Consumer Credit

[Anonymous]

Hi AirTroop.  The credit scoring models used by the insurance industry consider any auto-related credit account a bad thing, even if you have perfect payment history and a zero balance.  Such accounts include Auto Zone, Pep Boys, Firestone, etc.  These credit models also consider store cards a bad thing, again even if they have a perfect payment history.  Examples of store cards are Macy's, JC Penney, Shell, etc. -- cards that do not have a VISA, MC, Discover, or Amex logo on them and can therefore only be used at that merchant.

FICO models do not consider auto-related or store cards a bad thing in and of themselves.  FICO 9 is less well studied than FICO 8 and earlier but I think most of the veterans here think that FICO 9 doesn't care either. 

[Anonymous]

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@Anonymous wrote:

So I ended up closing the discount tire because really its only main benefit is I can maybe get 50-70USD off a set of tires, depending on the promo running then and if it happens to be tires I want. Over the course of a tires lifetime that really is a small amount to worry about. The credit one card which was the one I pay 10 a month for, I kept open for now because they were willing to drop the monthly fee entirely so I figured it would be good, since its a visa, to keep. I will use it to buy myself a 50USD amazon gift card a month. 

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Great news about getting Credit One to get rid of your fee!  Congrats.

I noted your plans to send $50/month into your Amazon gift card balance.  I am curious... if you had no credit cards (debit cards only) would you still do that?  That's $600 a year to Amazon.  And that's fine if you know you'd buy at least that much at Amazon even if you had no credit cards.  It's way overkill, however, if you are doing it to make sure that Credit One considers your card active (i.e. to ensure they won't close it).

[Anonymous]

Oh yea Im an amazon shopper! i have an amazon store card and an amazon prime visa, and most cards I have with rewards give me a strong amazon benefit as well. Online I really dont shop anywhere else except newegg and ebay. The main purpose though is yea, to keep the card active at this point. I may cancel it later on but for now I have little use for it otherwise or at least, not enough to just carry the plastic around with me. Its a fourth of the next lowest limit card I have and gives no rewards benefits at all. I have just had it for 5ish years so for AAoA I felt it made sense to keep it a bit longer

[Anonymous]

If the goal is to keep it open (by keeping it active) then adding $5 to your Amazon gift card balance is sufficient -- and you'd only need to do that once every six months.  (Every four months is fine too.)

$5 every four months is $15.  Your original plan was to spend $600 on this card.  If you spend the difference on one of your 5% cards, you will make an additional $29 each year.

[Anonymous]

Oh.. wow I didnt consider that actually I might do that instead ty!