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What does everyone do with all this credit?

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jl4
Established Contributor

Re: What does everyone do with all this credit?

 


@Anonymouswrote:

@jl4wrote:

 

After the bonus windows close, I've been pondering what to do and it sounds like a not-insignificant amount of folks follow the AZEO rule, though my mom did that and CapOne closed two of her cards... I assume because she zeroed them for a couple years straight. 


There are two ways to do AZEO without leaving cards unused for years and having them closed:

 

1.  Use the card as usual, then pay it off in full before the statement close date, so the statement balance is zero.  This is the balance that is reported by most card issuers.  (If you have any Chase cards, they will report a zero balance anytime you PIF.  For them you don't have to wait for the statement close date).

 

2.  Rotate between the cards, so a different card carries the non-zero balance each month.  That way every card shows usage a few times a year, but you can still do AZEO.

 

Also, you don't have to AZEO all the time... it's mainly a trick to boost scores before applying for something new, like a car loan, mortgage, or a new card.  As long as you keep utilization under ~30% your scores will be good even without AZEO... even better at under 8.9%.

 


Not sure why I didn't think of option 2. Perhaps not enough coffee this morning? I'll have 6 cards that can sustain my monthly spend individually here shortly (hurry up mail person?) so that makes a lot of sense. It'll be easy to default to my Chase FU since I also bank with them. 

EQ8: 779 (Inq: 1) | TU8: 771 (Inq: 0) | EX8: 763 (Inq: 4)
Total Rev: $182,500
Message 21 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?

I've wondered the same thing when I look at some of the signatures with people with three dozen and more CC, the really good CC. I wonder how they can feed them enough to keep them content. I am working on keeping 19 CC happy. When I read on here that somethimes, maybe too often. a CCC will CLD someone, I get scared. I have just over $165K in CL. My 11 bank cards are over $121K in total CL. My utilization is about 2% and decreasing. The Fuel Rewards MC goes away soon. I read all of the great virtues of PenFed and I think maybe that'll be the next one to try for at the end of Summer. Maybe.

Message 22 of 40
CH-7-Mission-Accomplished
Valued Contributor

Re: What does everyone do with all this credit?

I think it's a process.   You start out with such bad credit you can't even get a ripoff store card like Fingerhut with their fresh start program where you can buy a $25 item for $50 and pay over time at a high interest rate.   And because you are truly ignorant, you add the two worst credit cards on earth to your already sucky portfolio, Credit One and First Premier.   Now you have the three biggest dog turds in your credit file and credit underwriters for the next 10-plus years will be able to scoff at your shame.

 

But over time you get better cards and higher limits.   And then somewhere down the road you have two or three times your annual income in credit limits and the whole thing becomes such a PITA that you start closing out cards, starting with all the retail ones and moving forward.

 

When nobody loves you you're hungry for love, but once you've become a stud again, you can afford not to say yes to anybody that will have you.

 

I've learned you should do what feels right for you and not be afraid to change your game plan as your life moves forward.

 

I'm managing my 12 accounts plus my partner's 12 accounts and it is a huge PITA.   Together we have about 600K in limits.   I'm working to combine limits (like with Citibank) and others and start whittling this mess down.

 

Asking somebody how many credit cards they need is like asking them how many baseball cards they need, or how many midcentury antiques they need, or how many other things people become obsessed with.   It's an obsession.  It defies logic.  But most obsessions end at some point.

Message 23 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?

 

Credit "game" can be very dangerous. Very few have the necessary discipline to win this game in the long run. Most people out there don't. I am sure there are a lot of MyFicoers here who are always on the lookout for new cards and CLI's, and are able to take advantage of the promotions and bonuses that come with new CC's, and manage their credit well. But I have a feeling a lot of people also get carried away, apply for more credit than they reasonably need, and get burnt in the long run.  But then that's not just with credit. That applies to so many other areas in life.

