Will adding two more credit cards actually make a difference?

[Anonymous]

Right above.  This falls into the recommendation of not putting all your eggs in one basket, which is true for any number of reasons.

[jamie123]

In all honesty having 3 or more cards is about building a strong AAoA and a thick file. If the OP didn't really want to manage 3 cards, she would be far and away better off in the long run to app for 2 cards, make a small purchase with each one when they arrive, pay them off and then cut them up and throw them in the trash. It will probably be at least 1 year and more probably 2 years before the lender would close them for lack of use. So for 2 years the OP would be getting good marks on her credit without any maintenance needed and the CCs would stay on her reports for another 10 years helping with her AAoA.

Throwing these cards away might sound strange but it takes away all possibility of OP overspending or making late payments. The cards will also help with her UTI while they are active. I just don't see any benefit in recommending staying with 1 card. Staying with 1 card just has so much downside and loss of opportunity in building scores and file thickness.

[Anonymous]

I'm not saying that strategy isn't a decent one, but again I reference my own profile as proof that it isn't necessary. I had only 1 CC for about 15 years. During that time though I had several other accounts... Probably 6-7 auto loans, 2 mortgage accounts, financed some furniture once, appliances another time, etc. Anyway, my file was reasonably thick despite only having 1 CC. Fast forward 18 years to today, 8 out of 9 of the open accounts on my CR (all but my mortgage) have been opened in the last 3 years, 7 out of 8 in about 2 years or less. That being said, all of my scores are top notch. Having added 2 more CCs 18 years ago would have very little impact today on my scores, as my age of accounts factors and file thickness are already just fine. I offer my profile here simply as another example to consider.

[jamie123]

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@Anonymous wrote:
I'm not saying that strategy isn't a decent one, but again I reference my own profile as proof that it isn't necessary. I had only 1 CC for about 15 years. During that time though I had several other accounts... Probably 6-7 auto loans, 2 mortgage accounts, financed some furniture once, appliances another time, etc. Anyway, my file was reasonably thick despite only having 1 CC. Fast forward 18 years to today, 8 out of 9 of the open accounts on my CR (all but my mortgage) have been opened in the last 3 years, 7 out of 8 in about 2 years or less. That being said, all of my scores are top notch. Having added 2 more CCs 18 years ago would have very little impact today on my scores, as my age of accounts factors and file thickness are already just fine. I offer my profile here simply as another example to consider.

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Yes, but everybody is different. The OP clearly states that she has no student loans, no auto loan and prefers to live using cash. She plans to apply for her first auto loan in a year.

She is evidently in her early twenties and IMHO needs to start building her credit future now. Sure you can have great scores with one credit card but that is such a thin file most loan officers would probably think twice about approving an auto loan or any loan for that matter. For sure she would get charged higher interest rates on an auto loan next year if she decides that 1 credit card is good enough. One credit card is definitely not good enough nowadays in the cashless society that we live in.

I lived for 10 years without any credit whatsoever and it was a huge mistake. I'm telling you straight up that that was one of the worst mistakes I made in life. Sure I did it, but no way am I telling anyone else that they should try it out. Check out the date I joined MyFICO that is in my Siggy. I joined this forum in March of 2012 without any open or closed credit and no credit score. My scores could probably be in the 800s right now but I'm running a high balance on two 0% offer cards. So I went from no credit score 6 years ago to having 10 credit cards with a combined credit line of $130K, a mortgage,  an auto loan, 2 closed installment loans and scores close to 800. But it was a lot of hard work and effort that could have easily been avoided if I had just kept 3 credit cards open.

And talking about how adding 2 more credit cards 18 years ago and how it would have little effect on your scores is not helping OP out at all. OP is young and I guarantee that she will be better off in 1 year if she adds those 2 cards today. She will have trouble getting an auto loan next year if she doesn't thicken up her file a bit now.

[Gmood1]

Thicken your file now OP, don't focus solely on scores.
We all have to start somewhere. Do it sooner than later. When you need that credit approval and can't get it. Chances are it will be because of your thin file. Two more cards and a SSL will do the trick.
I know from experience what it will do for a young profile like yours.

I instructed a step daughter your age do the same a year before her first auto loan. When she applied for her first auto loan at 20 years old. It was an instant approval, no cosigner needed. She also received the best rate they offered.
If you continue with one CC. The UW may feel you don't have enough experience with credit to grant your auto loan.

If you are living on your own. You'll have plenty of recurring monthly bills to use your CCs for. If it's allowed, pay your auto insurance, utilities, gas, food and anything else you'd normally use cash or a debit card for.
It's as simple as that. Put the debit card away. Use your CCs as though they're debit cards.

[Anonymous]

There's a communication misfire occuring between BBS and Jamie.

Jamie (very understandably) thinks that BBS is saying that our OP doesn't need to add more cards.  That is not how I read it.  My reading is that BBS totally agrees with Jamie that the best practical choice is for the OP to add more cards, but just not for the reasons Jamie originally gave.  Jamie's original reasons involved being able to create a profile where most cards showed $0 with at least one showing a positive balance.  BBS thinks that particular scoring benefit may be overhyped.

