Should I open another credit card account at this time?

[Senatorii]

Hi all, 

I need a little advice.

I am likely going to be getting a divorce (very sadly and unfortunately) before the end of the year.

I only "have" two credit card accounts:  

1. a "joint" account with my spouse (I am only an authorized user) (has been opened for many years), and

2. a sole account (which I just opened in February (thanks to the advice of the good folks in these forums).

When I pulled my TU and EQ through myFICO in February, they were TU = 779, EQ = 755.  I haven't pulled them recently.

Since I most likely will be getting divorced (not my idea, unfortunately), I assume that I will be losing the "joint" account (which, of course, is the oldest credit card account on my credit report) when my spouse takes me off as an authorized user.

Since I only opened my "sole" account in February 2010, I assume my credit scores took a hit (again, I haven't checked).

I am concerned about two things (but, not overly so - unless the advice I receive here tells me otherwise): 

1. since I will be decreasing the total amount of credit available to me, my credit usage will go up (relative to the % since February, in any event).

2. since your credit score is always higher (so I am told) if you have had accounts open for longer, that if I wait too long before opening another account, it will lower the average age of my accounts (I realize that no matter what, opening any new account will do that (right?), but I am trying to think long term here - i.e., get the account opened so the clock will start ticking).

Does it make any sense to open a new credit card account now?  Or, should I just leave things alone?

Regards,
Senatorii

[MarineVietVet]

I'm sorry to hear about your situation.

I would immediately remove yourself as the AU on that one account. If in the future it's status goes downhill your credit will be affected as well.

You have very good scores. I would wait until about August (6 months from last application) and apply for two more cards. From that point forward I would try to have only one card report a small (1-9%) balance each month and then always PIF before the due date to avoid finance charges. The other two cards can be used to show activity but pay any charges before the statements post each month so that they always report a zero balance.

This is for maximum tweaking. With your scores I wouldn't be as concerned about how many report but you do need to always keep your utilization in that 1-9% range. I always have more than half my cards show a balance each month and it might cost me a few points but I don't care.

All this is just my opinion of course.

From a BK years ago to:

9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

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[smallfry]

What he said. Get off the AU card today.

[Jazzzy]

Is the AU card a positively reporting tradeline right now? No late payments? Is there much of a balance on it?

If it is positive, I would apply for another card while you still have the AU card reporting. If the AU card is your oldest card, the strength of that will help you get a new card. I agree that it would be nice to get the clock ticking on a new card.

I don't see the big rush to get rid of the AU card unless it is hurting you. Right now it seems to be helping you, and I'd use that strength while you have it. Since you just got a card in February, you may want to wait a bit...especially if the divorce won't happen until later this year.

[smallfry]

OP has no control over what the spouse will do with that card. If I were going to take advantage of it I would apply tonite. Then get off of it.

[Jazzzy]

You can get off of an AU card any time you want and get it off your reports...if it turns negative. I'd use the strength of it while I had it if it is currently positive.

[MarineVietVet]

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@LynetteM wrote:

Is the AU card a positively reporting tradeline right now? No late payments? Is there much of a balance on it?

If it is positive, I would apply for another card while you still have the AU card reporting. If the AU card is your oldest card, the strength of that will help you get a new card. I agree that it would be nice to get the clock ticking on a new card.

I don't see the big rush to get rid of the AU card unless it is hurting you. Right now it seems to be helping you, and I'd use that strength while you have it. Since you just got a card in February, you may want to wait a bit...especially if the divorce won't happen until later this year.

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Hi Lynette,

This is a very rare occasion when I respectfully (sorta, kinda) disagree with you. At any time the future ex could trash this account just out of spite. It happens all the time. I know the OP can remove themselves at any time if this happens but I still would remove myself now to avoid hassles later.

I agree though that this account (if in good standing) might make it easier to get a new card. It's difficult sometimes to know exactly what to do. All any of us can do is make that tough decision and see what happens.

[MidnightVoice]

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@MarineVietVet wrote:

This is a very rare occasion when I respectfully (sorta, kinda) disagree with you. At any time the future ex could trash this account just out of spite. It happens all the time. I know the OP can remove themselves at any time if this happens but I still would remove myself now to avoid hassles later.

I agree though that this account (if in good standing) might make it easier to get a new card. It's difficult sometimes to know exactly what to do. All any of us can do is make that tough decision and see what happens.

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Agreed.

[Jazzzy]

I understand the reasons for taking yourself off of an account when you are only an AU. I guess my point is that it can be done at any time with no lasting damage. A person just needs to be aware that it can happen and be vigilant.

I'd use it's score-enhancing properties as long as I could. If it turns bad, then it's gone.

[smallfry]

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@LynetteM wrote:

I understand the reasons for taking yourself off of an account when you are only an AU. I guess my point is that it can be done at any time with no lasting damage. A person just needs to be aware that it can happen and be vigilant.

I'd use it's score-enhancing properties as long as I could. If it turns bad, then it's gone.

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Any score bump through this card is gone in a few months. I would apply now if it is helping and eat the hit to AAofA and new account/new inquiry. He might decide to remove her. Or she might have some problem removing herself as far as her credit reports go. It is not impossible.