top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

4 Credit Cards???

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    4 Credit Cards???

    I have 3 credit cards with credit limits of 2000, 2500 and 400 that I got in Oct and Nov after my discharge on 10/7. THe first 2 were easy to get in Oct but in Nov I was denied 3 times before I picked the one with the 400 credit limit (an annual fees lol). My bank (Chase) just told me on their app that I am preapproved for a credit card. I know it is stated here that 3 is optimum and I don't need more credit I just use the 3 now just to build credit but I was thinking that have a Chase credit card might help me in the future getting bigger loans from Chase such as car, boat or mortgage that I might need in the future.
    Is there a downside to getting a 4th credit card?

    Is my logic flawed that paying a Chase credit card off monthly will help build my credit relationship with Chase? I had some unsecured debts in my first filing for Bk in 2010 that were written off but they allowed me to keep my checking account with them (that I keep above 10K). I also had a mortgage with Chase long before that was sold to another bank during bankruptcy.

    #2
    I don't think it matters so long as they aren't all reporting a balance. Try to use the AZEO method. Paying off your credit card entirely every month, without revolving "something" less than 9% once in a while, does not show that you can manage revolving debt. This is why, for "high" FICO achievers, there is a penalty for having all of your bankcards reporting $0 in any given month.

    Having an overall cushion for your credit is always a good thing. Your other cards are relatively low so if you needed to charge $2,000 on something you'd either be maxed out on one, or using 80% of the other. For that reason, I believe people should have at least one $5,000 card in their wallet. This $5K card could be a secured card or an unsecured card.

    Do you know what creditors do when you maintain a $0 balance for months? You get what's known as an AA or adverse action. My score didn't drop and went up. I had been a customer of FNBO for 6 years. They closed my account because "I didn't use it." This is what credit card companies do when the economy is bad and they're trying to stave off a run-up of charges in a pinch. It's better to revolve one of your cards each month and stagger that amongst the cards. Also don't revolve more than 8% and you'll maximize your score.
    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

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment


      #3
      A few comments:
      • Having 3 cards is considered the minimum for optimal scores; adding another card won't really do much for your scores except may depress them for a bit because of the additional hard pull on your credit and the new credit line on your reports.
      • As I understand it, getting a card from Chase will not help you when it comes to an auto loan as there appears to be a lot of anecdotal evidence indicating completely separate and distinct underwriting groups.
      Latent car nut.

      Comment


        #4
        I'll add to what shipo wrote as well. Having installment debt is a better barometer for a vehicle loan. This is why the FICO score blesses those with an open installment loan. Please look at shipo's rebuilding credit thread to look into a SSL (share secured loan) and do the steps exactly as shown. You want it to show on your credit report for 24-36 months without having to make but one payment at the beginning, to pay it down below 9% after it first bills, and the last payment or two won't be until the 24-month or 36-month mark!

        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

        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

        Comment


          #5
          Thanks again! Chase gave me pre approvals then they disappeared for a week (my scores seem to be wavering up and down) then when it reappeared it included preapproval for 2 cards (9K the other 10K) and vehicle loan up to 66K. I took the 9K card because it has no annual fee and am awaiting it to arrive in the mail. I have one more question...

          Is the less than 9% of the available balance I should stay under for that for that particular card (ex. $1000 card balance below $90) or available balance for all the cards combined ($1000 $2000 $3000 balance on one card less than $540)?

          Comment


            #6
            Originally posted by Johnworker1 View Post
            Thanks again! Chase gave me pre approvals then they disappeared for a week (my scores seem to be wavering up and down) then when it reappeared it included preapproval for 2 cards (9K the other 10K) and vehicle loan up to 66K. I took the 9K card because it has no annual fee and am awaiting it to arrive in the mail. I have one more question...

            Is the less than 9% of the available balance I should stay under for that for that particular card (ex. $1000 card balance below $90) or available balance for all the cards combined ($1000 $2000 $3000 balance on one card less than $540)?
            Both, there are two different metrics, one for individual accounts, and a second for total credit limit.

            If you are trying to improve your scores, the best model you can use is to keep all cards reporting a $0.00 balance every month EXCEPT one; this is known as AZEO (All-Zero Except One), and for the one card reporting a balance, it should be a trivial balance of under $100.00.
            Latent car nut.

            Comment


              #7
              So, as if to illustrate my point above about playing the AZEO game instead of the AZ (All-Zero) game, all of my revolving accounts were reporting $0.00 balances earlier this month, and just like clockwork, all three of my FICO 8 scores dropped, here's one of the reports I got when it happened:
              Click image for larger version  Name:	Drop-from-777.png Views:	0 Size:	35.9 KB ID:	1036564

              Saturday one of my Chase cards reported a small balance and my FICO 8 score returned to where it was 8 days ago:
              Click image for larger version  Name:	Return-to-777.png Views:	0 Size:	38.0 KB ID:	1036565

              The moral of the story, if one is applying for new credit, regardless of whether it is another credit card, an auto loan, or a mortgage, playing the AZEO game for at least a month or two can make a significant difference in your FICO scores.
              Latent car nut.

              Comment


                #8
                Excellent Illustration. I found out the hard way which is why I will never do that again.

                Is it important to rotate each card a month which has the <9% balance or it doesn't matter as long it is one credit card.

                Comment


                  #9
                  I rotate them to avoid getting them close for not using them. My FNBO Visa was summarily cancelled because I hadn't made a charge in 2 years on a no-annual fee card. I also had Capital One do it to me twice. I would say at least once a year or maybe every six months to sprinkle some love on the other cards. Let them know that you are alive.
                  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

                  Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                  Comment


                    #10
                    Originally posted by Johnworker1 View Post
                    Excellent Illustration. I found out the hard way which is why I will never do that again.

                    Is it important to rotate each card a month which has the <9% balance or it doesn't matter as long it is one credit card.
                    I typically only use one card for my "reporting card", if you use a card and never let it report a balance, that doesn't qualify you for closure for lack of use; closure only happens when you go a year or more without making a single charge. I have two or three cards which are several years old and have never once had a balance reported.
                    Latent car nut.

                    Comment


                      #11
                      Follow up on my "All-Zero" penalty which hit two weeks ago; as mentioned above, my TDCash card which usually reports a small balance every month reported zero this month. As also mentioned, I simply adjusted my payment for my Chase Freedom Unlimited to be short about $20, and that balance got reported last Saturday. Today I woke up to the following graph of my FICO 8 scores:
                      Click image for larger version  Name:	Graph-777.png Views:	0 Size:	34.9 KB ID:	1036600‚Äč

                      As predicted, my scores recovered back to where they were before I went All-Zero, errr, with one exception, Equifax somehow decided to throw an extra point in there; not sure why.
                      Last edited by shipo; 03-21-2024, 09:37 AM.
                      Latent car nut.

                      Comment


                        #12
                        Now there's the proof we all need.
                        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

                        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                        Comment

                        bottom Ad Widget

                        Collapse
                        Working...
                        X