BBS thinks that the problem with our OP's profile is that he has exactly one account -- not that he has exactly one card.

Still, everyone agrees that the right strategy in practice is for our OP to add more cards.  It's the easiest way to get more accounts that will stay with him forever.  And it has the scoring benefit Jamie mentioned of being able to have several open accounts at $0 with one card reporting a positive balance -- a benefit that is much stronger in some FICO models than it is FICO 8 classic.

Our OP should also consider the Share Secured Loan Technique, given that he has no installment accounts (open or closed) on his report.  And the SSLT will also be one more way to get another account.

[Thomas_Thumb]

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@Anonymous wrote:

Hello! I hope you all are having a good weekend!

I only have the one Discover card that is 1 year and 6 months old. I don't have any loans, so my credit mix is pretty much just the one credit card.

I always pay on time and my average utilization reported at the end of the month is 2% or less. Thanks to many of the people on this forum my Transunion FICO score is 778 and my Experian FICO score is 781.

In about a year I'll graduate from college and have my first real loan when I buy a new car. I've been told by some professors that many employers for engineers check your credit history and credit score.

I'd like to try and get the best credit possible by the time I graduate. Do you think adding two credit cards would actually make a difference with my credit score? I know at least three revolving accounts is supposed to be optimal.

I guess the thing is, I don't really need two more cards. It'd be nice in some ways, but for the most part I live very meagerly and don't spend much on myself. I'm the kind of odd person who likes saving money rather than spending it.

Do you think adding two more credit cards (providing I use them like I do now) would truly make a big difference and improve my credit score? I can't decide what to do to be honest.

Any advice or help would be immensely appreciated. Thanks and I hope you're having a good day!

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As Revelate mentions, adding cards provides more flexability. In addition to potential fraud some establishments may not accept one type card but will accept another. I started with Diners Club and AMEX and then a few years later added Discover card, AT&T Universal Mastercard and a Chase Visa card. Dropped the Diners Club and Visa 12 years later. Still have the others cards.  Having multiple cards provides some buffer for dropping a card you no longer want/need without loss of convenience or a potential substantial drop in AoOA.

As others have said, the added accounts will help strengthen credit history and almost certainly provide higher long term score potential. Even adding one card only addresses limited flexibility to a degree. The additional credit line(s) also are helpful in maintaining utilization at a low level if you chose to pay balances after statements cut but before due date.

[Revelate]

Oh good point TT!

With Kroger's publicly kicking VISA to the curb, there's probably going to be a trend of that occurring as merchants really take a hard look at the pricing structure... transactional network diversity is going to be more important than ever.

[Anonymous]

Thank you to each and every one of you for your advice and opinions! They are greatly appreciated! You've all given me a lot to think about.

@SouthJamaica Thanks for your advice! I appreciate it and the time you took to help me!

@BrutalBodyShots I'm a member of a regional bank. But honestly, I don't think I want to be with them long term, so I didn't want to get a credit card from them.

I've been looking at other credit cards for sometime. The two I've narrowed it down to are the Amex Blue Cash Everyday and the Chase Freedom card.

@CreditGuyInDixie Thanks for your advice! I remember you guys telling me about the Secure Share Loan on my first post over a year ago. I really questioned whether I needed it or if it'd be worth it. Looking back, I wish I had done it. Do you think it'd help if I did it now? I mean since I do plan on getting a car loan within a year or so?

@Jamie123 Thanks for your advice! You've definitely given me a lot to think about. Most of my family doesn't do very well with finances. I've decided to be nothing like them in that realm. I definitely see yours and BrutalBodyShots points with AAoA and a thicker file.

@Revelate That's actually already happened to me. So I definitely understand your point!

@Gmood1 Thanks for your advice! I think you're probably right. And it makes sense that a thicker profile would help. Do you think the Secure Share Loan would help? Just since I'd most likely be getting a car loan in a year or so?

@Thomas_Thumb Always nice to get your input and thanks for your advice! If I might ask, what do you think of the Secure Share Loan in my case?

[Anonymous]

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@Anonymous wrote:

I remember you guys telling me about the Secure Share Loan on my first post over a year ago. I really questioned whether I needed it or if it'd be worth it. Looking back, I wish I had done it. Do you think it'd help if I did it now? I mean since I do plan on getting a car loan within a year or so?

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Here what I would do.  Start by adding two credit cards.  Your scores will go down (short term) when you do that.  If you find that one or more of your three FICO 8 scores are low enough that you might not get best terms on a car loan, then implement the SSL Technique (which remember involves paying the loan way down at month 1).  You can implement it a few months before you buy the car.  You'll get a substantial score boost which you will lose once the auto loan appears on your reports, but you'll have achieved your goal which is to secure best terms on that auto loan.