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Changing credit cards that frequently is bad for your credit, which often costs you more in the long term (e.g. if you ever buy a house). So I'm not sure that's
by SatvikBeri 14y ago
Changing credit cards that frequently is bad for your credit, which often costs you more in the long term (e.g. if you ever buy a house). So I'm not sure that's the example you should give-it can come across as pretty short-sighted.
- littlegiantcap 14y agoI keep the credit cards open, I just don't use them and phase them out slowly over time. I'm very diligent with it, and because I use them often and never miss a payment my credit is quite good. Admittedly though this was simply the first answer that came to mind.
- SatvikBeri 14y agoOh good, sounds like you know what you're doing! Hopefully you keep making small payments, e.g. $5 monthly fees on each card. If you leave a card unused for a long time that can lead to some nastiness and a sudden drop in your credit score later. The reason is basically that accounts with much higher credit lines than they actually use are high risk because they have a small chance of a major default. Source: I used to work in a credit cards division at a major bank.
- bti 14y agoWhat do most banks consider "a long time" to be? I have a number of cards that I rotate usage on. I may go as long as 3 months before charging something on it.
- bsims 14y agoCredit histories go as far back as 7 years, so in terms of 3 and 6 months, it is a relatively short time. This is also why it is a challenge for many young adults to receive fair credit scores. Also, you should at least be charging one thing per credit card so they are still remaining active. As dumb as it may sound, it is actually better for your credit score if you have around $5-$10 on your statement on any given month which achieves a higher credit score vs. paying it off entirely. This is illogical because most smart people just set it up for auto pay and pay it off entirely. Hope that helps.
- SatvikBeri 14y agoThe shortest I've seen is 6 months. I don't have tons of finance experience though, other banks may do it differently.
- bsims 14y agoI'm working on a credit scoring related project and would be curious if you know what your credit score is? Any chance you'd be willing to post scores from CreditKarma.com and Creditsesame.com? I'm curious to see if this strategy is sustainable.
- FelixP 14y agoFormer analyst here who specialized in rewards credit cards. Changing cards or opening moderate numbers of new credit lines will have little to no impact on your credit score if done reasonably.
- SatvikBeri 14y agoYour bank's scoring methodologies were probably better than mine. We raised flags if someone's available credit spiked, or if they closed cards, or if they kept a card open without making any purchases on it for several months.