Where shall we begin?

Discussion in 'Credit Talk' started by Doris K., Jan 1, 2001.

  1. Doris K.

    Doris K. Well-Known Member

    Okay, I think I've finally talked some sense into that hard-headed daughter of mine. She never could get it through her head that the reason she can't get better cards is because she has WAY too many accounts open and too many inquiries. While there's not much she can do about the average 40 inquiries on each report for the last two years, she can begin closing some of her useless accounts. There are so many, I can't imagine where to begin and which ones and how many to close at one time--or when. She has no late pays on any of her accounts, and there are no negatives on her credit reports. Here's the list. Any ideas? Does anyone want to tackle this one?

    *Capital One Visa Classic-1000 limit-opened 11/1999

    *First National Visa-350 limit-opened 1/2000

    *Orchard Mastercard-400 limit-Opened 2/2000

    *Orchard Mastercard-1100 limit-Opened 3/2000

    *DMB Partially Secured Mastercard-$500 limit-Opened 3/2000

    *AMEX Optima Secured-$200 limit-Opened 3/2000 (Not reported)

    *Capital One Visa Gold-$1500 limit-Opened 4/2000

    *Goodyear-$700 limit-Opened 4/2000

    *Target-$200 limit-Opened 4/2000

    *American Airlines-$1500 limit-opened 5/2000

    *United Airlines-$1000 limit-opened 5/2000

    *Providian Visa Gold-$2150 limit-Opened 6/2000

    *Radio Shack-$1000 limit-opened 6/2000

    *Exxon-$250 limit-Opened 7/2000

    *Aria Persona Visa-$1900 limit-Opened 7/2000

    *Wards-$400 limit-Opened 7/2000

    *American Eagle Outfitters-$400 limit-Opened 7/2000

    *First Premier Visa-$300 limit-Opened 7/2000

    *Office Max-$750 limit-Opened 7/2000

    *Credit Union secured Mastercard-$500 limit (8.8% interest)-Opened 8/2000

    *K-Mart Cap One Mastercard-$500 limit-Opened 12/2000

    *AMEX Green-Opened 12/2000
  2. Doris K.

    Doris K. Well-Known Member

    Ooops....By the way, Cap. One has advised her to wait until April to combine her two Visa cards.

    She also has the two Orchard cards, both with zero balances. Does anyone know if Orchard will combine accounts and/or upgrade good-standing accounts to a Household or Union Plus card?
  3. creditwork

    creditwork Well-Known Member

    Like I have said on other posts, if you are not exercising your credit for growth, there is no need for all these low limit accounts. I personally close accounts with less than $5,000 limits. Just my opinion.
    In this case, call the creditors and have them raise the limits or close the accounts.

  4. Saar

    Saar Banned

    Doris K wrote:
    "She has no late pays on any of her accounts."

    How can you tell? Have you checked with all 22 creditors? :)

    This is going to hurt.

    She should close everything and anything, except for 5 accounts: Her 4 older credit cards + 1 store card (the oldest, too).

    Before considering which ones, she should combine same issuer's account whenever possible. Also have her close all secured credit lines regardless of how old; She definitely won't need them anymore, now that she qualifies for an Amex Personal (Green).

  5. Doug

    Doug Well-Known Member

    Everyone is about a year or younger, I would close all the ones with annual fees attached to them. American Express Green with no management and you could easily outdo your income for a month, nice card but keep a close eye on it. Even as you said a few years from now she will not be able to attract the better offers with all these accounts. After she closes quite a few, NO MORE, utilize what she has and let all the inquires fall off. This will take 24 months. Then at that time with a solid 2 years of payments she will be able to get much larger lines and generally better cards.
  6. Doug

    Doug Well-Known Member

    Looking at it again, all of the Bank Card proably have an annual fee attached to them.
    KEEPERS = Amex Green, Capital One Visa Classic, Capital One Visa Gold, Capital One K-Mart, Aria, Providian, both Orchards, and even keep the 8.8% Secured. All others cancel and in time work on Cap, Providian, and Orchard to combine accounts into one. It is going to cost her money with FEES right now, but should look close at the money she could have by cancelling quite a few.
  7. Doris K.

