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How many credit cards?

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  • How many credit cards?

    I have 3 cards with very little balance on them, my question is, is it better to have more than that to give your score a boost? I don't plan on getting anymore but was just curious, maybe I have too many I don't know.

  • #2
    It is so hard to tell. Having 1 to 3 bank cards (branded major credit cards) is typically okay. The key is to maintain a very low balance (less than 30% at worst, less than 10% at best) to keep your utilization low and your score high. If you carry multiple accounts with a balance, that counts against you, but I don't know where the threshold lies.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


    • #3
      Short answer: Three is probably plenty.

      Longer answer: The FICO model takes into account many things. Credit mix is one thing. FICO wants to see a mortgage, an installment loan (like auto), and a few revolving accounts (credit cards). The exact ideal is not disclosed. I believe three is plenty. Another thing FICO takes into account is age of accounts. They average all your tradelines and the older that average is, the better your credit score will be. Well, opening new accounts is going to lower the average age of accounts sharply. Another aspect of your FICO score is utilization. Ideal utilization is about 1-9%. If you owe $100 on your credit card but the limit is $200, your utilization is 50%. Open up some more accounts and your total credit line is now $1000, while you owe the same $100. Utilization is 10%. Much better and your score will be higher.
      As so many of us got into BK because of credit card debt, I hope that utilization is not an issue for you so opening up new accounts won't improve your already-excellent utilization. Your credit mix is unlikely to improve by opening more revolving accounts. And your average age is going to drop. Overall, you'd do well to maintain your current FICO and more likely might drop a little. FICO is fickle, so there are no guarantees.
      Chapter 7, above median, no asset. Discharged with no UST involvement.

      Comment


      • #4
        The only reason I have 3 is to help my score. All of them are under 10%... Thanks

        Comment


        • #5
          I really don't know if this actually counts at all in the FICO scoring model.. but one thing I noticed as a "negative" on one of my reports is when your average CL is below $2k (across your CCs). Again, my guess is, if it has an affect at all, it's very minor.

          The only reason you'd need more cards is if you plan to carry some balance.. which we shouldn't be doing. Opening more cards would help your utilization ratio. So, there really is no reason to open up more credit cards. I have 3 and am pretty much done with applying.

          Although, I have one last CC that has < $500 CL. I keep it open only because there's no annual fee. In the next year, I'm hoping to land another "no annual fee" credit card with a much higher CL to replace this one.. although, I may just keep this line open to help my AAoA.
          Retained Lawyer: 04/2009 Filed: 09/2009 341 Meeting: 10/2009 Discharged: 12/2009 Asset: 05/2010 made asset Closed: 07/2013 after 47 long months

          Comment


          • #6
            well here's what i found out. it's GOOD to carry a balance they like to see you make timely payments NOT pay them off. they are checking to see if you can do this and then it pops up your scores. i watched carefully . when we got a wells fargo account i made sure and max'ed out the 3k. it had no interest for a year. but i paid if off in 6 months. for the past 3 years before that i was paying them off in full each month, my scores were not moving. so, when i closed banks like orchard, and one other of our very first cards we rec'd after our bk, i opened more legit companies like cap one and wells fargo i utilized the no interest options, OH! and also my best buy card it always gives you options for no interest payment on certain purchases. well, when i started do that this past year i found my credit scores jumped up into the middle and most high 700s. i just checked it out because i'm not getting all these loan offers, with large amounts. also offers for mortgages from boa, wells fargo and quicken loans!
            8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

            Comment


            • #7
              All 3 of my cards have an annual fee, I keep getting an offer from Capitol One with no fee. I really don't want a 4th card if it wont help my credit but I do like the no annual fee, would it hurt my credit to close an account and add a new one?

