not very likely to happen and if you can get decent payback fror the card (bonus, rewards etc) it may well be worth it.

But at the heart, people get cards because, in our miserable little version of the world, doing so is fun.  Not, as some maintain here, because they can, they CAN do a lot of things.  It's because apping and discussing and managing the cards (CLI, tier upgrades, spreadsheets etc)  gives pleasure.   Really what the phrase "Get a life!" could have been invented for!

[CarbonCard]