    Doris K. Well-Known Member

    Thanks, Saar!

    I'll have to compliment her on one thing. Since she's been working on rebuilding her credit, she's done an excellent job of paying her bills on time. She pays them the minute she receives them, either online or by mail. Her credit reports reflect this; however, I haven't checked with any of her creditors. A year ago, her reports were HORRIBLE. They were full of late pays, collections, and repos--even a judgement, which turned out to be for someone else with a similar name.

    She just received the Amex Green last month after having received a pre-approved offer. I was REALLY surprised that they actually approved her. I tried to tell her not to apply. Should she keep this one?

    Also, I know she needs a secured card like she needs a hole in the head. I've not thought much of the Optima Secured because they don't report it, but I've been at a loss as to what to tell her about the Mastercard from her credit union. The interest rate is very low, and they claim they will unsecure it after one year of no late pays or hot checks. The sooner that Direct Merchants Bank card goes, the better.

    Should she close everything now or spread out the closures?
  8. Doris K.

    Doris K. Well-Known Member

    Thanks, Doug! That's pretty close to what I was thinking. There are just so many, it confuses me.

    I have six bank cards and three store cards. Still, the accounts have some age to them, high credit limits, and very low balances. I can't imagine anyone having 22 accounts!
  9. Doug

    Doug Well-Known Member

    I have 22 myself but an average of 5,500 a piece. Only one wih an annual fee of $20 for a Capital One Diamond Mastercard. As long as they not costing me anything I will not cancel.
  10. Momof3

    Momof3 Well-Known Member


    May I ask if your accounts are aged some?? Just curious what time frame you accumulated all these cards??
  11. mj

    mj Well-Known Member

    Wow... that's a lot- not only does it make for a fat wallet, it's a lot of paper in the mail (plus all of the junk!) and a lot of potential telemarketing calls!

    Good for her for treating her credit well now .. it will be very important to her in the future.

    I have to ask one question -- WHY so many cards? It looks like she went on a binge last summer and got every card she could. What does her report look like? I'd suggest going to Qspace or CreditWorks and having her look at her report and score (though not a "real" score, it's pretty close). IT will probably scold her for so many new accounts and inquiries.

    My advise is to HOLD OFF on any kind of new credit until 12/01. These puppies need to "season" 12 months AT A MINIMUM.

    I would - for practical purposes - try to keep the # of accounts with balances small (it is easy to forget a payment when you have 20+ bills coming in every month!). Also have her watch to make sure none of the cards has a balance >50% of it's limit, and all of her balances should not go over 35% of all of her limits (sum of all balances divided by sum of all limits or "high credit" as reported on the CBR).

    Good luck!

    Here's my $0.02 on each of these cards...

    >>*Capital One Visa Classic-1000 limit-opened 11/1999
    >>*Capital One Visa Gold-$1500 limit-Opened 4/2000
    What's the rate? If higher than 12.99, I'd call retention and see what they can do. See if they can combine these.

    >>*First National Visa-350 limit-opened 1/2000
    >>*DMB Partially Secured Mastercard-$500 limit-Opened 3/2000
    >>*First Premier Visa-$300 limit-Opened 7/2000
    Why? These are all relatively "new" and have piddly limits - why does she need these? They will hurt her over the long-term (i.e. when a person reviews a credit history and sees these issuers, they don't look as positive as a high-limit Amex, Citi, or Chase account).

    >>*Orchard Mastercard-400 limit-Opened 2/2000
    >>*Orchard Mastercard-1100 limit-Opened 3/2000
    Like everyone else said, can't these be combined? If not, kill 'em

    >>*AMEX Optima Secured-$200 limit-Opened 3/2000 (Not reported)
    >>*AMEX Green-Opened 12/2000
    If she has a green, she can probably get a Blue ... in 6 months or so (assuming she uses the green responsibly) call and see if she can't get a Blue. 9.9% is way better than this card- even with the savings account.