Message 24 of 40
AverageJoesCredit
Legendary Contributor

Re: What does everyone do with all this credit?

Try not to use it but have it for when its neededSmiley Happy
Message 25 of 40
SouthJamaica
Mega Contributor

Re: What does everyone do with all this credit?


@Anonymouswrote:

Dang... someone moved this topic and caused my reply not to post... now I have to start all over.

 

I'm the polar opposite of most everyone here.  While most folks here reach for sky high limits on many cards, going for the $100K club, the $500K club, etc... here I am with just 3 cards, all with wimpy limits (ranging from $500 to an oh so impressive $2000...lol).  This is self imposed... if a card has an auto CLI or I apply for a new card and the SL is higher than I'm comfortable with, I call and have it lowered.  I do this because I have to stay within a tight budget and low limits keep me from overspending... even if I max all 3 cards out I can still pay them off.

 

In fact, my low limits saved me a bunch yesterday.  I was looking for a hotel in Florida for an upcoming trip.  The first place I looked at was $250 a night... ouch.  Plus it was "pay in full in advance" and "no refunds for cancellation", which means with taxes I would have had to pay over $2000... a bit hard to do when that's more than my highest limit.  I ended up doing some searching and found a place that was only $148/night, making the total bill under $1300, and when I booked they only charged me for the 1st night, so I have plenty of time to zero out my cards before the trip.  So, my low limits saved me a TON of money.

 

 

 


I always search for the cheapest of everything, no matter what my credit card limit is Smiley Happy


Total revolving limits 657200 (536700 reporting) FICO 8: EQ 712 TU 710 EX 708

Message 26 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?

This thread makes me want to sing a song...

 

I want to be the very best, like no one ever was...

Message 27 of 40
Glen_M
Frequent Contributor

Re: What does everyone do with all this credit?


@jl4wrote:

...
I see folks with tens or hundreds of thousands in revolving credit. What do y'all do with it? How do you manage it all? ...


It's like a dragon's hoard.  You don't do anything with it. 

 

Maybe spread the cards in a big pile and roll in them?  Smiley Tongue

 

 



Message 28 of 40
Anonymous
Not applicable

Re: What does everyone do with all this credit?


@K-in-Bostonwrote:
Count me in the “I need it for utilization” category. I use a spreadsheet and I enjoy free vacations.

Same I love lower utilization and higher score also to be honest banks earned zero 0 in interest on me... Smiley LOL

Message 29 of 40
Thomas_Thumb
Senior Contributor

Re: What does everyone do with all this credit?


@jl4wrote:

I'm new to the > $20k club, myself. That's a question I haven't been able to figure out an answer for. 

I see folks with tens or hundreds of thousands in revolving credit. What do y'all do with it? How do you manage it all? I love the idea of having substantial revolving credit but having two (maybe three) cards, all with 3-month spending bonuses feels like it'll be tough to manage coming from having zero cards ever that had such a perk. 

 

Or is it really just a game that I haven't figured out how to play and win, yet... Smiley Happy 


Personally, I prefer not constraining myself to AZEO or making payments before statements cut. I PIF statement balances before due dates but take advantage of the float time. A sufficiently high aggregate CL can accommodate reporting all charges without concern of having aggregate UT reaching 9%. That's my reason behind acquiring a total CL many times higher than what I need for spend.

 

An aggregate credit limit of 20 to 50 times average monthly CC spend is what I'd suggest for a buffer. My CL multiple to average spend is around 50. So, on average my utilization is 2% with all charges reporting. Month to month actual may vary bewteen 0.5% and 5% with no worries about having to pay early. For illustration, if someone spends $2k per month on average using CCs; 20 times spend => $40k CL and 50 times spend => $100k CL.  Yearly income to total CL is another consideration. 

 

For those that tend to carry monthly balances on high interest cards a lower multiple might be prudent. Say total CL between 5x to 10x average spend and total CL under 50% of yearly income.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 30 of 40
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