Family Doesn't Understand My Relationship With Credit

[Anonymous]

I was in the majority until I started educating myself on these forums. I knew the system was biased for the lenders, but I was thrilled to learn of all the ways that we can still make things work for us. It’s a tribute to those who have put in the time trying theories and risking lots of HPs to figure out the patterns and how to work the system, with techniques such as AZEO coming to light. Hats off and beers up to you 👍

I knew of some of the benefits such as miles and purchase protection, but it never dawned on me to charge something and then pay it off with the cash I would’ve used to buy it in order to increase rewards, for example. I’ve been doing that with my small CapOne QS lately but it’ll be a lot more effective once my Discover IT with a better line arrives today or tomorrow. Looking forward to that cash back match!

[me12345]

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@wasCB14 wrote:

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@Anonymous wrote:

I currently have 7 credit cards, and live at home. My mom keeps telling me "I am going to wreck my credit for having so many cards" and "it is irrepsonsible to have more than a couple credit cards". I keep trying to explain that havings lots of cards is a good thing if you are responsible but she and no-one else seem to get it. Are we in a bubble on this forum, or are most people just not very credit savy?

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I'm not an expert on FICO scoring, but is the value of a 5th, 6th, 7th revolving account significant if utilization is low?

I've not had family worried I would wreck my credit, but I have had family wonder how I keep track of it all.

Same here... I use a spreadsheet

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[Physh1]

I've got quite a few friends who are scared of credit or assume what 'too many' cards can do to you. I've showeed a few friends my scores & they're amazed...most have helped me help them start rebuilding responsibly. Credit has an overwhelmingly negative social stigma for those who have no understanding of credit basics.

[Anonymous]

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@wasCB14 wrote:

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@Anonymous wrote:

I currently have 7 credit cards, and live at home. My mom keeps telling me "I am going to wreck my credit for having so many cards" and "it is irrepsonsible to have more than a couple credit cards". I keep trying to explain that havings lots of cards is a good thing if you are responsible but she and no-one else seem to get it. Are we in a bubble on this forum, or are most people just not very credit savy?

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I'm not an expert on FICO scoring, but is the value of a 5th, 6th, 7th revolving account significant if utilization is low?

I've not had family worried I would wreck my credit, but I have had family wonder how I keep track of it all.

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There's a scoring advantage in being able to have (when you need it) one card showing a positive balance with many open accounts showing a $0 balance.  The easiest way to have accounts with a zero balance that you can keep open for decades is credit cards.  By "many" we don't mean dozens.  Five total is fine in that sense.  (Three may be enough.)  And the phrase "when you need it" is important.  Implementing AZEO (All Zero Except One) doesn't help you build credit over time -- it's just a nice trick to implement in the 40 days before an important credit app (like a car loan, mortgage, etc.).

There may be an advantage to more than five in making your profile thicker (which just means more accounts).  A long term goal for anyone should be to eventually acquire seven open accounts and ten accounts total (open and closed together).  A person with exactly four accounts (3 cards and one loan) would take a small hit compared with someone with ten because his profile was too "thin."  And fewer than four accounts becomes more of a problem.  (4 is better than 3 is better than 2 is better than only 1.  A profile with only 1-2 accounts would be a significant scoring problem.)

More accounts in a profile also enables you to add more new accounts without it dinging your score -- less AAoA impact and a smaller percentage of your accounts being "new."

[AndySoCal]

The number of cards in and of itself does not impact the FICO score. The credit history of each or your credit acounts and how long you have had them is a different story. Also the credit limits in and of themselves has no impact on your score but your credit utilization does impact the FICO score. Credit limits to the extent that they impact your credit utilization is a part of the FICO score. I would suggest you stop apping for new credit for a while (at least a year).  Remember apply only for the credit you need and not want.

[Thomas_Thumb]

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@AndySoCal wrote:

The number of cards in and of itself does not impact the FICO score. The credit history of each or your credit acounts and how long you have had them is a different story. Also the credit limits in and of themselves has no impact on your score but your credit utilization does impact the FICO score. Credit limits to the extent that they impact your credit utilization is a part of the FICO score. I would suggest you stop apping for new credit for a while (at least a year).  Remember apply only for the credit you need and not want.

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Actually # of cards can impact score. Score potential is held back if the profile has to few revolving accounts and/or there are too few accounts with recent payment information.

[mitchblue]

As long as you understand using CC on basic everyday purchases.. bills, groceries, car payments - or if you need a toaster. Use them like a debit card. Don't buy a computer that's more than the budget you have planned just becuase you have a CC, and PIF.

[AndySoCal]

@thomas_thumb

If you are referring to score reason 03 please read the what you can do for this reason. I get the same reason but for installment accounts because I do not have any.