Hey everyone, I recently opened my 5th credit card and was told by someone much older than me that it wasn’t good to have these many credit cards at my age. Am I making a mistake by opening these many credit cards, or should I keep up with my plan below?
Cards:
Travel / Catch All: Capital One Venture X (Just Opened)
Rotating Categories: CFF, Discover IT
Rent / First Day of Month Purchases: BILT
Old Catch All Card: CFU
Plan:
I opened my first AF Card, Venture X because I’ll be traveling a good bit with my family during my last year in college, so I want to take advantage of lounges. I’ll also be traveling a good bit in my finance job when I start next year, so I thought the benefits made sense. I’ll be able to meet the 4k spend because I’ll be paying tuition with it.
My credit score used to hover around 790, but now it’s around 750 due to hard inquiries. I haven’t missed a payment, AND I don’t plan on opening any more cards for at least a year. I was thinking of the Apple Card because of the good UI and 2x, but now that Venture X is 2%, I won’t consider the Apple Card anymore. I’ve been taught at a young age that credit is very important, so I’m responsible with my spending, even with a $20k + credit limit.
Questions: What do ya’ll think? Was opening these many cards a poor decision? And what does everyone recommend I should do going forward with credit cards? Feel like I’ve plateaued already haha.
As long as you’re using your cards responsibly, not charging more than you can actually pay for, and paying your statement balances in full every month to avoid interest, your plan seems very sound. You have a great foundation to a very strong credit profile. People advising you against your current setup either don’t understand how credit profiles work or are just assuming you’ll end up in high interest credit card debt. Don’t fall into that trap, and you’re doing great.
I’ve always been scared of this, but I run credit reports for prospective tenants every month and have come to realize I never care about the number of open accounts on file. We just look for any late payment/delinquency issues and how much debt they are showing in relation to their income. The debt-to-income ratio is only really valid for installment loans (i.e. car or house mortgage), or people who carry balances. If a person has 20 cards with $500 in total balances, we wouldn’t even blink an eye. Most loan officers likely view it similarly when handing out loans.
Not a bad thing. As others have said, as long as you pay them. I have 16 cards, and the biggest thing for me is just making sure they are all paid when they need to be. I use the calendar on my phone to ensure that, and I’ve never had a late payment. That’s the hard part of juggling multiple cards, but if you can handle that, go for it.
Xan said: @Kingsley
How many of those cards are you using regularly?
I keep them in constant rotation but always make sure they are paid in full.
Very interesting. Is your focus on travel redemption or cash back? If it’s the former, you’re obviously in multiple CC ecosystems—does that make it easier to reach your travel goals? Are you maximizing every purchase?
You can probably take advantage of lounge access on the VX. When you get the finance job, check if they will pay for an airline-specific lounge membership. It can help if you’re at a hub airport serving mostly one airline. Now is the time to pay in full each month and let your credit score grow.
As long as you’re responsible, it doesn’t really matter. A credit score of 750 is still very good. Your first loan (aside from school) might be for a car, and with that score, you’ll almost definitely qualify for the best rates. Your credit score doesn’t matter much in day-to-day life; I have 8 cards.
I think you’re making a good move! Here are some guidelines I’ve followed: 1) More total credit is better. Accept any pre-approved offers. 2) Don’t close older cards, unless necessary. Average age is a factor in your score. 3) When applying for cards, consider their long-term value. 4) Subjective opinion: Don’t churn cards. Great job on the foresight!
Just don’t open more than 5 cards every 2 years. Make sure you can manage them; nothing else matters! You’re not going to hurt your credit by having many accounts open—in fact, it may help. It only hurts if you apply for too much too quickly.