    >>*American Airlines-$1500 limit-opened 5/2000
    >>*United Airlines-$1000 limit-opened 5/2000
    Are these co-branded cards (United MileagePlus Visa / Citibank AAdvantage MasterCard) or a airline travel cards? If they're travel card, the terms suck (21.6% I recall), kill 'em. They offer NO BENEFIT other than being able to charge airline tickets and vacation packages sold by the AIRLINE THAT ISSUED THE CARD (and nobody else). To revolve on these cards would be a crime.

    __If__ they're a cobrand Visa/MC, keep them (MAYBE). The key question is how long will it take to get a free ticket. If she flies United and/or American a lot, AND charges a lot, then they might be worth the annual fee. The terms SUCK (>18%) so DO NOT revolve balances on these cards.. If not, kill 'em. The annual fee isn't worth it unless you're a frequent traveler. I usually recommend people look at Amex or Diners (they participate in multiple airline and hotel programs). AGAIN, the key ? is do you travel enough to get anything out of these? I fly about 100,000 miles a year, so for me it's easy. For people who fly less than 10,000 a year, these may help them get to a free ticket faster, but double check annual fees.

    >>*Providian Visa Gold-$2150 limit-Opened 6/2000
    >>*Aria Persona Visa-$1900 limit-Opened 7/2000
    I don't think Providian will combine Aria and non-Arial accounts, but I'm guessing the terms on both of these suck (>21%), so maybe she should focus on one card and try to get the rate reduced. See other messages on this board from folks who've negotiated with Providian.

    >>*Radio Shack-$1000 limit-opened 6/2000
    >>*American Eagle Outfitters-$400 limit-Opened 7/2000
    >>*Exxon-$250 limit-Opened 7/2000
    >>*Office Max-$750 limit-Opened 7/2000
    There's really no good reason to have these accounts - except for the "free float" of money. Like I've said before, to revolve a balance on these cards would be a crime. I closed both of my gas cards (Exxon and Mobil) and now use a Chase/Shell Mastercard (5% back on Shell gas- 1% on everything else, 5.9% APR for 6 months intro, 13.99% after that, in case I do revolve). The name of the game is SELF INTEREST .... what do you get out of the card? If the answer isn't compelling, kill it.

    >>*Wards-$400 limit-Opened 7/2000
    It's dead anyway (Wards closing all stores)

    >>*Target-$200 limit-Opened 4/2000
    If she's big on 1% going to her school, that's great (or if she likes to make returns w/o a receipt-- they don't require it w/Target card). I use my dept. store cards for the "free" float. If I don't pay it in full (i.e. Xmas presents that I want to revolve), I xfer the balance. If she doesn't use it for those resons, kill it.

    >>*K-Mart Cap One Mastercard-$500 limit-Opened 12/2000
    This one I can see an advantage if she's a big K-mart shopper (% back on K-mart purchases), but beware of the high APR. DO NOT revolve on this one.

    >>*Credit Union secured Mastercard-$500 limit (8.8% interest)-Opened 8/2000
    Nice rate, but CU's usually are singy with limits, so maybe keep this one until they raise it or she qualifies for a Blue or other "big limit/big name" card (Citi, Chase, etc.)
  12. Doris K.

    Doris K. Well-Known Member

    WOW! If you aren't a credit analyst, you're certainly in the wrong business. I can't imagine getting a better analysis anywhere. Should any of the accounts targeted for kill be allowed to age anymore, or would it be better for her to get on the phone and cancel all of them today? Regardless, It's quite obvious that she won't be able to qualify for any decent cards anytime soon.

    The American Airlines and United Airlines cards are not bank cards. They are both issued by Hurley State Bank. She has never used the United Travel Card, but she does use the American Airlines Credit Card quite often. The interest rates are awful, but like most Hurley accounts, they do offer the "90 days same as cash". As far as I know, she's always paid off her balances within the 90 days. You're right! It would be a crime to carry a balance on them!

