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Credit Card Conundrum
Old 07-29-2020, 01:29 PM   #1
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Credit Card Conundrum

I know there are a number of threads around credit cards - opening, closing and how many cards to hold, but here's yet another.

Just applied and got accepted for the new Verizon Visa card (4% back on Groceries and Gas, 3% at Restaurants - cash back comes in the form of Verizon $'s - which can be used for Verizon purchases including paying the monthly bill). I'm a Verizon customer, so this makes sense - it also can be used for autopay with a 10% discount (only credit card option for this - was using autopay from checking up-till-now).

So now I'm holding 8 cards (plus one store card) - 4 travel reward and 4 that give me points or cash-back. Since we're not big-time travelers (and even less-so with COVID) I want to pare back the travel cards - get rid of the two hotel-specific cards and the AMEX Gold Card --- and I'm debating getting rid of the Chase Unlimited Visa/Chase Sapphire Preferred combo as well (because aside from trip cancellation insurance, don't see the big benefit - the other cash back/point cards have heftier rewards).

Complicating matters are that we're buying a new home in the Spring, so I don't want to raise too many credit report red flags.

Questions are:

- How many cards are too many?
- Strategy for getting rid of cards (thinking I should do it slowly as opposed to all at one time)?
- Any reason I haven't thought of to keep the Chase Unlimited/Sapphire Preferred combo (or even the AMEX Gold)?

Thanks,
Mitch
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Old 07-29-2020, 01:31 PM   #2
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Quote:
Originally Posted by mitchjav View Post
I know there are a number of threads around credit cards - opening, closing and how many cards to hold, but here's yet another.

Just applied and got accepted for the new Verizon Visa card (4% back on Groceries and Gas, 3% at Restaurants - cash back comes in the form of Verizon $'s - which can be used for Verizon purchases including paying the monthly bill). I'm a Verizon customer, so this makes sense - it also can be used for autopay with a 10% discount (only credit card option for this - was using autopay from checking up-till-now).

So now I'm holding 8 cards (plus one store card) - 4 travel reward and 4 that give me points or cash-back. Since we're not big-time travelers (and even less-so with COVID) I want to pare back the travel cards - get rid of the two hotel-specific cards and the AMEX Gold Card --- and I'm debating getting rid of the Chase Unlimited Visa/Chase Sapphire Preferred combo as well (because aside from trip cancellation insurance, don't see the big benefit - the other cash back/point cards have heftier rewards).

Complicating matters are that we're buying a new home in the Spring, so I don't want to raise too many credit report red flags.

Questions are:

- How many cards are too many?
- Strategy for getting rid of cards (thinking I should do it slowly as opposed to all at one time)?
- Any reason I haven't thought of to keep the Chase Unlimited/Sapphire Preferred combo (or even the AMEX Gold)?

Thanks,
Mitch
I'll add that I was playing the "maximize reward" game with these cards - which category do I pay for with which card? It's gotten complicated though and tiresome and we're not traveling so much and we have too many reward currencies - so this is all about simplification...
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Old 07-29-2020, 01:59 PM   #3
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Too many cards lowers your score. Closing any cards lowers your credit score, and closing the oldest accounts would impact the score more negatively than closing newer accounts. Eight cards probably isn't too many, but you can check that by seeing if your credit score is over 800. Your credit utilization (% of credit limit) per card should be maintained at less than 30% for each card, each month.

Eliminating cards should be done very slowly (maybe 1 or 2 a year), and consider retaining your oldest cards if possible.
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Old 07-29-2020, 02:09 PM   #4
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I agree that you should keep the oldest cards even if you don't use them. That will definitely help keep your credit score high.

I certainly don't consider eight cards too many; I have 14 although I mainly use just 8 or 9 of them. The others are there just in case. I also believe in holding all three major types -- Visa, MC, and Amex. They each have their advantages, and I've found times when one network was down at the place I tried to use it, so another did the job for me.
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Old 07-29-2020, 02:15 PM   #5
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I have had some luck with having Chase move credit lines between cards so you might be able to drop one and move the credit line to the other.
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Old 07-29-2020, 02:35 PM   #6
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In your shoes, first, I'd pull my current credit report so I have an idea on my baseline. You can get free credit monitoring services with capital one, amex, or from credit karma.

Then I'd close a couple that I have no reason to keep. If you have 8 you must have at least 2 you can easily abandon.

Then look at things in 60 days (including your score) and pick the next two.

