A couple of Questions

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eapa507
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A couple of Questions

Postby eapa507 » Sun Mar 20, 2016 8:53 pm

This is my first post here since finding the forum a few days ago. I am new to using credit cards for rewards. My husband and I have good credit and a long varied history, but we just didn’t know how much cash back we could have been earning over the years with the right cards. I am trying to understand FICO scores and what effects them, and how much I need to be worried about my score. I remember 20 years ago when we bought our home the mortgage lender congratulated us on our great credit report, but I don’t remember the score. My husband and I have just always used our debit cards for the most part, and used our credit cards for the occasional major purchases over the years mostly paying them off within 6 months to a year.

About 4 months ago a friend mentioned to me that I should be using my credit cards to earn rewards and suggested the Discover card. I ended up applying for it and the Capital One Quicksilver. I really like the Discover card and I am using it for all of our monthly expenses as it is double cash back until November. I noticed my FICO score on the statement, and I am a little confused about why my score varies depending on where I am looking at it. On my Discover statement it is 765 and on my Chase Slate it is 780. Six months ago my score was 805 on the Chase, but I put $12,000 on my BOA Am EX card at 0% to pay for some major dental work and I noticed it dropped 25-35 points. I paid off the remaining $9,800 balance on February 24th, but it is still showing. We PIF all of our credit cards every month with the exception of the occasional charge that we pay off quickly as we did with the BOA.

I learned about the American Express Blue Card Preferred on this site, and I realize now that it would be a better fit for our spending habits as we spend the most at groceries store and on gas. I am wondering if my BOA AM EX Card could be converted.
Does it matter if my score is 780 or 805 as far as getting the lowest interest rate on refinancing my student loans? I am paying 6% and I would like to look into lowering that on the $22,000 I have left to pay. I would love to have the more experienced members look at my credit cards listed below and give me some advice on which I should keep so that I can maximize rewards while keeping my score up. I would like to end up with 2-4 so that I can maximize rewards, but I don’t want to do anything that would drastically lower my score. Thank you.

USAA Master card –Authorized User (Husbands Card) 16 yrs - $12,000 CL…. $0 balance
Capitol One Platinum- 15 yrs $8500 CL…. 0$ balance
Capitol One Quicksilver- 4 months- $10,000 CL … $576 balance PIF every month
BOA Am EX- 11 yrs- $23,500 CL… $0 balance
Chase Slate- 10-11yrs- $8,500 CL…$0 balance
Discover- 4 months- $8,500 CL… $3697 balance PIF every month


Elijahmex
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Re: A couple of Questions

Postby Elijahmex » Mon Mar 21, 2016 9:13 am

I am not an experienced member but I can tell you this.

Six months ago your score was 805 & four months ago you added two accounts Discover and Cap1 right? Every time you apply for a new card they pull a HP which lowers your score. So you had at least two HPs. It is also my understanding that your score also decreases (not that significantly for you since you have several CCs and a long credit history) as your AAoA (average age of accounts) also decreases. Those of couple of reasons why your score decreased

The Amex BCE does sound like a good fit for you if you spend a lot on groceries and gas.

I'll let the more experienced members explain the rest
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eapa507
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Re: A couple of Questions

Postby eapa507 » Mon Mar 21, 2016 10:54 am

Elijahmex wrote:I am not an experienced member but I can tell you this.

Six months ago your score was 805 & four months ago you added two accounts Discover and Cap1 right? Every time you apply for a new card they pull a HP which lowers your score. So you had at least two HPs. It is also my understanding that your score also decreases (not that significantly for you since you have several CCs and a long credit history) as your AAoA (average age of accounts) also decreases. Those of couple of reasons why your score decreased

The Amex BCE does sound like a good fit for you if you spend a lot on groceries and gas.

I'll let the more experienced members explain the rest


Thank you for those insights Elijahmex. I think I am starting to understand a little better since finding this forum. Except for two auto loans my husband and I haven't applied for any new credit in 10 years. The discover and quicksilver 4 months ago are my first venture into using credit cards to maximize rewards.
The two HP when I applied for them are definitely showing, but it seems like that should be a small fraction of my score? I have never asked for a CLI, but maybe i should with my Discover. I think even though I PIF through auto pay my utilization is reported higher then 30% at the statement closing date. There have been some months when I have had over $6,000 in charges.

I never worried about my score until I started researching rewards CC. For some reason now that I started paying attention I want to keep it above 800. Is this even necessary? I have never been late with a payment in the past 20 years and don't have any negative statements on my CR. So should I just close accounts I don't want or need anymore and not worry about the hit? I don't need the Cap 1 venture or the Chase Slate. I would really rather have the Am Ex Blue cash preferred. Thanks.

