Post by greencrayon on Apr 26, 2015 18:56:03 GMT -5
So now that I'm single, I'm trying to get more involved with my finances. I am not that up to date on how credit cards affect your credit, how many a person should have, how to best utilize the points or rewards, etc. I was wondering if someone could point me in the direction of an article or something to help explain.
Right now, I have: - the Costco Amex which I will be closing this year. It's joint between my husband and I. (12k limit) - sams MasterCard (6) - citi dividend card (6) - Citibank Sears card (I haven't used it in 4 years) (idk limit) - target redcard (idk limit) - discover it (4)
I basically just use the cash rewards to pay off the card. I don't travel anywhere so I don't need miles. Is this too few? Too many? I pay off every month 98% of the time.
Post by illgetthere on Apr 27, 2015 16:41:23 GMT -5
It's definitely not too few. I wouldn't close any more so you don't hurt your credit, but there's not a need for more. Paying your cards off in full 100% of the time should be goal #1. After that, I'd pick one card to use unless a specific card offers promotions for certain purchases.
keeping balances low and paying on time are the greatest factors for improving your credit. Having old lines and not applying for too many too recently are other (smaller) factors
How many - I think you're okay with 6-7 like you have now. I have about that many with a high credit score. I think if you apply for 6-7 cards at the SAME TIME that would be a problem because you'd have 6-7 credit inquiries at the same time. Those inquiries can ding your score a little bit. CLOSING credit cards outright can hurt your score way more, since it makes your USED credit vs. AVAILABLE credit ratio smaller. You want a big ratio. i.e. Putting $3k/month on credit cards when you have $5k credit available is not as good as putting $3k/month on credit cards when you have $15k credit available. This is true even if you pay your card in full every month.
Points/Rewards - Assuming you pay in full every month I've heard the Citi card with 2% cash back on everything is the best all-around card. fwiw I don't have this one because we're doing mileage accumulation on some other cards.
Closing that 12k card may hurt your score since it might alter that ratio. But instead of opening a new card to get your ratio higher, it might be worth asking current cards for a credit increase. This is only true if you pay your cards off every month, and on time. Paying late definitely dings your credit.
How many - I think you're okay with 6-7 like you have now. I have about that many with a high credit score. I think if you apply for 6-7 cards at the SAME TIME that would be a problem because you'd have 6-7 credit inquiries at the same time. Those inquiries can ding your score a little bit. CLOSING credit cards outright can hurt your score way more, since it makes your USED credit vs. AVAILABLE credit ratio smaller. You want a big ratio. i.e. Putting $3k/month on credit cards when you have $5k credit available is not as good as putting $3k/month on credit cards when you have $15k credit available. This is true even if you pay your card in full every month.
Points/Rewards - Assuming you pay in full every month I've heard the Citi card with 2% cash back on everything is the best all-around card. fwiw I don't have this one because we're doing mileage accumulation on some other cards.
Closing that 12k card may hurt your score since it might alter that ratio. But instead of opening a new card to get your ratio higher, it might be worth asking current cards for a credit increase. This is only true if you pay your cards off every month, and on time. Paying late definitely dings your credit.
I have a credit score of 835 and got turned down for that card. I think it's fairly elusive (their reason was I have "too many cards"... I have five cards, only use two, and pay my balance off in full each month.)
Anyway. Pay the balance off in full each month (one month with interest can wipe out any points you've made). I love to travel, so I have one that I use for everything because it has the best rewards. I have a "backup" for when I need it.
A lot depends on what you want going forward. If you "need" a good score in the near future (upcoming loan), try to stay steady (but definitely drop any shared cards, or, if that one is your oldest, see if you can get it set to be yours alone, that's what I did with one of mine).
I wouldn't get more cards just to get more cards. If you have a mastercard and a visa, you're pretty much covered. I would just pick the card with the best (for you) rewards, and use that one pretty much exclusively to max out those rewards.
dragon's breath that's crazy!!! now I kinda want to apply just to see if they'll give me one! I *only* have a score of 820 though, haha, so maybe I'd be too much of a risk for them
dragon's breath that's crazy!!! now I kinda want to apply just to see if they'll give me one! I *only* have a score of 820 though, haha, so maybe I'd be too much of a risk for them
This is strange. I just applied for this card (I think we're talking about the same one, 1%cash back on all purchases and another 1% as you pay) last week. It doesn't require you to pay in full, just on time and the minimum due, and you earn points as you go. I was kind of worried about applying because I had read you kind of needed amazing credit. I have always had good credit, but I don't think I've ever seen a score over 760, and it's currently in the 740s. I was approved just fine. Maybe they prefer to lend to people who are a little "riskier" .
dragon's breath that's crazy!!! now I kinda want to apply just to see if they'll give me one! I *only* have a score of 820 though, haha, so maybe I'd be too much of a risk for them
This is strange. I just applied for this card (I think we're talking about the same one, 1%cash back on all purchases and another 1% as you pay) last week. It doesn't require you to pay in full, just on time and the minimum due, and you earn points as you go. I was kind of worried about applying because I had read you kind of needed amazing credit. I have always had good credit, but I don't think I've ever seen a score over 760, and it's currently in the 740s. I was approved just fine. Maybe they prefer to lend to people who are a little "riskier" .
Yeah, it's weird, I have no idea what their criteria is. I just decided they suck and I'll stick with my Barclay's Travel Rewards card, and it's their loss
Glad you were accepted, it seems like a good deal.