I'd keep the oldest and highest credit lines, and dump the other 4 or 5. Having 3 good cards is enough to keep anyone above 800.

eta: Closing accounts doesn't create flags, not at all like opening accounts. You will, of course, have an overall lower available credit number, but the risk calculators are more interested in your usage/availability ratio, so if you're already paying everything off and staying low this won't be a factor.
ie: You use $3k per month of $50k in credit lines isn't much different than you use $3k of $100k in credit lines. Of course, if you're using $20k every month then you'd want to stay at high total available credit.
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Old 07-29-2020, 02:36 PM   #7
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Today I closed my Delta AMEX card . No need to pay a $95 fee for something I do not need for the foreseeable future. Don't care about credit scores or any other BS.
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Old 07-29-2020, 03:24 PM   #8
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Quote:
Originally Posted by mitchjav View Post
... - How many cards are too many? ...
Well, for me two is too many. DW the same. One card each. Each of us also has one debit card. Our credit cards are from different issuers and our debit cards are from different banks. We do this primarily because when we travel we minimize the hassle if a card gets shut down via automatic fraud detection/prevention. Despite the fact that we call the issuers before every single international trip, we did have a card shut down a year or two ago.

No Amex. Merchants hate the card and it is widely refused internationally. No Discover for the same reason.

There are those who love playing all the rebate games. More power to them. My card gives me 1% back and has a $50 annual fee. Done. DW's card has, I think, a slightly better deal. Certainly we could work at it and make some money, but I'm just not interested.

I am also baffled by all the concern about credit scores that this well-off crowd seems to have. I pay no attention. The few times I have checked, our score is 820 +/-. I guess it could be higher but we never borrow any money so apparently that counts against us.

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Old 07-29-2020, 03:42 PM   #9
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OP - I have about 8 cards, I don't really keep count as the number does not affect credit score at these low numbers.

I just recently closed 2 cards as I just wasn't using them and they served no purpose, plus I was mad at Menards for allowing someone with a fake duplicated card to charge in another State over $1,000 at gas stations in 2 days (talk about RED flags !!).

My score dropped 30 points and took 3 months to come back up to over 800. Not a big deal.

I got rid of a card that had a fee, as I'm not traveling so don't need the fee.

Be sure to collect all your points, example use for Gift cards, or statement payment before cancelling, Airline miles at the airline are safe.
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Old 07-29-2020, 04:29 PM   #10
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From a credit score perspective, 8 is not too many cards. I have 10 cards with a score above 830. I previously had a few more cards with score still around 830.

Last year I closed two cards I wasn't using. My score probably dropped a bit for a few months and then went back up.
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Old 07-29-2020, 04:55 PM   #11
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DW and I have cancelled three cards over the past 7 months - all airline cards with annual fees - Hawaiian, United, and Southwest. Still have seven cards (two MC, three Visas, Discover, and one store card) - all with no annual fees. We did not see any movement in our credit scores. We keep our utilization at less than 5% and during the pandemic it has been closer to 1%.
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Old 07-29-2020, 04:58 PM   #12
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I go with 4 cards. 1 has no international fees, so I keep it and use it mostly for that when I travel. 1 is with my local bank (PNC) and gives me 4% on gas and 3% on restaurants. My go-to for all other purchases is the 2% Citi DoubleCash. The 4th one is the one I use to chase occasional points and miles. I use it to get the points/miles and then close it before any fee is due. Then I sign up for a different points/miles one next year. I see a small dent now and then on my credit score but it hovers around 800 give or take 10 each direction.
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Old 07-29-2020, 05:17 PM   #13
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Well, for me two is too many.
And here I thought I'd be the only one to say that!

I didn't have any credit cards at all for the first 16 years after my divorce (which could have been aptly described as financial Armageddon and made me wish that there was no such thing as credit).

Then the good people on this board persuaded me I should at least dip my toe in that (credit card) water back in May of 2014. ER Forum member FIREd mentioned his Amazon card, and it seemed like such a good fit to my Amazon-addicted lifestyle. I was feeling reckless so I applied for it online, and much to my shock I was accepted in about a minute I guess. I have it connected to my checking account and automatically paid off each month.

It's been great to get those rewards now and then. I haven't felt any need to have more cards, though. Like OldShooter, for me two is too many.

My credit is 770 which isn't as great as the others here, but maybe that is because I haven't borrowed money for decades except for my credit card which is automatically paid off every month. Anyway it is high enough that I do not care.
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Old 07-29-2020, 05:21 PM   #14
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Quote:
Originally Posted by mitchjav View Post
I know there are a number of threads around credit cards - opening, closing and how many cards to hold, but here's yet another.