Elijahmex
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Re: A couple of Questions

Postby Elijahmex » Mon Mar 21, 2016 2:17 pm

eapa507 wrote:
Elijahmex wrote:I am not an experienced member but I can tell you this.

Six months ago your score was 805 & four months ago you added two accounts Discover and Cap1 right? Every time you apply for a new card they pull a HP which lowers your score. So you had at least two HPs. It is also my understanding that your score also decreases (not that significantly for you since you have several CCs and a long credit history) as your AAoA (average age of accounts) also decreases. Those of couple of reasons why your score decreased

The Amex BCE does sound like a good fit for you if you spend a lot on groceries and gas.

I'll let the more experienced members explain the rest


Thank you for those insights Elijahmex. I think I am starting to understand a little better since finding this forum. Except for two auto loans my husband and I haven't applied for any new credit in 10 years. The discover and quicksilver 4 months ago are my first venture into using credit cards to maximize rewards.
The two HP when I applied for them are definitely showing, but it seems like that should be a small fraction of my score? I have never asked for a CLI, but maybe i should with my Discover. I think even though I PIF through auto pay my utilization is reported higher then 30% at the statement closing date. There have been some months when I have had over $6,000 in charges.

I never worried about my score until I started researching rewards CC. For some reason now that I started paying attention I want to keep it above 800. Is this even necessary? I have never been late with a payment in the past 20 years and don't have any negative statements on my CR. So should I just close accounts I don't want or need anymore and not worry about the hit? I don't need the Cap 1 venture or the Chase Slate. I would really rather have the Am Ex Blue cash preferred. Thanks.


Sure NP. This forum helped me tremendously. A year ago I was clueless about Credit, I pretty much learned everything I know right here.

I recently got a Discover card and the CSR told me I could ask for a CLI after the first three months. Sometimes they approve instantly & sometimes they do a soft/hard pull.
CapOne has been generous to me with CLIs, I have had 3 in the last 12 months. The general rule is that they only grant CLIs every 6 months but you've got nothing to lose as it won't affect your CS.

Like many told me told me, do not obsess over your CS. 800 is a nice goal but is it absolutely necessary? You'll get many different answers. For me I would say yes as I will probably be looking to buy a house in the near futur so I want the lowest rates possible. Just keep doing what you've been doing and you'll get back up there.
Personally I wouldn't keep utilization at 30%. I always make sure that by closing date im around 4-10%. That's just me though. Some people will tell you 30% is acceptable.

I have read that closing accounts can hurt your CS. However you've been in the game for 20 years so I wouldn't worry too much. I just wouldnt close them all at once. You might want to google it to get some more information..

And sorry I meant Amex BCP not BCE
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Vattené
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Re: A couple of Questions

Postby Vattené » Wed Mar 23, 2016 10:09 am

Welcome! Honestly, it sounds like your credit is in a really good position and you don't need to worry about your score at all. If your only anticipated credit needs for the foreseeable future are which credit cards to apply for to get the best rewards, you are golden. You should be able to get approved for any credit card you want. If you keep paying everything on time and don't let any negative items come into your credit profile, I would bet you can get approved for any credit product you want (within reason, of course - not a new million-dollar mortgage on a house if your income doesn't support it).

I don't have any experience with refinancing student loans, but generally being in the mid-700s will put you in the top tier of any lender and get you the best terms they offer. This is just one anecdote, but I think I was around 740 when I applied to finance a car about a year after graduating college. I was a little nervous about qualifying for the manufacturer's promotional low rate because I had only a few years of credit history and it ALL came from credit cards, but I qualified for their top credit tier no problem. About a year after that I also got a mortgage at the lowest rate offered, and my actual score was higher but definitely not 800.

If you are going to apply for refinancing, I'd make sure my utilization was under 10% to be safe and put my credit in as positive a light as possible, but if you're not applying for anything IMO there's really no benefit in manipulating utilization on a regular, ongoing basis. Having a score over 800 may be cool for bragging rights (I'm getting close and want to break 800 myself), but in reality it probably won't have any impact on you.

As for your varying credit scores, this is because the information is coming from different sources. Discover's score is from TU and Chase's is from EX. There are different versions of the FICO model, too. Discover uses FICO-8; I'm not sure what specific FICO Chase provides, but if it is a different version the score would be different even if they came from the same CRA. The dates when the scores are pulled matters, too, as info in your credit profile could change. So, even though you are getting a FICO, there are a lot of other variables and you shouldn't expect the numbers to be the same.

