why do you have credit cards?

[longtimelurker]

The overall AAoA would not change but the visibility of low LIMIT accounts would be no more

Well, that's wrong in some sense, because as the accounts are contributing to the AAoA, they are still on the CR (albeit as closed) so they are visible to all.  So you are hypothesising that having low limit OPEN accounts is worse than having low limit closed accounts.   Which may or may not be true, but I haven't seen evidence either way.

[Fico2Go]

fair enough. It is an unknown variable. Unless of course the entire TL is removed.

[Swapmeet]

I'm saying that it makes much more sense to keep it open and grow it. The cards that should be closed, to me, are those that will not grow and there just are not many of these. It also seems like you're hypothesizing about applying on an ongoing basis--immediately closing cards with low initial CL and keeping only high ones. This is detrimental to your credit. So When I say it's wrong, I mean that I disagree fully with the theory and I think this will do a lot more harm than good to your credit.

[Pat94108]

I am not a big fan of credit cards and let's face it, I don't spend enough money to get those rewards. I use credit cards mosltly because they have more protection and you can easily charge a big amount (flight tickets etc.) and again better if you want to rent a car, hotel room and what not. However, I was recently in South America and I ended using my debit card as much as my AMEX if not more. Reason is my bank (capital one 360) doesn't charge any FTF so it was helpful and I saved some money. 

[Fico2Go]

Swapmeet, I agree with 99% of what u are saying. Less the part about applying on an ongoing basis.

I WOULD NOT ENCOURAGE Anyone..not even my mother in law to use up more than 3 HP per six month period.

Notice I said 3 hps and not three applications.

[enharu]

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@CreditScholar wrote:

My reasons for using credit are:

1. Ease of use

2. Ability to track expenses 

3. Purchase protections (when compared to debit, and especially overseas)

4. Points & Miles

5. Large purchasing power. There is no way I'd carry as much cash on me as I sometimes charge in a day.

I've never had any issues with my credit, nor have I ever had any CLDs, AAs, or denials. My credit cards have pretty much always worked for me when I needed them.

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+1. For me the biggest reason is probably convenience and protection.

The biggest cash denomination is just $100. Carrying wads of cash is just annoying....

For credit cards, it's the bank's money that's being used as well in the event of an unauthorized purchase. If I were to use debit and some SOB used my card, then I'm out of that money from my bank account until the bank clears it up.

[pdog661]

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@Fico2Go wrote:
Sure new accts do in fact hit CRs before the card even arrives. I was approved for barclay and the TL already shows up on TU..

What I meant by cancellation of newer accounts is this.

account a: 10 years
account b: 3 years
acct. c: 2 years
acct. d: 1 day old.

In such scenario, might be better to cancel unfavorable b and c if terms for D is favorable.

aaoa would also increase by cancelling the marginal acct. Basically dont let weak acct age or they will cost u.

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Once an account opens its a part of a persons AAoA.  Good standing accounts remain on files for 10 years, and bad trend lines (ie missed payments) report for 7.  Each of these are calculated until the TL falls off the report.  

The AAoA would not change in your example above whether the accounts are open or closed.  The only change would be your available credit.  Closed counts do not calculate into the UTL of ones credit.  

[Swapmeet]

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@Fico2Go wrote:
Swapmeet, I agree with 99% of what u are saying. Less the part about applying on an ongoing basis.

I WOULD NOT ENCOURAGE Anyone..not even my mother in law to use up more than 3 HP per six month period.

Notice I said 3 hps and not three applications.

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is that 3 hp per report, or three total? 

[Fico2Go]

For me I would DD which cb report or reports will be used by the credit company.  Then I would look at that report to make sure no more than three HPs were initiated from the prior six months. 

[Swapmeet]

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@Fico2Go wrote:

For me I would DD which cb report or reports will be used by the credit company.  Then I would look at that report to make sure no more than three HPs were initiated from the prior six months. 

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That is a hindsight plan. I was asking if you were comfortable, in your theory, which I still disagree with, taking 3 pulls per cb or three pulls total per 6 month period?