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I have four cards. Should I spend on each one each month?

deadrealism
New Contributor

I have four cards. Should I spend on each one each month?

I have four credit cards: AmEx EveryDay Card, CSP card, Discover It card, and Titanium Card from Barclays.

 

I read somewhere that it's best to use one card primarily each month and let the others sit at a $0 balance so that's what I've been doing for a while. I use one card, PIF each month, and leave the other three sit at a zero balance. Is this healthy for my credit profile? Or is it best to make purchases on each card each month and then PIF?

 

I want to do all I can to strengthen my credit profile, which right now is rather thin...4 credit cards, one student loan, one auto loan.

FICO Score: 772 (Discover, as of 8/29/17); 760 (AmEx, as of 8/23/17); 772 (Barclays, as of 8/15/17)
Message 1 of 15
14 REPLIES 14
kdm31091
Super Contributor

Re: I have four cards. Should I spend on each one each month?


@deadrealism wrote:

I have four credit cards: AmEx EveryDay Card, CSP card, Discover It card, and Titanium Card from Barclays.

 

I read somewhere that it's best to use one card primarily each month and let the others sit at a $0 balance so that's what I've been doing for a while. I use one card, PIF each month, and leave the other three sit at a zero balance. Is this healthy for my credit profile? Or is it best to make purchases on each card each month and then PIF?

 

I want to do all I can to strengthen my credit profile, which right now is rather thin...4 credit cards, one student loan, one auto loan.


In the long run, none of it really matters. The whole "leave one with a balance and the rest zero" is basically just a trick to maximize your utilization. This will help you garner the most FICO points, but as I said, it has no long term impact whatsoever. You can do it if you want, you can also not do it.

 

You don't have to use every card every month. Some will close due to inactivity if you don't use them, but I'm talking more about after 6+ months or a year. Use the ones that  benefit you and pay the bill when it comes. If you want to optimize you can play with your utilization but unless you have a big app coming it's not really necessary or worth the effort at least IMO.

Message 2 of 15
takeshi74
Senior Contributor

Re: I have four cards. Should I spend on each one each month?

+1  Neither is really going to strengthen your credit profile.  Tweaking revolving utilization is something that can be done just prior to applying for new credit, requesting CLi's, etc.  Your revolving utilization is determined based on the balances and limits as currently indicated in your reports.  Prior balances and limits are irrelevant so there's no long term benefit from fretting over it.

 

Making purchases each month and PIF'ing doesn't really matter either.  PIF'ing is beneficial in avoiding accumulation of revovling debt and to avoid incurring interest so there is benefit there.  Using your accounts prevents them form being closed due to inactivity but that really doesn't matter for profile building.

 

Look at the standard FICO scoring factors:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

 

Payment History is really just a matter of whether or not your payments are on time.  It really doesn't care if you PIF or not.  It's about whether or not you're making at least the minimum by the due date.

 

Where amount matters is Amounts Owed and for revolving credit accounts it's revovling utilization that matters.  Balance to loan ratio for your installments also matters for Amounts Owed but it does not have anywhere near the same impact as revolving utilization.

 

Length of Credit History is mostly about your Average Age of Accounts.

 

Credit Mix is about the variety of credit accounts that you have.

 

New Credit is where hard pulls and having new accounts on your reports factor in.

 

 

If you want to strengthen your credit profile then always pay on time.  Keep your revolving utilization in check.  Build your AAoA but at the same time thicken your credit profile by adding new accounts as your financial needs dictate and your credit profile allows.  There's a balance to strike there which is why spreeing and gardening is generally a poor idea IMO.  Building your credit profile is a long, slow process.  Time and responsible maangement of your credit accounts and finances are what it's going to take.

Message 3 of 15
fordguy89
Valued Contributor

Re: I have four cards. Should I spend on each one each month?

Letting them rest and only using one is the trick for the scores but if the ones that are resting are some of the cards that are documented to grow with heavy use then you need to rotate them
Open one, close three. Open one, close three.
Message 4 of 15
12velectronics
Valued Contributor

Re: I have four cards. Should I spend on each one each month?

I haven't used my bofa card for 1.5 years and they haven't closed it yet
Message 5 of 15
IMCreditNewBee
New Contributor

Re: I have four cards. Should I spend on each one each month?


@deadrealism wrote:

I have four credit cards: AmEx EveryDay Card, CSP card, Discover It card, and Titanium Card from Barclays.

 

I read somewhere that it's best to use one card primarily each month and let the others sit at a $0 balance so that's what I've been doing for a while. I use one card, PIF each month, and leave the other three sit at a zero balance. Is this healthy for my credit profile? Or is it best to make purchases on each card each month and then PIF?

 

I want to do all I can to strengthen my credit profile, which right now is rather thin...4 credit cards, one student loan, one auto loan.


I would use Discover for its 5% rotating categories.

Next if you are planning on doing some travel and could use the CSP's UR points or Barclays 2% cash when redeemed for travel, then I would start using either one of those cards for everything else.

 

When you need to apply for a loan/new card, then make sure only 1 card is reporting a balance and preferrably it is under 10% utilization.  Just pay the others before the statement date so it'll report as $0.

Message 6 of 15
Gardener76
Valued Contributor

Re: I have four cards. Should I spend on each one each month?

I'm not the OP but I'd like to take the time to thank all of you for the info!!!!





Okay, I tried... Code wouldn't cooperate. Tried for 3 hours!!!
CapOne WMTMC 10K
AMEX GREEN NPSL
AMEX ED 26.1K
Message 7 of 15
Mattopotamus
Frequent Contributor

Re: I have four cards. Should I spend on each one each month?

Just to mimic others.  Most, myself included, just let 1 card post a balance.  The main reason is so we are showing utlization.  In the end, it dosn't matter if it is 1 card that post a balance or if that same amount is spread across all 4 cards.  It is just easier to manage 1.  I usually have my everyday card that I use for all purchases.  Most of my other cards are in the sock drawer and I use them maybe once a year so they do not get closed.  Most of the big players, chase, amex, discover, and citi will send you a notice if they are about to close the account due to activity.  

 

Message 8 of 15
AverageJoesCredit
Community Leader
Mega Contributor

Re: I have four cards. Should I spend on each one each month?

in my opinion, you have a really nice set of cards OP. I agree with many points pointed out in above posts. Just use your cards as you see fit. If its rewards etc ,you are looking for, then use the card that will help maximize them. If not just use how you feel comfortable and make sure to pay on time. In time your profile will strengthn . You seem to be doing fine , i wish you the best on your credit journeySmiley Happy
Message 9 of 15
DiscountDoubleCheck
Regular Contributor

Re: I have four cards. Should I spend on each one each month?

Mattopotamus- I respectivelly disagree... many of us with multiple reward cards use all of them for differing categories to maximize rewards. Since that portion is only 'current' and not looked at history, the only time I wouldnt use all my cards is when applying for credit. If I know I have a card, car, or mortgage to apply for, I will only use my Amex since it has the largest limit. I can spend $2,000 on it and still be under 9%. Would use that and let the rest report 0 balance for a couple months prior if Im anticipating applying for credit to ensure they all report correctly in order to boost my score for that month. If not applying for credit, that extra boost is not worth it to me.

CL: $10,000 _____ $10,000 ______ $7,100 _______ $7,000 _______ $23,300 ______ $5,000 _______ $9.500
Total Credit Limit: $71,900_____________________________________________________________Gardening Since: 09/01/2016
Message 10 of 15
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