Finally, whether you should close accounts depends largely on personal preference. The history should stay on your profile for 10 years, so closed accounts still figure into account aging. You will have an immediate impact on utilization, however. Closing an account means losing some available credit, so your utilization will go up even if you have the same amount outstanding because it suddenly becomes a larger portion of what is available to you. The impact should be minimal, especially for someone with a well-established credit profile. If the accounts aren't of any value to you and you don't want to bother with monitoring them for fraud, I would just close them. Quicksilver and Discover seem like the ones that earn rewards and you will definitely want to keep. I'm not sure what BofA card you have, but BofA is the bank and it just uses the Amex network. You will have to apply for the BCP directly from Amex, as they are the issuing bank of the BCP. Again, I don't think you need to worry about getting approved, though. Will the $75 AF be worth it, and will you just use the BCP for groceries and gas? If so, if you want to maximize rewards you should apply for the BCP for gas and groceries and use Discover on everything else until the double cash back promo ends. Then, use Discover on categories and Quicksilver for everything else.



**edited because I mentioned an introductory offer I thought was publicly available for all new applicants, but it appears Amex is toying around with different introductory offers**
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

eapa507
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Re: A couple of Questions

Postby eapa507 » Thu Mar 24, 2016 10:35 pm

Vattené wrote:Welcome! Honestly, it sounds like your credit is in a really good position and you don't need to worry about your score at all. If your only anticipated credit needs for the foreseeable future are which credit cards to apply for to get the best rewards, you are golden. You should be able to get approved for any credit card you want. If you keep paying everything on time and don't let any negative items come into your credit profile, I would bet you can get approved for any credit product you want (within reason, of course - not a new million-dollar mortgage on a house if your income doesn't support it).

I don't have any experience with refinancing student loans, but generally being in the mid-700s will put you in the top tier of any lender and get you the best terms they offer. This is just one anecdote, but I think I was around 740 when I applied to finance a car about a year after graduating college. I was a little nervous about qualifying for the manufacturer's promotional low rate because I had only a few years of credit history and it ALL came from credit cards, but I qualified for their top credit tier no problem. About a year after that I also got a mortgage at the lowest rate offered, and my actual score was higher but definitely not 800.

If you are going to apply for refinancing, I'd make sure my utilization was under 10% to be safe and put my credit in as positive a light as possible, but if you're not applying for anything IMO there's really no benefit in manipulating utilization on a regular, ongoing basis. Having a score over 800 may be cool for bragging rights (I'm getting close and want to break 800 myself), but in reality it probably won't have any impact on you.

As for your varying credit scores, this is because the information is coming from different sources. Discover's score is from TU and Chase's is from EX. There are different versions of the FICO model, too. Discover uses FICO-8; I'm not sure what specific FICO Chase provides, but if it is a different version the score would be different even if they came from the same CRA. The dates when the scores are pulled matters, too, as info in your credit profile could change. So, even though you are getting a FICO, there are a lot of other variables and you shouldn't expect the numbers to be the same.

Finally, whether you should close accounts depends largely on personal preference. The history should stay on your profile for 10 years, so closed accounts still figure into account aging. You will have an immediate impact on utilization, however. Closing an account means losing some available credit, so your utilization will go up even if you have the same amount outstanding because it suddenly becomes a larger portion of what is available to you. The impact should be minimal, especially for someone with a well-established credit profile. If the accounts aren't of any value to you and you don't want to bother with monitoring them for fraud, I would just close them. Quicksilver and Discover seem like the ones that earn rewards and you will definitely want to keep. I'm not sure what BofA card you have, but BofA is the bank and it just uses the Amex network. You will have to apply for the BCP directly from Amex, as they are the issuing bank of the BCP. Again, I don't think you need to worry about getting approved, though. Will the $75 AF be worth it, and will you just use the BCP for groceries and gas? If so, if you want to maximize rewards you should apply for the BCP for gas and groceries and use Discover on everything else until the double cash back promo ends. Then, use Discover on categories and Quicksilver for everything else.



**edited because I mentioned an introductory offer I thought was publicly available for all new applicants, but it appears Amex is toying around with different introductory offers**


Thank you for adding your input Vanttene. I can't believe how much we have been missing out on earning cash back and rewards, and just ignorant about credit scores in general. It has been 20 years since we bought our house and we have just been in auto pilot paying our regular bills and only using the cards we got so many years ago when we had a larger purchase to make or were traveling. We had a case of fraud last year with my debit card and that scared me because the charges were hitting our checking account. Thankfully I keep a close eye on our account and caught it before too much damage was done. I decided at that point we probably shouldn't be using our debit cards for all of our purchases.

