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Discussion in 'Credit Talk' started by matty61184, Oct 9, 2001.
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Sounds good and I admire your responsibility and maturity. If I had that when I was 17/18, I would never have screwed up on a $500 student card. Your parents clearly taught you well.
My concern is cancelling all those cards right now may have murdered your credit score. Did you talk to someone at the CU that you want an auto loan and what they thought about cancelling these cards?
You probably want to let your accounts age a bit before you close them;you can always opt not to use them(only for emergencies).
I just think that you have come this far & credit lines like that gives you LOTS of leverage when you want better offers.
Yes, you have a good point. The loan clerk said she didn't like seeing all those open accounts, and that 2 or 3 would be plenty. I would think the average age of open accounts would become more, because the only 2 accounts remaining open are the ICCU Visa (Opened 7/00') and Capital One Visa (Opened 09/00'). Let me know what you think. Also, spoke with Capital One, and they said my good payment history will likely get me their gold card by December. I won't get my hopes up, but I've had good luck with them so far. Thanks for all the advice and support, it's really helped me get my credit in tip top shape!
Cancelling Providian's GetDumb card was a Smart move.
But I have yet to see how cancelling Chase Platinum, BoA Platinum and your only retail card would help your credit. You had some fine Prime products (whose terms would further improve, in time), some tradelines starting to age, and the credit mix enabled by your retail (Target) card, and you chose to get rid of all that.
If I were you I'd try to reopen these 3, but it's your decision to make. Either way -- good luck!
I agree with Saar. You had some excellent credit cards with some great credit limits.
Yes, I can see what you guys mean, but is an $8500 credit line really feasible for a 17 year old? I just don't think I need that much available. I know I would NEVER even think of charging more than $300 to a card, but the loan officer told me it is a negative factor when they look at loans, and they see it as $8500 just sitting there ready for you to go charge yourself into debt with. I know it's stupid the credit union sees things from that type of a standpoint, but I figure I'll just keep the cards I have and see what I can do with Capital One and the credit union card.
Can't you call and ask to have the limits lowered to something reasonable for your age? Maybe $1000 per card? I agree with everyone else about cancelling the platinum cards. You just cut your ties with those very reputable banks. I would try to lower the limits and see what happens.
Would you like to meet my daughter? She's 20 and whithin 2 months of going off to college had 6 credit cards,maxed them out, so of course guess who had to pay them. But afterall, shoes are the most important part of the outfit!
Credit unions are nice,but NOBODY wants to see you take a "profit " elsewhere.
For example,I've have a line of credit w/Bank One since 3/95($2,500 > $5,000 > $10,000....within 5 yrs). When I opened a seperate checking w/Community Credit Union(they pulled my credit report),& saw that I had a $5,000 line(then),they wanted to give me a 2% better rate but only half of the credit line that I worked up to.
I told them "Sorry boys,I came this far not to just walk away".
They were not willing to meet me anywhere near what Bank One had offered.
I did not have any other account w/Bank One when they approved me(but I changed my checking when they raised me to $10,000).
I hope that you are doing what is BEST for you.
Matty, What was your goal to begin with when you were applying and recieving these cards that you are canceling now? The very ones you are canceling are the very ones I would keep. You can always have the limits lowered. I would have kept the target and canceled the Cap1. I do agree at your age, you are being responsible with your credit,but I would seek second opinion from another finanical advisor before making anything firm. Does having this much available credit scare you and were your parents aware of what you were doing when you were applying for these cards? What advice have they given you? Just curious.
Also out of curiosity, who on this board advised you to cancel your two platinum cards?
I think when people talk of too much credit they mean when u cross the 100k mark. Since FICO doesn't take into account your income, a 15K credit limit on all your accounts is a good credit risk for most lenders. I Agree with most people here, and would try to reopen the BofA,Chase and target cards since they don't have annual fee's, and can only help you.
Having OPEN but unused cards helps with DEBT TO CREDIT LIMIT RATIO...
I think the credit union officer may have been speaking to you about your specific situation -- at 17 years old s/he may not want to (or have never seen) more than 500-1000 available credit. Would he/she have said that if you were 5 years older, I wonder?
His or her perceptions and value judgements are just that - which is why FICO and automated scoring is becoming the norm. You may statistically be more responsible than a lot of 35 year-olds! Age, gender, race, creed, sexual orientation, etc. should never play a part in credit decision-making.
There is one little thing that disturbs me, though.
Technically, you aren't liable for these accounts (you're not of legal age to be bound by a contract). I'm really surprised that you have so many cards from prime lenders. I had a few at 17, too, because my credit report has my year of birth off by 1 year.
I agree with "the gang" here that you should keep Target and the lower rate of either Chase or B of A - those are cards you'd probably want to keep for your whole lifetime, and having started young will only help.
Also keep in mind that Cap1 caps their limits at around 20k - my Chase Visa is already over that amount. That's why I dumped Cap1 a while ago - they won't / can't grow with me.
Best of luck - and congratulations on your accomplishments so far!