              Comment


              • #8
                it is said that it does effect your credit when you close an account. but orchard bank in one year never reported us and i offed them. we use CASH most of time with debit cards. however, when for example i pay for a service like plumper, or getting the car fixed i use the charge in case i have to stop payments. our debt card they do it, but not to the extent of the CC companies. i can dispute something easier.
                8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

                Comment


                • #9
                  We put the electric bill on our credit card, wait until the statement date closes, then pay it off in full. That way revolving activity shows on on our CR but it is also paid off with no interest going forward each month.
                  Filed Joint, No Asset, > $100,000 Unsecured Ch.7 6/7/13 ~~ 341 Meeting 7/15/13 ~~ Discharged 9/16/13 !!

                  Comment


                  • #10
                    Originally posted by tobee43 View Post
                    well here's what i found out. it's GOOD to carry a balance they like to see you make timely payments NOT pay them off. they are checking to see if you can do this and then it pops up your scores. i watched carefully . when we got a wells fargo account i made sure and max'ed out the 3k. it had no interest for a year. but i paid if off in 6 months. for the past 3 years before that i was paying them off in full each month, my scores were not moving. so, when i closed banks like orchard, and one other of our very first cards we rec'd after our bk, i opened more legit companies like cap one and wells fargo i utilized the no interest options, OH! and also my best buy card it always gives you options for no interest payment on certain purchases. well, when i started do that this past year i found my credit scores jumped up into the middle and most high 700s. i just checked it out because i'm not getting all these loan offers, with large amounts. also offers for mortgages from boa, wells fargo and quicken loans!
                    I now agree with Tobee43 and the above statement.

                    I just pulled all three FICO scores, two went down and one went up. Nothing has changed in my reports, i checked them all. I have made my house, car and store card payments early, paid off the store card.

                    The reports stated as a new negative, credit card (Store card) shows no current activity, because I paid it off before the next billing cycle. The dip wasn't much, a few points (EQ and TU down and EX up), but a lower score is a lower score.

                    I have charged a few items and will spread out the payments over three months and see if that helps. I will let you know.

                    PG
                    Filed Chapter 7: Nov 2012, Discharged Feb 2013, Closed May 2014
                    Post-Discharge:EQ: 665, EX: 716, TU: 674 (All Fakos)
                    Current FICO Scores (1/1/15): Ex: 706, TU: 690, EQ: 676

                    Comment


                    • #11
                      It's not really a negative. It's just that Fico likes to see card use. Best utilization is somewhere between 1-10%. If your total available credit is $1000, $10 reporting would be 1%, which a lot of folks recommend. I played with it myself for awhile, and given no other changes, MY best scores were at 4%, but everyone is different. I don't pay that much attention to it anymore.

                      Comment


                      • #12
                        Originally posted by tigerman View Post
                        All 3 of my cards have an annual fee, I keep getting an offer from Capitol One with no fee. I really don't want a 4th card if it wont help my credit but I do like the no annual fee, would it hurt my credit to close an account and add a new one?
                        It will temporarily hurt your FICO score because the new account will lower your average age. The effect is likely to be minimal.

                        unsolicited advice: I'd get rid of those annual fee cards posthaste. No reason at all to pay an annual fee. Go secured if you need to, but get rid of them.
                        Chapter 7, above median, no asset. Discharged with no UST involvement.

                        Comment


                        • #13
                          Originally posted by TXskyblue View Post
                          unsolicited advice: I'd get rid of those annual fee cards posthaste. No reason at all to pay an annual fee. Go secured if you need to, but get rid of them.
                          Unless those old cards are actually what are giving yu a good Average Age of Accounts (AAoA). I have an old low limit card that I have not closed because it is the oldest card that I have. It's a tough choice.
                          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                          Status: (Auto) Discharged and Closed! 5/10
                          Visit My BKForum Blog: justbroke's Blog


                          I am not an attorney. Any advice provided is not legal advice.

                          Comment


                          • #14
                            secured no fee- MANY years- line of $400, interest rate 9.9% ( credit union)

                            (re-affirmed this in my chapter 7- late 2013 discharge)


                            then in January I got no fee visa line $500 (? bank)
                            and no fee MC $2000 (cap1)
                            and no fee Business visa $1000 (cap1) , the business card has 1% rebate.

