4 ms·

I 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

I 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 ago
Oh 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 ago
  What 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 ago
    Credit 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 ago
    The shortest I've seen is 6 months. I don't have tons of finance experience though, other banks may do it differently.
bsims 14y ago
I'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.

SatvikBeri 14y ago

Oh 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 ago
What 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 ago
  Credit 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 ago
  The shortest I've seen is 6 months. I don't have tons of finance experience though, other banks may do it differently.

bsims 14y ago

I'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.