Is it better to have more or less?

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shippy
 
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Is it better to have more or less?

Postby shippy » Wed Nov 20, 2013 10:09 am

Hi guys,

General credit card questions here that I was trying to get answered. First I'll break down my credit cards I own and my debt.

Chase Sapphire Preferred: Limit $5000.00/ Balance $0.00
Chase Freedom: Limit $1500.00/ Balance $1200.00
Chase Slate: Limit $1200.00/ Balance $0.00
Chase Slate 2: Limit $800.00/ Balance $0.00
AZ Credit Union: Limit $1500.00/ Balance $0.00

I have 1 car loan with my credit union, and 1 student loan. No late payments on either, nor my credit cards.

Recently I went to my Chase bank and consolidated my two slate cards to my Freedom. Eliminating two cards from the same bank, and brining my Freedom from a $1500.00 limit to a $3500.00 limit. Now I have 3 cards. My Sapphire, Freedom, and Credit Union.

My question, is it wise to have multiple cards with the same bank, or does your credit primarily depend on the available balance? For instance 4 cards with chase, versus 2 cards with the combined limits. I would really like to eventually consolidate my Freedom with my Sapphire, just so I can have 1 card that I benefit the most from with Chase. I'm interested in applying for an AMEX so that I would have 3 cards total from 3 different sources. Main question is, is it bad to close out/consolidate cards that I have open with a single bank? Do credit companies only look at how diverse your credit is, and only care about the ratio with avail/bal versus how many cards you have open.

I'm 24 years old with a solid job, and credit history of 6 years with no late payments.

Thanks, and hope you can help!


sj632
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Postby sj632 » Sun Dec 01, 2013 3:04 pm

My two cents for the most part credit card is consider one type of credit regardless of the issuer. The most important factors are % utilized and length of the account.

Different types of loans/credit also helps but you have that with your on time car and student loan payments. My advice is wait away before applying for another card. I don't think you need one. Build history with the cards you have and pay off your loans and your CS will probably be in the high 700 to close 800

PhoenixDown
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Postby PhoenixDown » Sun Dec 01, 2013 6:24 pm

1 - If you feel the Amex card will compliment your lifestyle, I say go for it now. Just don't go on a binge and applying for anything and everything.

I believe in acting with purpose -- and not waiting simply for the sake of waiting. I personally waited until my Amex 3x CLI hit my reports and had several months of solid payments on my Freedom before applying for the CSP and it worked out well. Others wait for their credit scores to improve or because they have a few too many inquiries.


2 - Keep the Freedom if you find you would normally use the 5% cash back categories. The Freedom compliments the CSP well.

3 - I agree w/ SJ on the above factors.

In addition to what SJ said, I personally believe in having bank diversity ... this way if one bank were to cancel your cards for some reason, you at least have another card or cards you can use.

MemberSince99
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Postby MemberSince99 » Sun Dec 01, 2013 7:30 pm

It is not bad to consolidate, I think you probably did the wise thing by moving your line to your Freedom, so long as you pay it off and aren't paying them interest. It's better to have fewer cards with larger limits than a lot of cards with tiny limits just from the perspective of you using and keeping track of them.


And they expect you to have different sources for your credit. It really doesn't hurt a thing. You are fine and probably way over thinking it.

takeshi
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Postby takeshi » Mon Dec 02, 2013 8:19 am

shippy wrote:My question, is it wise to have multiple cards with the same bank, or does your credit primarily depend on the available balance?

They're not really mutually exclusive as your question makes them out to be. Scoring is based on the usual suspects:
http://www.myfico.com/crediteducation/whatsinyourscore.aspx

It can be wise to have multiple cards with the same bank but there isn't a one-size-fits-all answer that applies to everyone out there. Whether it's wise for you depends all on your particular situation/needs/wants. If the multiple cards aren't beneficial to you and one of the cards is beneficial then it sounds like a good decision to consolidate the limits and close out the unwanted cards.

shippy wrote:Main question is, is it bad to close out/consolidate cards that I have open with a single bank?

Again, it's not universally one or the other. If your particular needs and goals lead to closing them then that may be what you need to do. The primary detrimental effect of closure comes from increased utilization due to losing the credit limit(s) but if you're reallocating the credit limits then that doesn't matter. AAoA won't be affected immediately. Closed accounts in good standing remain on your reports for 10 years.

Rather than asking "Is X bad or good? Is Y bad or good? Is Z bad or good?", I highly recommend reading up on credit scoring and considering the impact(s) of potential decisions using that information. What may be "bad" to one may be "good" or "necessary" to the next. It's not just about the impact on scoring but, again, one's particular situation/needs/wants/goals/priorities/preferences/etc. I've made a number of choices this year that have negatively impacted my score but get me headed in the direction that I want to go in. In the long run my score will recover and I'm not applying for anything while my score is in recovery anyway.

shippy wrote:Do credit companies only look at how diverse your credit is, and only care about the ratio with avail/bal versus how many cards you have open.

Again, not mutually exclusive. Credit is based on a number of factors. Utilization plays a significant role. Diversity matters but, as stated above, credit cards are credit cards. Diversity comes from having different types of credit. That said, number of accounts does play a role as well.

samhradh
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Postby samhradh » Mon Dec 02, 2013 10:47 am

PhoenixDown wrote:Keep the Freedom if you find you would normally use the 5% cash back categories. The Freedom compliments the CSP well.


Thirded. Not only is it an easy way to gain UR points via the rotating 5% quarters, but the CSP has the best redemption rate for travel in the Chase family.

As for the rest of your questions, other wise posters have done a great job sharing feedback. I have no more to add.
Citi Forward ($10.1K), AmEx Blue Cash Everyday ($30K), Chase Freedom ($12.4K), Discover it ($5.5K), Barclaycard Arrival ($12.5K), L.L. Bean Visa ($5K). FICO 806 (TU), 812 (EQ), 806 (EX).



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