How many credit cards should I have?
Author: NAT
Joined: 28 Sep 2004
Posts: 1
Posted: Tue Sep 28, 2004 7:01 pm
Post subject: How many credit cards should I have?
I just got finished paying off my credit card debt and would like to know how many of the credit cards I currently have to keep. I am aware that the amount of available credit will affect how much money I will be approved for when I go for a mortgage. However, I need more detail on which cards are the best to hold onto and how many to hold onto. Should I lower my credit limits on certain cards and keep those or is it better to just cancel those cards with high credit limits? Any and all advice would be greatly appreciated as I am thinking about buying a home.
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Author: stevejk
Joined: 22 Sep 2004
Posts: 8
Location: Florida
Posted: Wed Sep 29, 2004 6:50 am
First, congratulations on getting out of credit card debt! I'm sure one of the local experts can give you a better answer, but here's my $0.02 worth based on what I've read. The longer the account is open, the better. Annual fees notwithstanding, keep the account(s) you have had the longest. The less of your credit limit you use, the better. For example, if you have a $100 balance on a card with a $200 limit, you are using 50% of your available credit, which looks bad on your FICO score. If you have a $100 balance on a card with a $1000 limit, you are using 10% of your available credit, which looks better on your FICO score. I used to think, based on what my father told me back in the day, that high credit limits are bad because lenders look at that as how deep into debt you can get yourself on a moment's notice. However, I've since read that the limit itself is not as bad as the percentage of use of that limit. I don't know how many cards is the optimal number, but I'd be safe to say two is the minimum. One as the primary and one as a backup/emergency.
Steve
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Author: Board Monitor
BOARD MONITOR-ADMINISTRATOR
Joined: 05 May 2003
Posts: 490
Posted: Wed Sep 29, 2004 7:57 am
Good advice Steve and welcome to the board! Nat, check with you motgage lender about your question. Generally closing out accounts will hurt your FICO, but some mortgage lenders do view excessive open lines of credit as a liability. I wouldn't close out the credit card accounts unless the lender that you decide to use suggests that you do so (presumably so that you could qualify for a better mortgage rate). Let us know how things turn out!
Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH 501-301-8474 FX
View our latest credit card ratings!
Author: mouse
Joined: 29 Jul 2004
Posts: 132
Posted: Wed Oct 13, 2004 8:30 pm
As many as it takes...NEVER ONLY ONE OR TWO!!!
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Author: Board Monitor
BOARD MONITOR-ADMINISTRATOR
Joined: 05 May 2003
Posts: 490
Posted: Thu Oct 14, 2004 7:02 am
Mouse, Great to see you around again! Hope all is well you way...
Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH 501-301-8474 FX
View our latest credit card ratings!
Author: guessindigo
Joined: 19 Sep 2004
Posts: 51
Posted: Fri Oct 15, 2004 10:35 am
First off, Do NOT close credit accounts that you have paid down or PIF. Secondly, NEVER voluntarily lower your credit lines. In addition, I would seek another lender who advised you to do do the 2 things I mentioned above. Not all mortgage lenders are the same. After you close, then you can sort which cards you want to keep based on your own criteria (rewards, low rate, high credit line, etc.) Good luck
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Author: bodeh6
Joined: 29 Nov 2004
Posts: 13
Posted: Mon Nov 29, 2004 4:48 pm
I am 22 and have had credit since 16 w/parents. Canceled that Capitol One Visa at 18 and got own. I used to have 5 but cut back to 3 cards. They are Providian Gold Visa. Opened June 2001, $8100 CL. Amex Blue. Opened Dec 2001, $6000 CL. Citi Dividend Platinum Select Mastercard. Opened Apr 2004, $6000 CL. I had 2 MBNAs (Visa and Mastercard) closed because never used. I liked the Providian because of the Premium Points got 1% to get gift certicates. Now mainly use Citi because of the 5% cash back on gas/drugs/groceries (right now 6%) and 1% every else (right now 2%). Use Amex for Costco. Have Nextel bill auto paid to Providian so that it can stay active. Since I pay off the balances at the end of each month, interest/fees have never been a problem. Each has a good credit limit. I believe that you should have a max of 3 major cards. Do not waste your time with department store/gas/branded cards. They offer incentives for a few months then go away or are diminished. Sure getting $15 off $100 jeans just for opening a department store card is inviting but do not take the bait.
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Author: guessindigo
Joined: 19 Sep 2004
Posts: 51
Posted: Mon Nov 29, 2004 8:17 pm
You should have about 10 IMHO
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Joined: 28 Sep 2004
Posts: 1
Posted: Tue Sep 28, 2004 7:01 pm
Post subject: How many credit cards should I have?