I have been reading this forum and researching what would be the smartest way to consolidate the cards we already have and apply for 1 or 2 others that would make good sense for us to have. So far I think I should ask to combine my old Cap 1 plat with the quicksilver that way I would increase the CL from $10,000 to $18,500 and just have the one account. Would I get to keep the age of the old account (16 yrs) on the quicksilver?
I think with the Chase Slate I could ask for a PC to the Freedom, but since I already have the Discover I am not sure how much that would really benefit us? Maybe this is the card that I should drop since I would really like to get the AM EX BCP. We spend on average $800 a month on groceries and $300 on gas, so the cash back would more than make up for the AF.

I don't think I will apply for any new cards until I get my student loan refinanced. I am really hoping to get that down to 2-3% so I can work on getting that paid off before my dh retires in 6 years. We are also planning to try and pay our mortgage off in that time frame.

I was doing some reading on the MY FICO sight and I was amazed at how many people have 15+ cc. I couldn't imagine keeping track of that many accounts. I am the type of person that likes to put as many bills as I can on auto payment and keep things as simple as possible. I was really shocked at how many people with lower FICO scores had so many cards and were calling every month for CLI. I have never actually asked for an increase lol ... I guess I have never really seen a reason to have that much credit available. I am guessing that if I asked I could have higher limits and I might ask for an increase on my Discover so I can keep my utilization low without having to make extra payments throughout the month.

Thanks again for the advice.

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Vattené
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Re: A couple of Questions

Postby Vattené » Fri Mar 25, 2016 12:01 pm

You are welcome! As long as you don't let credit cards impact your spending they can provide a lot of value. I used a use a debit card everywhere too - it was convenient and if the money is in the bank there's nothing to worry about - but I think the added fraud protections of credit cards is enough to make them worthwhile.

Moving some limit from the Cap One Platinum to the Quicksilver before closing is a good idea. The Quicksilver is the newer account, and that wouldn't change; it would be similar to getting a CLI on the account. Even if you close the Platinum account, though, realize the history would still report for 10 years but it would just show as a closed account. I don't know if you would want two Quicksilver accounts, but you may be able to PC the Platinum to a Quicksilver and keep both accounts open and aging. It may be possible to PC the Platinum to a second Quicksilver, move some of the first Quicksilver's limit over, and close the first, younger Quicksilver account. All of these possibilities will depend on Cap One's policies and what they will allow you to do.

If you have been reading up some you may already know this, but is what you are calling grocery shopping at merchants coded as grocery stores? It's common for people to think Walmart or Target may get them 6%, but these are coded as something else (like General Merchandise, or something like that) and only earn 1%. Just a caveat to be aware of before applying. If you can get student loans refinanced, that is definitely a priority over credit card rewards and I'd try to take care of that before adding any inquiries and new accounts, as you've planned.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

eapa507
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Re: A couple of Questions

Postby eapa507 » Sat Mar 26, 2016 8:56 am

Vattené wrote:You are welcome! As long as you don't let credit cards impact your spending they can provide a lot of value. I used a use a debit card everywhere too - it was convenient and if the money is in the bank there's nothing to worry about - but I think the added fraud protections of credit cards is enough to make them worthwhile.

Moving some limit from the Cap One Platinum to the Quicksilver before closing is a good idea. The Quicksilver is the newer account, and that wouldn't change; it would be similar to getting a CLI on the account. Even if you close the Platinum account, though, realize the history would still report for 10 years but it would just show as a closed account. I don't know if you would want two Quicksilver accounts, but you may be able to PC the Platinum to a Quicksilver and keep both accounts open and aging. It may be possible to PC the Platinum to a second Quicksilver, move some of the first Quicksilver's limit over, and close the first, younger Quicksilver account. All of these possibilities will depend on Cap One's policies and what they will allow you to do.

If you have been reading up some you may already know this, but is what you are calling grocery shopping at merchants coded as grocery stores? It's common for people to think Walmart or Target may get them 6%, but these are coded as something else (like General Merchandise, or something like that) and only earn 1%. Just a caveat to be aware of before applying. If you can get student loans refinanced, that is definitely a priority over credit card rewards and I'd try to take care of that before adding any inquiries and new accounts, as you've planned.


Thanks for your great advice Vattene. The student loans are definitely my first priority. I will most likely start shopping for a good refinance offer in May and will think about applying for the AM EX BCP in January.

My plan is to put all groceries and gas on the BCP except when Discover has gas at 5%. I will also use the Discover for Amazon at 5%. I avoid Walmart and never shopped at Target. 98% of my grocery spending is at actual grocery stores.



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