Is it bad to have only one credit card?

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Joined: Fri Aug 31, 2012 12:55 am
Location: Minneapolis/Minnesota

Is it bad to have only one credit card?

Postby iloveMNtwins » Fri Aug 31, 2012 1:18 am


I am new to the forum. I recently graduated from college and start working in September. I have 2 Credit Cards and Cancelling 1. Will this hurt my credit score?

I applied for 2 credit cards recently:

  1. Chase Sapphire Preferred Card (95$ annual fee waived first year. 40,000 bonus points if $3,000 spent within first 3 months)
  2. Chase Freedom Card (no annual fee). I was already approved for the Chase Freedom card with a $2,000 CL.
For the Sapphire preferred card, my plan is to spend $3,000 within the first 3 months then cancel it before it comes time to pay for the annual fee. I plan on keeping the Chase Freedom card (no annual fee) long term to build my credit score and keep it under 20% credit utilization.

So, if I keep my credit utilization for the Chase Freedom low, and the credit utilization for the Chase Sapphire Preferred Card relatively high since I will need to spend at least $1,000 per month to meet $3,000, if I cancel the Preferred Sapphire Card within one year, will it hurt my credit score since my credit utilization will actually be going down by canceling that card?

For example, lets assume my CL for both cards are $2,000. If I spend $100/$2000 on average per month on the Chase Freedom and $1,000/$2,000 per month on average for the Preferred Sapphire card, then my credit utilization will go from 27.5% (1100/4000) to 5% (100/2000). So actually this should not hurt my credit score?

Please let me know if my logic is correct. Thank you in advance!

Best Regards,

Green Member
Green Member
Posts: 3
Joined: Mon Sep 03, 2012 2:42 pm
Location: Canada

Postby MoneyTalks719 » Tue Sep 04, 2012 3:37 pm

The only advantage of keeping both cards is that if you keep that card low you credit vs debt ratio will be better because you will have more available credit. That being said, with the $95 per year charge I don't think it is worth it.

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