Hey all, fairly new to these forums, although I did post and use these forums for guidance before and following a BK7 in 2016. Using the tips on here my wife and I have rebounded nicely, my credit score is in the low 700s and hers is not far behind. We just closed on a new house on 11/25. Here is our predicament/situation going forward and a little background on our credit card situation.
We currently our looking at ditching a few of our beginner cards that we are basically paying a total of $30 to $50 a month just to have them open; Credit 1 (two cards), Verve, Merrick are the ones we are looking at canceling since their monthly fees range from $5 to $15 and the occasional yearly fees. None of these have had a transaction in over a year or maybe two. My two highest limit cards are a Capital One with a $3250 limit and a Discover with a $4700 limit. My wife also has a Capital One card with a $1500 and an authorized user on my Discover since Capital One never gives her a credit limit increase. Our total credit card debt is just under $2000, usually kept a lot lower with our only debt being utility bills which we pay in full each month. Put some Christmas shopping on the Discover due to 5% cash back, however will again be paid in full. Long story short we feel we have done an excellent job bouncing back.
Here is the struggle, we would like to ideally put our total credit limit into one card, something with a 10k limit or more but for whatever reason we struggle to get credit line increases. I know it is a waiting game. But in the meantime I was preapproved for a 13k personal line of credit. I feel like we should take this offer, and keep only our Discover and Capital One accounts open, taking the initial hit on our credit score, but we bought a house so we aren't looking at any big credit usages anytime soon. We are working on building up our emergency fund which was nearly depleted during the home buying/closing process. In the meantime a 13k personal line of credit seems like a good safety net and given our dedication to finacial well-being post BK7 I am not worried about abusing it.
What are the benefits of a personal line of credit, and how does it affect or reflect my credit score? I want the high overall credit limit as a buffer, does a personal line of credit count towards credit limit? Also probably a dumb question, but do you pay any payments on a personal line of credit if you aren't using it?
Sorry for the wall of text, my wife also tells me I talk to much 
Actually it would be best to keep 3 cards and not place everything into 1 basket. FICO likes a min of 3 cards open but 1 reporting. So having one large CL and 1 card really isnt ideal. Yes close any fee cards down because you've made it back to some nice cards. You may lose some point if they are your oldest. But thats the least of you problems. The $ saved from all the fees will benefit you more and your wallet. Others will have opinions. But 1 card with high CL isnt the stragegy to go with. Good Luck and Congrats!
Personal Line Of Credit can be a useful emergency fund if you're able to pay off in a timely manner and not carry a balance for an expended period of time.
PLOC with single digit APR, yes.
PLOC with double digit APR, no.
PLOC with single digit APR, yes.
PLOC with double digit APR, no.
@Anonymous wrote:Hey all, fairly new to these forums, although I did post and use these forums for guidance before and following a BK7 in 2016. Using the tips on here my wife and I have rebounded nicely, my credit score is in the low 700s and hers is not far behind. We just closed on a new house on 11/25. Here is our predicament/situation going forward and a little background on our credit card situation.
We currently our looking at ditching a few of our beginner cards that we are basically paying a total of $30 to $50 a month just to have them open; Credit 1 (two cards), Verve, Merrick are the ones we are looking at canceling since their monthly fees range from $5 to $15 and the occasional yearly fees. None of these have had a transaction in over a year or maybe two. My two highest limit cards are a Capital One with a $3250 limit and a Discover with a $4700 limit. My wife also has a Capital One card with a $1500 and an authorized user on my Discover since Capital One never gives her a credit limit increase. Our total credit card debt is just under $2000, usually kept a lot lower with our only debt being utility bills which we pay in full each month. Put some Christmas shopping on the Discover due to 5% cash back, however will again be paid in full. Long story short we feel we have done an excellent job bouncing back.
Here is the struggle, we would like to ideally put our total credit limit into one card, something with a 10k limit or more but for whatever reason we struggle to get credit line increases. I know it is a waiting game. But in the meantime I was preapproved for a 13k personal line of credit. I feel like we should take this offer, and keep only our Discover and Capital One accounts open, taking the initial hit on our credit score, but we bought a house so we aren't looking at any big credit usages anytime soon. We are working on building up our emergency fund which was nearly depleted during the home buying/closing process. In the meantime a 13k personal line of credit seems like a good safety net and given our dedication to finacial well-being post BK7 I am not worried about abusing it.
What are the benefits of a personal line of credit, and how does it affect or reflect my credit score? I want the high overall credit limit as a buffer, does a personal line of credit count towards credit limit? Also probably a dumb question, but do you pay any payments on a personal line of credit if you aren't using it?
Sorry for the wall of text, my wife also tells me I talk to much
1. You should definitely close Credit One, Verve, and Merrick.
2. A personal line of credit is indeed a good safety net, if the interest rate is good.
3. In terms of your FICO scores it's treated the same as a credit card, so $13k available credit will help your revolving utilization.
4. It's very handy in a number of ways: e.g., want to use credit but company you're paying doesn't accept credit cards, or charges a convenience fee for credit card payments; handy in emergencies; costs nothing unless you use it.
5. If it's at zero balance you pay nothing.
6. There are no fees. And there's no grace period. If you borrow $100 for 10 days, you pay 10 days interest on $100. Period.
I'm assuming your PLOC would be from a credit union and is the usual kind.
