Doris, On 7-12 you complained that your daughter had too many cards, with total credit limits of about $11,000, as well as too many inquiries. After nearly two months, none of the "experts" have responded to your request for advice. Since it's now unlikely that they ever will, I thought I'd give it a shot: (1) On 7-12 she had 10 bank cards and 6 retail cards, and then on 7-28 you listed 5 more retail cards. That's a lot of new cards in 16 days. She needs to slow down and apply no more than once every two months. After a while, the inquiries will thin out. (2) The most urgent issue is too many bank cards. Some of those cards are rather expensive, and should be cancelled soon. Any with monthly fees should be cancelled first. Others should be closed about 11 months after they were opened, to avoid any more annual fees. A bunch of closed accounts might look bad, but they would probably look just as bad if left open. She should dump the First National Bank, First Premier Bank, and Direct Merchants Bank cards, as well as one of the Capital One cards. The first two are too subprime for her, since she has Providian, Orchard Bank, etc. Direct Merchants duplicates the secured Optima card. She could take the DMB deposit and apply it elsewhere, preferably to the Optima card. Capital One obviously duplicates itself. I recommend that she keep the Gold Visa. Sure it's a joke, but so is the Classic Visa. After a couple of years, her total credit limits could become an issue if they scare away the prime card banks. Sooner or later, one of the Orchard Bank cards has to go, to allow her to replace it with something better. Aspire could remain, with no annual fee, and no reporting to affect her perceived credit load. But the interest rate of 30% makes it less useful than some others. She should avoid accepting a second Providian card, or paying any fees for credit limit increases. Those will come soon enough without paying fees. Ideally, 3 to 5 years from now, she would have no remaining subprime or secured cards. Providian and Orchard would have eliminated their annual fees after negotiation, Providian would have a normal interest rate, and AmEx would issue her either a green card or a platinum Optima, or both. After closing her remaining Capital One account, she would go back and apply for their Platinum Visa. Any other cards would be new to her, like Citibank, Discover, or Wells Fargo. (3) Her retail cards could be reduced gradually, since there are no annual fees. She should keep the cards she enjoys using. I don't think that she literally uses each card every month as you stated. For example, does she really charge United and American airline tickets each month? If her total credit limits ever become an issue, one of the airline cards may have to go. If she doesn't own a home, she may not be using the Lowe's card. I think the Office Max card may be superfluous. (Remember, she needs to use her bank cards a lot before she negotiates for better terms.) American Eagle seems to offer a very narrow line of clothing. She needs to find ways to discriminate among the retail cards, because 11 are too many. Real experts would recommend maybe one store card and a gas card. I think five or six would be fine myself, but only if she uses them and enjoys doing so. You really got me involved with the whole retail card thing, especially the single -purpose cards from Hurley State Bank. I do searches and always find your messages. Since you tell it with such exasperated relish, your daughter's story both inspires and amuses me (I loved the part about your tearing up her Goodyear PIN.) I also see some parallels between her situation and mine. My bank cards are a lot better than hers, but I'm 0-for-3 so far applying for retail cards. I wonder how she does it with her messed-up credit, or is it still messed up? I hope my perspective is of some use to either one of you
Wow! You can bet I've already printed out several copies of your post to tack around the house, so that little Miss Know-it-All can see it quite a few times. I'm glad someone agrees with me that she has too many open accounts, and I'm especially happy that someone has offered a very sensible solution. My daughter's credit still stinks, but it's not nearly as bad as it was at one time. She has some charge-offs and collections as well as more inquiries than she can shake a stick at. Just before we switched to this new board, I recall a post from a lady who believed she had an addiction to applying for and receiving new credit cards. It didn't make much since to me until I noticed my daughter stockpiling credit cards. I think that lady was onto something. Before we started cleaning up her credit reports and working to get her some new accounts, she didn't have a single positive line on any of her reports. Now she has tons of them, but "the more the merrier" doesn't apply to credit accounts. I will say one thing to her credit. She has saved a substantial amount of money in the last year, and her savings does outweigh her debts. She intentionally charges almost everything she buys and pays substantial amounts toward her balances every month. Supposing she does listen to reason and closes some of the accounts, I wonder if these positive credit lines will help her much being that they were all open at the same time. Since the last post you saw on this matter, she has opened one more new Mastercard account. My credit union, to which she is a new member, approved her for a $500 share-secured Mastercard with a very low rate--8.8% for the first year and 11.6% thereafter. I realize that all these beer money credit cards aren't much of a help, but if she would cut down on them, I'm sure she could get a better deal later on. Once again, Rich Guy, I really do appreciate your response.
