one or two credit cards?

[raggamuffin]

Hi everyone,

I've been rebuilding for the last year and this forum is a great help.  It's my first time posting.

I was just approved for a credit card with Navy Federal and received the card last week.  Right now, it's my only credit card and it has a $8000 limit.  I have a good job and plan to manage the card well, but need some clarification.  Is it recommended that you have at least two credit cards?  Is it best to have one report a balance and the other to remain zeroed out?

Also, as far as reporting a balance, does the card issuer report the balance AFTER the due date? Or before?  When should I pay off my balance to get the best reporting utilization while avoiding the finance charges?

Lastly, if I choose to stick with one credit card for right now, is there a larger impact fico-wise if I have a balance on the card/carry a small balance?  Thanks.

[Walt_K]

At least two cards is a good idea.  Not just for FICO scoring, but in case there is a problem with one of your cards or it is not accepted somewhere.  I think three is an ideal number.  

You are correct.  You want a small balance on one card only, less than 9% of that card's limit.  You want the other card to report $0 balances.  Most cards report the balance that is on your statement.  Whatever your bill says, that is what will show up on your credit report.  They might not send the info along until a few days after the statement, but they will report the info that is on the statement.

ETA: Re finance charges, you always pay your bill in full by the due date to avoid finance charges.  So, let's say your current balance is $1000 and your statement closing date is coming up on Monday.  You want to make a payment that will drop your balance to $720 or less (9% or less of your CL) so that when Monday hits, your bill says $720 or less.  Then, anytime before the due date, you pay the remaining balance to avoid interest charges.

I'm not sure how your score is affected when you only have one card.  I assume that the 9% or less rule still applies, but not sure. 

[Anonymous]

As far as I know, the balance is always reported before or at the very latest on the due date, but never after. 

[bichonmom]

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@raggamuffin wrote:

Hi everyone,

I've been rebuilding for the last year and this forum is a great help.  It's my first time posting.

I was just approved for a credit card with Navy Federal and received the card last week.  Right now, it's my only credit card and it has a $8000 limit.  I have a good job and plan to manage the card well, but need some clarification.  Is it recommended that you have at least two credit cards?  Is it best to have one report a balance and the other to remain zeroed out?

Also, as far as reporting a balance, does the card issuer report the balance AFTER the due date? Or before?  When should I pay off my balance to get the best reporting utilization while avoiding the finance charges?

Lastly, if I choose to stick with one credit card for right now, is there a larger impact fico-wise if I have a balance on the card/carry a small balance?  Thanks.

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First off, congratulations! That's a great CL for your first card!

Regarding the dates: Usually a day or two after the statement cuts, they will report the balance on the statement to the CRAs. If you want to prevent the balance from reporting (or lower the balance being reported), you can make a payment before the statement date. This is *different* than the due date. The statement date is usually 4 or 5 days after the due date.

So, if your due date for your first statement is Dec 15 and your statement date is Dec 20, and you want to control what's reporting to the CRAs, then you need to make a payment before Dec 20th. You need to allow for posting time, etc. I don't know how much time Navy requires, but usually it's a good idea to make your payment online 2 to 3 days *before* the date you want it paid.

Now, if you let the statement cut with a balance, then the balance will report to the CRAs, and your bill will be due probablly Jan 15. That's the date you need to PIF to prevent finance charges, or make the min pmt to prevent late fees, reporting late to CRAs, etc.

And yes, it is a good idea to have 2 to 3 cards, for util, history, etc. Not sure what to recommend for a second card. If there's a store you like to shop at a lot, maybe a store card would be a good addition. If you've been reading here, then you probably know GEMB is pretty good and has CLIs every 4 months, which helps w/your util and DTI for your FICO score.

You might try Amex Zync, but I believe I read here that they like to see at least a year of CC  history. Others may have more exp w/Amex to tell you about it.

[boomhower]

I'm a fan of at least four cards, one visa, one mastercard, and one Amex with a fourth either a discover or a repeat of the previous three.  Here's the most important part, all four need to be from different financial institutions.  If someone has a problem, either financial or technical you have plenty to fall back on.  You don't want to be on vacation and your one and only credit card starts having problems.

[raggamuffin]

Great! Thanks for the quick replies.  From what everyone said, I should keep the utilization under 9% or at zero before the statement date and pay it off before the due date.

Also, based on the replies and similar threads, I get the sense that the statement date can occur either before or after the due date.  I'm hoping that its not too confusing when I get my first statement from Navy Fed.

[dalebb]

IM pretty sure all my cards say the statement date online, I have seen them change a day or two depending on how may days r in the month, like February