Just applied and got accepted for the new Verizon Visa card (4% back on Groceries and Gas, 3% at Restaurants - cash back comes in the form of Verizon $'s - which can be used for Verizon purchases including paying the monthly bill). I'm a Verizon customer, so this makes sense - it also can be used for autopay with a 10% discount (only credit card option for this - was using autopay from checking up-till-now).

So now I'm holding 8 cards (plus one store card) - 4 travel reward and 4 that give me points or cash-back. Since we're not big-time travelers (and even less-so with COVID) I want to pare back the travel cards - get rid of the two hotel-specific cards and the AMEX Gold Card --- and I'm debating getting rid of the Chase Unlimited Visa/Chase Sapphire Preferred combo as well (because aside from trip cancellation insurance, don't see the big benefit - the other cash back/point cards have heftier rewards).

Complicating matters are that we're buying a new home in the Spring, so I don't want to raise too many credit report red flags.

Questions are:

- How many cards are too many?
- Strategy for getting rid of cards (thinking I should do it slowly as opposed to all at one time)?
- Any reason I haven't thought of to keep the Chase Unlimited/Sapphire Preferred combo (or even the AMEX Gold)?

Thanks,
Mitch
Some of our cards are going to be closed soon for non-use.

We have a lot of different rewards right now, plus another for airport club and primary car insurance, and a couple for international travel no foreign fees.

We’ll probably gradually pare them back.
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Old 07-29-2020, 05:45 PM   #15
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Sign up for credit karma and see where you stand.

The greatest impact are: payment history, credit card use (percent of credit utilized), derogatory remarks.
Medium impact is credit age, so close out newer cards first.
Lowest impact are: total accounts and hard inquiries.

I think hard inquiries are reported over a 12 month period, at least on mine they are. So stop asking for any new credit now.
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Old 07-29-2020, 05:51 PM   #16
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So now I'm holding 8 cards

That's a lot of credit cards! I think I have 3 but really only use 1. I keep the other two just in-case I need to cancel my primary card for "some reason".
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Old 07-29-2020, 06:18 PM   #17
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Complicating matters are that we're buying a new home in the Spring, so I don't want to raise too many credit report red flags.
I would not cancel cards because that would reduce available credit and increase credit utilization on remaining cards: both factors reduce your credit score.
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Old 07-29-2020, 06:40 PM   #18
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Questions are:

- How many cards are too many?
- Strategy for getting rid of cards (thinking I should do it slowly as opposed to all at one time)?
- Any reason I haven't thought of to keep the Chase Unlimited/Sapphire Preferred combo (or even the AMEX Gold)?
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1-we keep three. Discover is used virtually all the time. our MasterCard is there for those rare occasions where Discover is not taken...usually online purchases. our VISA card is our emergency card and not carried. it's kept in reserve in case my wallet or her purse is lost or stolen. we don't card hop for rewards and we don't carry a balance.

2-cut up and send back whatever cards you close. all at once, one a month...i don't think it matters.
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Old 07-29-2020, 07:02 PM   #19
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I have about 8 accounts but I really only use 4 cards. Some accounts I never really use and others are strictly for 0% balance transfer, overdraft protection or some other emergency. I donít even activate the cards for those accounts. If your credit score and utilization looks good I would just keep the accounts open and quit using the least rewarding cards. I bet that Verizon rebate is a teaser deal.
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Old 07-30-2020, 12:56 AM   #20
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I had 4 credit cards, but my Barclays account closed itself because of inactivity. I intentionally neglected it because I didn't care about Barclays any more.

I personally don't see any reason to close card accounts. All of the major banks will transfer an account with annual fee to a lower tier card without fee. All it takes is charging a cup of coffee once every three months to maintain an account open indefinitely. If you have your cards on auto-pay in full, the effort is just about nothing. Open accounts with a zero balance are a minor factor in the FICO scoring algorithm, so they do have a minor purpose even if infrequently used. Maximum FICO points come when more than 1/2 of open accounts have a zero reported balance and the remaining accounts have less than 5% utilization. You never know when an old continuous relationship with a bank will prove useful again. My average age of accounts on the three cards I have open is 26 years, none of the cards are currently the same tier of card as when I initially opened the accounts. My FICO8 score is a perfect 850 and has been for the last 6 years. An 850 score isn't worth anything much past the entertainment value when someone like a car salesman checks your credit though.

It is a personal choice, some people feel better tying up loose ends and closing accounts. There is another perspective where open, but unused accounts have a marginal benefit in scoring and also keeping a relationship.
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