Wow, I'm impressed with this credit analysis that you did! :-o I am new to this board and can already tell that you have great knowledge in this area. What's funny is that this credit history sounds like a girlfriend of mine's. She had many bank visas/mc's and just about every dept. store card in site! She just filed for bankruptcy in May? of this year (was over $30+k in debt...including her student loan). What's crazy is that Providian sent her a pre approval letter for a Visa Gold Card w/ a $500 limit last month. She has the card in her posession as we speak! There just isn't a need for all those dept. store cards. The only benefit is that you get special offers, discounts, and mailers in the mail, etc. You can't really use them because the interest is way too hight. When I use my dept. store cards (which is seldom), I pay them off in full. I can't affored to carry a $1k balance on a Macy's card w/ 24% interest! That's ludicrous! And RG's right, a Office Max card is definately going overboard. What could you possilbly be buying at Office Max to need a credit card from them? Most likely a large item like a computer or something, right? But who in there right mind would buy an overpriced computer from there? Or do post-it's really cost that much?
Thank you for asking. Her Direct Merchants card is a secured card, as is her Optima. I believe that the deposited funds would do more to improve her future if they were concentrated in the one Optima card. American Express will use her activity on the Optima card to form its own conclusions about her income, payment habits, etc. The ultimate fact is that there is no DMB card she will want when she has perfect credit, whereas there are several AmEx cards she may want. Sticking with DMB just to build a history with them would be futile.
What will really help her are positive lines that she keeps open (and positive) for several years. Barry's post about the two-year rule at AmEx got us all thinking about that point. If her accounts are established, any similarity in their beginning dates would be irrelevant. Gradually closing some of her accounts would probably be the best way to avoid an image of being impulsive, a binger, addictive, etc. I'm not sure if anyone keeps track of opening and closing patterns anyway, unless they're very recent.
Actually, she does use the Office Max card quite often. She makes frequent purchases for her office, and her employer reimburses her. She pays off the entire balance of it every month. She could probably pay cash for the items she buys, but she claims she's building a positive credit line. Still, she has too damned many cards.
I agree. DMB does carry prime products, but the interest rates aren't that great. I'd really like for her to concentrate on building credit with the credit union. While she has only a $500 share-secured limit, I'm sure she could establish an excellent relationship with them, which would open her up to other credit products. Even with the secured card, the rates are great (8.8%), and so is the customer service. The credit union brands its own Mastercards, so she can deal with them locally and in person. I've read in several places, however, that credit unions are notorious for not reporting to the credit bureaus. I have found that my Mastercard account is reported regularly to Experian.
Well in that perspective, that's a smart idea on her part. I'm trying to do the same with my Am/Ex card and purchases that I have to make at Costco. I could use my Corporate Am/Ex card to make purchases but I'm trying to help out my credit so from this point forward I'll use my own personal card. Besides, I've had problems using my Corporate card due to a low retail limit on it. I can only charge $250 per 30 days only! Even if I charge $250 and pay it off right away, I still can't make another retail purchase for 30 days. I'm still confused over this and Am/Ex told me to contact my site administrator. I think I'll post a message in regards to this and see what the response is.
I think AMEX is probably right. You should contact the person in your company who handles the corporate card accounts. They could call AMEX & have the limit increased. I have a corporate Mastercard through G E Capital. My site administrator had my limit increased to $10,000. Good luck!