    I have all her files, and going through them, I see that she has a zero balance on the following accounts:
    -Direct Merchants Bank
    -Orchard Bank (both cards)
    -Target (used once)
    -American Eagle Outfitters (used once)
    -Goodyear (used once)
    -Wards (never used)
    -United Airlines Travel Card (never used)
    -RadioShack (used once--looks like for cash advance only-YUK!)
    -First National Credit Card
    -Amex Optima Secured

    The following have balances. I've spent most of this morning calling for balances:

    -Capital One Classic $1000 limit-balance=$320
    -Capital One Gold $1500 limit-balance=$540
    -Capital One K-Mart $500 limit-balance=$246
    -Credit Union Secured Mastercard $500 limit-balance=$250
    -Office Max $750 limit-balance=$288
    -Providian Gold $2150 limit-balance=$610
    -Aria $1900 limit-balance=$390

    Her balances are a higher than normal because of Christmas. She's divorced and has four kids (two in college) and a goofball for a boyfriend.

    Other balances include:

    -Amex Green-payable monthly-balance=$160 (includes annual fee and Membership Rewards fee)

    -Exxon-$250 limit-balance=$42 (She pays in full monthly)

    -American Airlines $1500 limit-balance=$1400 (She just charged a summer vacation package for her and the kids, with AA at a really good price)She just sent in the entire $1000 I gave her for Christmas and will pay the remaining $400 before the 90 days are up. Hopefully we can get her to the point that she can drop this crappy card and be approved for the Citibank AAdvantage card.

    I've agreed to help her get this mess straightened out, and as you can see, it's a freakin' MESS! I agree that she did go nuts in applying for credit. If it's not some sort of addiction, I don't know what is. She makes roughly $50,000 per year, and she has managed to build a savings of $10,000 over the past two years. She doesn't own her home, and her car will be paid off this year. I'm proud of the way she pays her bills, but it must be damned near a full-time job keeping up with all of them. She has made a habit of making out her checks at the very moment she receives her bills in the mail.

    I very much APPRECIATE all the help you all are providing, and I thank you all for bearing with my long diatribes!
  13. Doug

    Doug Well-Known Member

    RE: Doug

    1981 is oldest account on file. 1 card still have from 85 - 86 - 89 - 90 - 92. One each in 96 - 97 - 98. Rest are all new. Bought a P.C. and can't resist a Instant Decision Card, and Free Bill Pay makes it easy.
  14. Momof3

    Momof3 Well-Known Member

    RE: Doug thanks

    Thanks for the info:) I too love those instant decisions, but I have sworn off them all until after I get my house. No matter how tempted I get. My new years motto NO more Inquiries!!!

  15. curiouser

    curiouser Well-Known Member


    I agree with everyone's advice here. The one thing that I would add is that it is probably to your daughter's advantage to keep her credit union's MC. Not only does it have a good interest rate, but having a positive long term credit relationship with her CU may be advantageous in the future.
  16. Doris K.

    Doris K. Well-Known Member

    That's what I'm thinking. She belongs to the same credit union I do, and they are great. They offer some excellent rates on both savings and loan products, and like most credit unions, they're not nearly as difficult to deal with as banks. In considering loans and interest rates, they tend to look more at your relationship with them rather than depending strictly on credit reports.
  17. bear

    bear Guest

    In my opinion, keep the cards from top credit issuers like Citibank.. Avoid paying an annual fee...it's not necessarily to carry fees on her credit cards...
  18. mj

    mj Well-Known Member

    What a Mom... I hope your daughter APPRECIATES what you're doing for her!

    Many moons ago I worked in new accounts for a dept. store, so I know a little bit about the basics, but most of my advice here is common sense, experience, and sharing info. I've learned from everyone else.

    I would pick one or two bank cards that she plans to keep for the long-haul (low APRs and no xfer fees) and transfer all of the other balances to those cards.

    I would start killing off the unused store cards and piddly limit bankcards (unless they offer a terrific deal to stay ... ALWAYS listen to retention dept. and see what they offer ... you never know, and in this case, you're negotiating from a position of strength- i.e. she could xfer to another card, or dip into savings to pay it off anyway.

    That's something else to consider - dip into savings to pay off any high-rate card. Most likely she'll "earn" more by paying a 18% cards vs. what she earns in a bank account (or stocks, now that I've looked at my last year mutual fund performances :( ... )

    You sound like you've got the right plan in mind and now it's just a matter of execution (and lots of phone calls).

    Best of luck-

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