I would consider them a major credit card. They're a very reputable bank, on the visa/mastercard/amex networks, and often give people great limits and good APRs. I think retail cards that can only be used at a specific store are what's considered non-major.
I always thought of major as widely accepted. Like Credit One or Milestone could be major, but sub-prime major.
Not sure what that person on reddit was getting at. They may think that it's a good idea to have a relationship with one of the major credit card issuers, such as Citi, Chase or Amex, for whatever reason, and that may be a good point. But in terms of credit reporting, any Visa, MasterCard, Discover or Amex has the same credit standing as long as they report to all three bureaus, and in terms of acceptance, a Visa is a Visa, a MasterCard is a MasterCard, etc.
@KJinNC wrote:Not sure what that person on reddit was getting at. They may think that it's a good idea to have a relationship with one of the major credit card issuers, such as Citi, Chase or Amex, for whatever reason, and that may be a good point. But in terms of credit reporting, any Visa, MasterCard, Discover or Amex has the same credit standing as long as they report to all three bureaus, and in terms of acceptance, a Visa is a Visa, a MasterCard is a MasterCard, etc.
Not knowing his intent, I'd assume he's basically saying "not a store card". My first card was the Summit/Car Care card, when I decided to app for my Discover I did it because I was told I needed a major card that was accepted most everywhere.
Thinking about that now seems like a lifetime ago, even though it was only 2 years ago! 😂
@Remedios wrote:OP is talking about a theory that if CU card is the only one with a balance, there is possibility of scoring loss.
While I don't believe that to be true, it's possible some points would be lost if store card is the only one reporting a balance.
If I take a FICO hit for paying less interest with an institution that excels at customer service, I'm willing to take the hit.
@Anonymous wrote:I only have navy Federal, a home depot, and LA z boy. .
Great advice and comments above, @Anonymous.
How many cards do you have with Navy Federal?
And the other two are purely retail store cards, correct?
While there's nothing wrong with what you have, I might make a couple of points that could be helpful in the next steps of building your profile. And maybe this is what the other poster on Reddit was trying to say.
Lender and card diversity. If your only 'major' card is one card with NFCU, you're putting all your credit eggs in one basket. If there is fraud on the account, you may be unable to use it while a new card is being issued. Moreover, if something happens to sour your relationship with Navy, it's nice to have at least one other lender in the wings. It doesn't have to be a major bank and you don't have to have a dozen other lenders like some of us have. It could even be another military credit union like PenFed. At least a little diversity is a good thing.
Cards reporting. Right now, if you only have one NFCU card, 2/3 of your cards are retail cards. Are you using those cards every month where they will always report? Having multiple cards reporting statement balances and payments (at least 3) every month helps build your payment history better than one account reporting monthly. So even if you're carrying a balance now on one or both of those cards, hopefully one day you'll pay them off. Having another "major" card or two available and in use could help solidfy your credit profile and scores.
Card Closures. From my experience and from recent threads on My Fico, stores cards can be much more unstable than major cards. I can't tell you how many store cards I've had closed (often without notice) by the lender because I allowed them to sit idle a little too long. Store card lenders can be quick to lower credit limits or close cards. If 2/3 of your cards are store cards, your total lines of credit may be more at risk of an increased overall utilization rate if you're posting a balance on that third card. That could hurt your credit score. Store cards are best for either stores where you already naturally and regularly shop, or if using a special purchase promotion such as buying furniture with your La-z-Boy card.
Network Diversity. Not so much with Visa or Mastercard since they are accepted almost everywhere, but if your only card were to be an American Express, you might find it not accepted everywhere you want to use it. (Ditto for Discover which has a smaller network, although NFCU doesn't issue them.)
Over time, you may want or need higher lines of credit. Lenders tend to give credit based on what you've shown you can handle. Store cards typically have lower limits than major cards (with a few notable exceptions.) Lower limits will have a larger impact on the utilization calculations for that account's balance, not to mention overall utilization calculations. So having another major card or two (with possibly higher limits) can help you to start establishing yourself with better lines of credit. Regardless of how many retail cards one chooses to carry, having them as a minority instead of a majority of your lineup just helps you to build a more solid credit profile. Also, as you build your lines of credit, you are probably lowering the utilization rate of your existing credit which will help your credit scores.
Hope this helps and good luck with whatever you decide to do.