I just got finished paying off my credit card debt and would like to know how many of the credit cards I currently have to keep. I am aware that the amount of available credit will affect how much money I will be approved for when I go for a mortgage. However, I need more detail on which cards are the best to hold onto and how many to hold onto. Should I lower my credit limits on certain cards and keep those or is it better to just cancel those cards with high credit limits? Any and all advice would be greatly appreciated as I am thinking about buying a home.
View our latest credit card ratings!
Author: stevejk
Joined: 22 Sep 2004
Posts: 8
Location: Florida
Posted: Wed Sep 29, 2004 6:50 am
First, congratulations on getting out of credit card debt! I'm sure one of the local experts can give you a better answer, but here's my $0.02 worth based on what I've read. The longer the account is open, the better. Annual fees notwithstanding, keep the account(s) you have had the longest. The less of your credit limit you use, the better. For example, if you have a $100 balance on a card with a $200 limit, you are using 50% of your available credit, which looks bad on your FICO score. If you have a $100 balance on a card with a $1000 limit, you are using 10% of your available credit, which looks better on your FICO score. I used to think, based on what my father told me back in the day, that high credit limits are bad because lenders look at that as how deep into debt you can get yourself on a moment's notice. However, I've since read that the limit itself is not as bad as the percentage of use of that limit. I don't know how many cards is the optimal number, but I'd be safe to say two is the minimum. One as the primary and one as a backup/emergency.
Steve
View our latest credit card ratings!
Author: Board Monitor
BOARD MONITOR-ADMINISTRATOR
Joined: 05 May 2003
Posts: 490
Posted: Wed Sep 29, 2004 7:57 am
Good advice Steve and welcome to the board! Nat, check with you motgage lender about your question. Generally closing out accounts will hurt your FICO, but some mortgage lenders do view excessive open lines of credit as a liability. I wouldn't close out the credit card accounts unless the lender that you decide to use suggests that you do so (presumably so that you could qualify for a better mortgage rate). Let us know how things turn out!
Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH 501-301-8474 FX
View our latest credit card ratings!
Author: mouse
Joined: 29 Jul 2004
Posts: 132
Posted: Wed Oct 13, 2004 8:30 pm
As many as it takes...NEVER ONLY ONE OR TWO!!!
View our latest credit card ratings!
Author: Board Monitor
BOARD MONITOR-ADMINISTRATOR
Joined: 05 May 2003
Posts: 490
Posted: Thu Oct 14, 2004 7:02 am
Mouse, Great to see you around again! Hope all is well you way...
Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH 501-301-8474 FX
View our latest credit card ratings!
Author: guessindigo
Joined: 19 Sep 2004
Posts: 51
Posted: Fri Oct 15, 2004 10:35 am
First off, Do NOT close credit accounts that you have paid down or PIF. Secondly, NEVER voluntarily lower your credit lines. In addition, I would seek another lender who advised you to do do the 2 things I mentioned above. Not all mortgage lenders are the same. After you close, then you can sort which cards you want to keep based on your own criteria (rewards, low rate, high credit line, etc.) Good luck
View our latest credit card ratings!
Author: bodeh6
Joined: 29 Nov 2004
Posts: 13
Posted: Mon Nov 29, 2004 4:48 pm
I am 22 and have had credit since 16 w/parents. Canceled that Capitol One Visa at 18 and got own. I used to have 5 but cut back to 3 cards. They are Providian Gold Visa. Opened June 2001, $8100 CL. Amex Blue. Opened Dec 2001, $6000 CL. Citi Dividend Platinum Select Mastercard. Opened Apr 2004, $6000 CL. I had 2 MBNAs (Visa and Mastercard) closed because never used. I liked the Providian because of the Premium Points got 1% to get gift certicates. Now mainly use Citi because of the 5% cash back on gas/drugs/groceries (right now 6%) and 1% every else (right now 2%). Use Amex for Costco. Have Nextel bill auto paid to Providian so that it can stay active. Since I pay off the balances at the end of each month, interest/fees have never been a problem. Each has a good credit limit. I believe that you should have a max of 3 major cards. Do not waste your time with department store/gas/branded cards. They offer incentives for a few months then go away or are diminished. Sure getting $15 off $100 jeans just for opening a department store card is inviting but do not take the bait.
View our latest credit card ratings!
Author: guessindigo
Joined: 19 Sep 2004
Posts: 51
Posted: Mon Nov 29, 2004 8:17 pm
You should have about 10 IMHO
View our latest credit card ratings!
posted by CardRatings.com at 10:15 AM
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