Too many Credit Cards. Bad?
 

Wondering for a friend. He has like 5 Credit Cards at age of 21 (22 Soon), TD First Class, TD USD, Presiden Choice + 2 More (And Yes, All on His Name, No-one Co-Sign for him not even his parents)

I have MBNA SmartCash & TD Reward.

I heard having a lot of credit card will give poor credit rating even if you don't use them and remain the balance Zero.

But I did some googling, they said, that is not the case.

(Quote)
Some have cautioned that this practice of having a large number of credit cards can have a negative effect on a borrower’s credit score, the report said. However, experts note this isn’t strictly true as long as all the accounts are managed properly.
(End Quote)

Some also said, if you are applying Mortgages, if you don't have at least 3 Credit Card, you won't be approved or something.

What do you guys think?

Yes it can be because they look at your total potential debt if you maxed all of them out and your income. If you couldn't make the min payments on all of them maxed out + your mortgage payment then that's a problem.

I don't think you need 3 cards. What you need is a long history with one card on which you've always made timely payments and you have had your credit limit raised a few times but again not so high that your payments would be problematic if you maxed it out.

Additionally having credit history with other creditors - utilities, cell phone bills, and such, is a good thing to have too. My dad did us a favor by putting things around the house in our names when we were teenagers so that we moved out with a good credit history when we were in our late teens/early twenties. A good way to get two birds with one stone is have a couple utilities, pay them on your credit card and then just pay your card down routinely.

He told me he will mostly use the First Class and remain everything else Zero Balance, not use them.

Oh, he recently signed up the CIBC Aero God Card, because of the 15000 Aeropoint, then he is planning to cancel it after he redeem the Aeropoint.

Will cancelling credit card affect credit score?

If you cancel a credit card it will affect your credit score negatively.

Yes.

It's recommended that you not cancel credit cards, instead pay the balance off and stop using them.

But what about those CC with Annual Fee, even if you pay off the balance to Zero, and stop using them, they will keep charging you Annual Fees, thus you are forced to cancel it. Thus affect your credit score when cancelling

No, you just need to pay the annual fees.

It's a toss up; pay the fees or take a further credit score it.

Has your friend ever actually checked his credit score, if he hasn't, I'd recommend he does.

Buy why keep the card, if not going to be used, and just let it sit there and the Bank just collect the annual fee. I'm sure everyone be laughing at that. Got a card, pays $120 every year, but don't use the card and it's benefit, because he got the card for the 15000 Aeropoint freebie for once.

He hasn't look into his credit score, I heard there are 2 free government credit score that you can check.

I also heard if too many people looking at your credit, it will also affect your score as well, credit bureau also keep a history on how many times this person has been looked at??

Ok where to start... First off if you want to check your credit score there are two main companies Transunion or Equifax. I like Equifax myself, they offer many services. The one I use only costs $15 a monh and I can check my credit anytime, plus if anything changes they e-mail me rigth away. (I'm not saying transunion is bad, they are also great I have many friends who deal with them. They offer all the same services as Equifax)

As for the statment "Some also said, if you are applying Mortgages, if you don't have at least 3 Credit Card, you won't be approved or something." That is NOT true at all. I only had one card when I got my first mortgage. Then 6 months later I got another mortgage. But at that time I had two cards.

What I would recommend to your friend is to pick two cards (from different companies ie. one from Visa, one from MC) And then cancel all the others. Take the hit on his credit but then in the long run it will be better then have 16 cards or what ever amount he has.

Yup.

I would second this advice.

Also, tell your friend to stop filing for credit they have not intention of using. Bonus Airmiles points are great in the short term, but when it comes time to apply for a mortgage and they are not approved or offered a good rate things change.

Damn...I cancelled my Sears credit card which I was dumb enough to be tricked into obtaining in the first place -_-

Does the number of transactions on said cancelled credit card determine how much damage it does to your credit score?

Currently, I have MBNA SmartCash and TD Green. I already applied for CapitalOne Aspire Travel for some travel points and plan on using purely that along with the MBNA card (keeping the TD one but barely using it).

Honestly, not to sure on that one.

You might be able to find the answer via google or in the article I posted below.


D87c - Have your friend read this article.

How to cancel a credit card - and close it without hurting your score

You have no idea how many people on RFD signs up for random credit card for it's freebies.
Free Aeroplan miles.... free gadget.... free $25 gift card...
They go through at least 5+ new credit cards each year.

:fuckthatshit:

:fullofwin:

Thanks all for reply.

My friend is crazy, Credit Card age limit is 19+, he is only 21, he already have 5

thats like 2+ cards per year

I gotta let him know to stop getting trick with those welcome point etc that benefit short term.

when you do a credit check, they only look at the credit history in the past 5 years or so. unless your friend is planning to apply for a mortgage in a few years or is abusing his credit, i'm not sure why you're making a big deal out of nothing.

A question just pop up.

This is for myself: I have 2 Cards. TD Reward & MBNA SmartCash

The thing is TD Reward Sucks, I need a card who have option features like Travel Medical, Flight Accidental, Extended Warrenty Etc..

TD Green Visa Card would have exactly what I needed

The thing is I don't want to cancel my TD Reward because I have been using for 3 years, and atleast 15K of transactions, always paid on time. meaning good credit history.

Is there a way to transfer that credit history to the TD Green Visa Card that I will be applying, or when opening a new card, you always start fresh.

Or do you guys suggest just keep the TD Reward and use it once or twice for a small amount each month to keep the history going? Then use the TD Green Visa on Electronics or Flights because of the cards option features

You dont need to cancel, your history wont be affected
you just call TD and say you want to switch cards
wont affect your credit
TD user myself, switched 3 times already

td rewards---->TD green---> TD First Class Travel

Is there a negative effect, if you sign up 2 credit cards in the past month?

Let say, you just sign up a CC, then a week or two after, you signed up for another one?

Edit: Got Answer from Credit Specialist

"There would be another credit check for the card. The average client generally does around 3-5 credit checks per year, however if you do several checks all within the same 1 or 2 month period, it can affect your credit more as well"

No it won't. Just "switch" cards. Take a read at the article above
http://www.creditcards.com/credit-ca...-card-6000.php

Hey guys, Would inquiring to increasing your credit limit on an existing card be a hard or soft pull?

Depends on your current income, depends on your payment history. If you had higher income then previous when you signed up, then yes. If you have always paid on time, then double yes, they should be able to raise the limit no problem

I'm pretty sure the 'switch' is actually a cancel and application for a new card... in which case, you're better off keeping the card and letting it expire or just spend a few bucks on it every now and then, cuz the history is worth it.

have you taken a look at your credit report after 'switching' ?

I think its ok unless they're maxed out

it lowers your credit score because you have a bunch of unused credit.

same thing if you have a line of credit and don't use it