                            =============================
                            So until the other day $3500 limit- and $400 (secured) for $3900 limit

                            =============================

                            My total balance is $800

                            This week I got approve for visa(cap1) $2000 $39 fee, but no interest until Jan 2015.



                            All 4 (unsecured) CREDIT card interest rates are 23-25%,



                            So this makes 5- the oldest card (min 2009) is a secured card of $400.

                            If I closed that out- it would leave $400 that I owe. But I don't want to hurt my score.

                            The 2 capital one cards told me- that after 6 months I would see $500 credit line increase.

                            I have a mortgage- I have never-ever had a car payment, dept store or gas card.

                            I get a tax refund July 2- (real estate) of $650. (I pondered zapping my credit card balance- however I need to make a trip that will cost $240)

                            Since I got the new actual credit in January- I can not say my spending has increased. I shop at thrift stores- aldis, discount places. I keep my bills as low as I can. I wont say- there will never be temptation- but....

                            BTW_ the entire goal of filing chapter 7- was to be able to move to a new house where I could get a mortgage. I have a perfect payment record with the PHFA (State FHA), now entering my 8th year at this address.

                            I am a portion of a year into the 2 years - as I was discharged in late 2013.

                            I sort of like having more then one institution, in case the computer goes down- and I am out of state and need an emergency car repair.
                            .................................................. .................................................. ........
                            One way I feel I am making a mistake is the unsecured credit card fees are too high
                            .................................................. .................................................. ......................



                            Maybe someone can offer input--- help
                            Last edited by anykey; 04-17-2014, 07:29 AM. Reason: clarity
                            Discharged- pro se- chapter 7~!

                            Comment


                            • #15
                              Originally posted by anykey View Post
                              I get a tax refund July 2- (real estate) of $650. (I pondered zapping my credit card balance- however I need to make a trip that will cost $240)
                              Absolutely pay down as much of your credit card debt as you can!
                              Originally posted by anykey View Post
                              Since I got the new actual credit in January- I can not say my spending has increased. I shop at thrift stores- aldis, discount places. I keep my bills as low as I can. I wont say- there will never be temptation- but....
                              ... but you are carrying $800 in credit card debt.

                              Originally posted by anykey View Post
                              I sort of like having more then one institution, in case the computer goes down- and I am out of state and need an emergency car repair.
                              Credit cards should not be your emergency fund.

                              Originally posted by anykey View Post
                              One way I feel I am making a mistake is the unsecured credit card fees are too high
                              Since you don't have annual fees on most of your cards, I assume you mean that the interest rates are too high. If you weren't carrying a balance, that wouldn't be an issue. You are making a mistake by carrying $800 in credit card debt and by maxing out your secured card (at least I'm assuming it is maxed out since you say closing it will cost you $400).

                              Originally posted by anykey View Post
                              Maybe someone can offer input--- help
                              Get that $800 paid down as soon as you can. Then, never use a credit card to pay for anything that you can't pay for with cash. Build a savings so that you don't have to rely on your credit cards in an emergency.

                              I would cancel that most recent card rather than pay the annual fee (maybe wait until you have your balance paid down so that your overall utilization is as low as possible). That will leave you with 3 unsecured cards and 1 secured card, all with no fees. That is plenty of credit cards. Use them sparingly and pay them off every month. If you believe the theory that you have to carry a balance every month*, then make that balance extremely low and always have savings that exceed your credit card balances. For best results, never exceed 10% utilization on any one card or on all cards.

                              * I don't believe that theory because the credit card companies report your balances as of your statement date, so your credit report will still show balances even if you pay your cards off the day after the statement comes out. Experian says the same thing: http://www.experian.com/blogs/ask-ex...credit-scores/
                              LadyInTheRed is in the black!
                              Filed Chap 13 April 2010. Discharged May 2015.
                              $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                              Comment

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