Reformed Credit Card Abuser

Anonymous · ‎03-24-2015

This is my first post. After being totally frustrated recently I joined My Fico to gain some education. I have perfect credit in the sense that there are no late payments, collections etc. on my credit report, I have been blessed in my ability to maintain my credit (credit scores 705/705/685). However I had a recent run in with Chase, they gave me a $7500.00 visa card. After having the card less than a year they called to inform me they were reducing my credit line to $3500.00. I never made a late payment and always paid more than the minimum payment due (and the balance on the card was only $2500.00). I asked why they were reducing my credit line and they explained it was because the amount of outstanding credit I have (over $35,000.00 spread over 23 credit cards....yeah I now realize that is pretty bad). I will admit I am (was) a shopoholic (the UPS driver knows me personally due to the amount of times he has delivered packages to my home!!!) I never considered my debt a problem because I always paid my bills on time (and paid well over the minimum required payment) and with no problems (I have a pretty good income), but as i have recently learned the amount of credit you have works against you also, no matter how well you pay your bills. So I have recently obtained a line of credit from my Credit Union and I am paying off all my credit cards to a zero balance (and committing to not shopping, to be honest I have no reason to shop I feel like I have already purchased everything I need!!!) I have not made a purchase on any of my credit cards since December 2014!!!! (that is a major accomplishment for me!!!.....pray that I make it through the new spring and summer fashions coming out!!!). So my question is will this help increase my credit scores having zero balance on my credit cards and just having the line of credit and my mortgage (it is a revolving line of credit) or do I just need to wait until I have paid down the balance on the line of credit before I start seeing any improvements to my scores? To be honest seeing that $35,000.00 balance on the line of credit makes me anxious, I plan to pay it down quickly!! psychologically it was easier to live with when it was spread over 23 credit cards. I guess I owe Chase a thank you for bringing it to my attention. One final note, I did leave all the cards open, should I close all but 3 or 4 of them? I do plan to buy a new vehicle in 2016 and I want to have a good credit score for that. Any advice is welcomed. Thanks for reading my post, I know it is rather long.

Shogun · ‎03-24-2015

Hello and welcome to the forums, (and welcome to financial maturity)

i think ink you are on the right path. Pay off the loan, but leave those cards alone. Don't close any of them, unless there's an annual fee that you really don't need. Your util going down should help your scores.

Best of luck to you!

Starting Score: 504
July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge
Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.

Gunnar419 · ‎03-25-2015

I agree you're on the right path and wish you the best of luck.

I disagree with Shogun in one thing, though, and that is whether or not you should close any cards. Shopaholism is tough to overcome and though you've done great-great-great for three months, if you find the temptation returning, you might want to close store cards to help you resist. Closing cards won't cure shopaholism. It's probably possible to get in as much trouble with 3 cards as with 23! But in your case, the number of cards you have may be a symptom of the same sort of addiction that keeps you shopping when you don't need anything new.

I have a small case of shopaholism myself sometimes. It's hard. One thing I do is just change the WAY I shop. Forget spring fashions (or in my case, shiny new tools). Start hitting thrift stores and garage sales. Believe me, it's a lot more fun when you find some treasure used for $2 or $5 than when you buy it new for $100. And thrift stores and garage sales usually only take cash, so there's no temptation to run up cc debt.

Anonymous · ‎03-27-2015

Thank you for taking the time to respond to my post and thank you for your words of encouragement. I have made a commitment to my financial well being and after reading all the information on My Fico I now realize I had some financial growing up to do!!! It's good to know I am on the right track.