Ask Lemmy

I work in the credit card space for a living. DM me if you actually want to chat about how to fix your situation.

Could keep all of them that don't have annual fees, and spread out your purchasing. I have three cards, one that's 2% off everything, and one that's more off food, and another that's more off online purchases. My aggregate credit limit is pretty high even if each one were a bit modest (they aren't as modest as they used to be though)

You can always pay off your balance more often than monthly. When I first opened my first card, I paid it off every Friday, to make sure the small limits were available if I needed them (I had a credit limit of $1,000 back then). Now I pay them off every payday, still multiple times a month. If you need to carry a large balance across payment cycles, you'll get stuck on a high interest rate treadmill you don't want to be on anyway.

The credit limits increase with time. The $1,000 card I started with now has a $10,000 limit. Mostly the limits came automatically, but I did request an increase to be able to pay for a home repair in a single transaction. Now between the three cards I have a lot of limit.

A fair number of places where you might want to spend a lot of money in a single transaction won't accept credit cards anyway over a threshold. Last time I bought a car after establishing the price I asked about just charging it to a credit card. They were willing to do it only for $2,000, so I had to cut a check for most of the car anyway.

Iirc, closing an account impacts your credit not because you cancelled your account, but because it impacts your debt/credit ratio.

You have 2 credit cards. Card A has a 10k credit and 2k balance. Card B has 10k credit and 0 balance.

So your ratio is 2k/20k or 10%.

If you cancel card B, your credit line is now 2k/10k, which is 20%. This increases your credit utilization, which impacts your score.

Opening and closing a bunch of cards without any balance shouldn't have a significant impact on your score, maybe a few points.

Hard inquiries can be bad but most credit cards use soft inquiries nowadays anyway

oh that’s right we don’t have a credit card or travel Lemmy yet. Okay, take down a few notes.

First you haven’t done anything terrible. Probably you’ve knocked your credit score down about 10 or 15 points. Not because of the opening and closing, but because multiple hard inquiries of your credit can cause the score to drop. That will repair itself over the next six months.

Something good to know is that American Express cards will only give you their sign-up bonus once per lifetime per person per card. I know that Chase will let you reapply two years after you drop a card and will give you the bonus, and I believe that’s the standard for other Visa cards or MasterCard.

I strongly recommend that you look at cards based on the rewards plan that they’ll provide you and the amount of spending required for you to be able to get the reward. I own several businesses so a $4000 or a $6000 spend is not a big deal for me over three months, But when I didn’t have that, I would need to figure out if I could make that spend over the required time period and go one card at a time. so back in my early days I was getting one card every three or four months, and then canceling cards about a year or two in, and then reapplying for them two years later.

I know that sounds complicated, but when you wanna fly to Australia, free and business class, and you don’t have a lot of money, that’s how you work the system.

Something good to know is there are essentially three tiers of credit cards. There are basic cards that will give you a lower reward, have a low spending requirement, and are generally with no annual fee. Then there is a second tier of cards, which will usually have a $95 per year fee, which is waived for the first year, and they have more rewards and perks. Then there is a third tier of cards that will have much higher spends (sometimes $6000-$10,000 in 3 to 6 months), but they will have much larger rewards along with about a $500 fee. I recommend staying away from the higher to your cards unless you can play that game and it’s not an issue.

OK, that is our Lemmy primer for everyone interested in credit card points.

Edit: I also strongly recommend you get one of the lower tier cards now, and keep that one with no anual fee from now on. Part of credit history is card longevity; I am a charter cardmember of a card from years ago for that reason.

Amex makes sense if you (a) live in the US, and (b) can pay off your balance every month. Yes, there's a yearly fee, but there are many benefits as well. I don't know what Blue gets you, but you get things like Uber rebates, points that can be used in Amazon like money, airline benefits, and so on.

You do not want you carry a balance over and pay the interest. Amex is not competitive on their interest rates.

I use Amex almost exclusively, and only very rarely encounter a place that won't accept it.

The concept of a credit score just keeps getting wilder. Also wild that you can't just use any credit card anywhere.