Well I just reviewed all of Matty's previous threads where he asked for advice on this matter, and as far as I can tell nobody here EVER advised him to cancel his prime and retail cards in favor of only the Cap One and CU cards. Since nobody's advice was followed (except the credit union lady's), I think Matty just made a terrible error. Consider this:
1) Matty does not strike me as the kind of young man who is on the verge of charging up all his cards, irrespective of his age. On the contrary, he's proven himself to be an intelligent, articulate, and sensible guy.
2) He doesn't have enough credit to make anyone worry that he's about to withdraw $100k and head for Ecuador where that amount of American dough would make him a virtual millionaire. (Hey, it's happened.) Moreover, those who are making car loans right now are practically begging people to buy. Frankly, Matty needn't have worried at all.
3) Since Matty is a responsible fellow, and since he didn't have a startling amount of available credit, he should have kept the prime cards. Ten years from now, when he would have had ten years of perfect prime credit on his CRA files, he'd really be sitting pretty as far as mortgages, etc., would be concerned.
4) Finally George is right, and the credit union lady is wrong. A pattern of using less than 25% of your available LOCs will HELP your FICO scores rather than hurt them. On the other hand, inactive cards with high LOCs (cards you don't use for 3 or more months) can nick the score a bit. That tidbit is often misinterpreted by people who aren't very well informed.
5) Here's another secret: The people who are going to qualify you for a car loan aren't going to see your prime cards and shout, "Oh my goodness, we don't want to sell you a car anymore. You might go wild with your credit cards and not pay us!" Instead, they're going to glance at your score and give you an immediate thumbs up or thumbs down without exercising their lofty car dealer IQs very deeply at all. (Ok, that was a unfair swipe at car dealers -- my own cousin sells cars, and he's sharp, lol.)
6) My advice for Matty would be to consider ignoring the advice given by his nice credit union lady and instead heed some of what many of us here have advised him again and again and again (and again).
Maybe I'm missing something, so I would welcome others to review the great advice given in Matty's previous threads:
Advise me on cards
posted by Matty61184, 10/5/2001
"Here are the specs. Let me know what cards I should keep and which ones I should cancel..."
Amount of time to have good credit
posted by Matty61184, 9/23/2001
"I am curious as to how long it takes to acquire the 'prime' credit record that will get you the best interest rates, etc. I have had credit since July of 2000, with no lates. I have 3 credit cards, and one installment loan. Here are details..."
Credit Card Advice
posted by Matty61184, 8/29/2001
"I'd like some tips on the cards I have and how to manage them, as well as whether I should close some of the accounts or keep them open. Here's my roster..."
What should I do? Advice Please?
posted by Matty61184, 8/1/2001
"Ok, here is my situation with all my cards. I want to know from all of you what I should do..."
How many Credit Cards are too many?
posted by Matty61184, 7/17/2001
"I was just wondering how many credit cards are too many?"
Advice for Friend
posted by Matty61184, 7/1/2001
"I've got a friend who wanted me to ask some advice of this board. He has similar cards to me, and was wondering if he had too many credit cards..."
I sure hope this tough love helps, Matty. We'd really be doing you a disservice if we didn't speak up and let you know when you may be making a mistake.
P.S. Maybe it wasn't the credit union lady at all. Maybe it was the credit union gentleman. I just flipped a coin and went with it. Either way, that kind human was dispensing baloney in my ever-so-humble opinion.
P.P.S. If you keep your cards cancelled, what are we going to do now that you won't be asking us to advise you on cards anymore! Matty, grab hold of yourself, young man! You can't forsake us! Actually, it just occurred to me, after writing this novel, that perhaps you just weren't comfortable having so many bills coming every month. That's tiresome for us 40 year olds, so why take that on as a teenager, for God's sake, even if you are responsible... If that's the reason you want to let some go, by all means do it. In that case, though, keep your Chase Platinum (or BoA Plat) and Target cards, and kiss the others goodbye; ten or twenty years of Chase will look a whole lot better one day than ten or twenty years of CapOne, I promise you.
You all have very valid points. I am going to reconsider keeping some of those prime cards. Thanks for all of the advice and encouragement, its been great. Kinda gives you a warm fuzzy.
Ok, here's the scoop. I'll keep open three accounts. I'll keep the ICCU Visa, the Capital One Visa, and the Chase Platinum Mastercard. They all offer the most attractive rates and the Chase would bundle me with the higher credit limit. I hope this is a good move. As for Target, I am still thinking about it. I don't shop Target a lot, so I'm not sure if it's feasible. The lady on the phone was very polite and told me all I would need to get the account re opened is to make a phone call.
Assuming that the credit union lady gave factual information....
Methinks that Matty's credit union could be one of the few old school lenders left out there that manually underwrites their loans.
The rest of the world uses credit scoring, and Matty just slaughtered his.
There is no FICO reason code for "too much revolving credit." There is one for revolving balances being too high and also one for too many revolving accounts. But there is NOT one for having revolving credit lines which are too high.
I've kept the inquires off, resisted sweet transfer deals in the mailbox, and have requested increases every six months or so. I now have three lines at 15k each and a few other small ones and my FICO is in the mid-700's with no mortgage. This stuff actually works.