I signed up for an American Express preferred Blue card and got approved for a limit of $25,000. I have a 830 credit score. I realized that the places I shop don’t accept that card and you have to pay for it yearly so I canceled it.
Then I decided I was going to get a Costco Visa. Once I signed up the credit limit was only $5,000. So I canceled that one. So I stupidly signed up for a Wells Fargo Visa and that was $4,000.
Don’t leave yet and please don’t make fun of me but I’m not done being stupid. I decided I wanted a different American Express card and when I signed up for it the credit limit was $2,000 so I canceled that one.
Again I know I’m fucking stupid but how bad did I just fuck up my credit?
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Was it dumb? Yes
Is it easily corrected with some on time payments over the course of 6 months? Yes
They cacel each other out. You good
oh that’s right we don’t have a credit card or travel Lemmy yet. Okay, take down a few notes.
First you haven’t done anything terrible. Probably you’ve knocked your credit score down about 10 or 15 points. Not because of the opening and closing, but because multiple hard inquiries of your credit can cause the score to drop. That will repair itself over the next six months.
Something good to know is that American Express cards will only give you their sign-up bonus once per lifetime per person per card. I know that Chase will let you reapply two years after you drop a card and will give you the bonus, and I believe that’s the standard for other Visa cards or MasterCard.
I strongly recommend that you look at cards based on the rewards plan that they’ll provide you and the amount of spending required for you to be able to get the reward. I own several businesses so a $4000 or a $6000 spend is not a big deal for me over three months, But when I didn’t have that, I would need to figure out if I could make that spend over the required time period and go one card at a time. so back in my early days I was getting one card every three or four months, and then canceling cards about a year or two in, and then reapplying for them two years later.
I know that sounds complicated, but when you wanna fly to Australia, free and business class, and you don’t have a lot of money, that’s how you work the system.
Something good to know is there are essentially three tiers of credit cards. There are basic cards that will give you a lower reward, have a low spending requirement, and are generally with no annual fee. Then there is a second tier of cards, which will usually have a $95 per year fee, which is waived for the first year, and they have more rewards and perks. Then there is a third tier of cards that will have much higher spends (sometimes $6000-$10,000 in 3 to 6 months), but they will have much larger rewards along with about a $500 fee. I recommend staying away from the higher to your cards unless you can play that game and it’s not an issue.
OK, that is our Lemmy primer for everyone interested in credit card points.
Edit: I also strongly recommend you get one of the lower tier cards now, and keep that one with no anual fee from now on. Part of credit history is card longevity; I am a charter cardmember of a card from years ago for that reason.
Iirc, closing an account impacts your credit not because you cancelled your account, but because it impacts your debt/credit ratio.
You have 2 credit cards. Card A has a 10k credit and 2k balance. Card B has 10k credit and 0 balance.
So your ratio is 2k/20k or 10%.
If you cancel card B, your credit line is now 2k/10k, which is 20%. This increases your credit utilization, which impacts your score.
Opening and closing a bunch of cards without any balance shouldn’t have a significant impact on your score, maybe a few points.
Hard inquiries can be bad but most credit cards use soft inquiries nowadays anyway
Forget the credit card, tell me you’re on anxiety meds.
Only one or two until you hit the credit card limit.
You probably dipped your score a bit since any “hard” credit checks will ding your score, especially a lot in a short period of time.
Just cancel that Amex card and get another one, but before you get too comfy with it, consider cancelling it and getting another one.
Talk about a life lesson. Credit cards shouldn’t be a willy nilly oh this one sounds fun. They should take research, making sure it’s what you want.
Also, finding out the card isn’t used anywhere and canceling it shouldn’t count against your credit score.
Credit scores at total bullshit in the first place.
Credit scores at total bullshit in the first place.
Credit scores are mostly fine. They do only one thing. They provide a good measure of how likely you are to pay back a loan. Thats it.
What other companies decide a credit score means and how they use that is bullshit.
Their main issue is all of the sudden hard pulls for new accounts. Each one hits your credit for something like 30 points. I expect doing that over and over rapidly increases that ding each time. They dont want to loan you money if you are desperate for money, so they hit your score if you ask for too much too fast.
Their second issue, credit utilization, i.e how much credit you have that’s not in use, is affected each time they cancel a card. That’s hitting their credit as well, as each canceled card closed reduces their total unused credit percentage.
Between the two, i wouldn’t be suprised if that 830 is 600 right now. The good news for OP is that the new credit dings wear off fast. If they just stop opening credit cards, their credit will be in the 800s again in a few weeks.
They dont want to loan you money if you are desperate for money, so they hit your score if you ask for too much too fast.
Credit score is ‘who can we fleece for the most money’ so that checks out.
100%. It’s a coordinated judgement about who they can get to reliably make them a profit. “Pays the bills on time” is the biggest factor in your credit score.
If you look at each of them (payment history, how much credit is open and not used, how long has the credit been open, how often have they asked for more credit recently, how many types of credit do they have i.e house/car/cc) they all have to do with figuring out if you will pay them.
If the answer is yes, they will give you a giant whirlpool to spend. Once you have it you will likely make them a profit, because almost everyone does. Credit scores are just a way to tell if it’s worth hooking you on “easy” money for them.
It’s credit, a loan, and I’d say this is actually great example of why it’s useful. OP showed one after the other how likely they are to take out credit. Like it or not OPs behavior is a warning sign
Warning sign of what?
That you don’t know enough about credit. Or fraud.
I can agree to that.
Costco only accepts Visa and I didn’t know until after. I’m an idiot.
My cycle is:
- Get new 2% back on everything card
- Card changes rewards so it is no longer a 2% back on everything card
- Repeat
When I lived in the US (before the subprime crash), my neighbors used their dog’s name to sign up for all kinds of free lotteries on the internet.
One day, they were sent a pre-approved credit card with their dog’s name on it.You don’t know the limit until you sign up
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a credit card shouldn’t be about the limit at all. Even with a big project you could have just done it in parts or only done on part on the card. You should never take out cards for a higher limit.
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you could have just called and asked for a limit raise.
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Hard inquiries stay on your report for 2 years but stop impacting your credit after a year
It’s not a huge deal unless you’re planning to buy a car or a house or something relatively soon
You can dispute them but they were all legitimate so you might as well just wait, it’s not that long. Your score was excellent so unless you incur a ton of debt It shouldnt go down all that much. And again, unless you’re planning to do something that is contingent on your credit within the next year or two it doesnt really matter
That’s reassuring. Thank you
For what in the hell does anyone use a credit card, like ever?
As long as you pay it off every month it should be the way you pay for everything. It builds your credit score and is more secure. With a credit card you’re spending their money, so if your card gets stolen you won’t be on the hook for everything. Vs a debit card you’re spending your money, it is much harder to do fraud from the consumer side with a debit card. Plus perks .
I understand if you’re bad with credit, but if you’re not, why wouldn’t you use one?
To build credit 🙃
And building credit is useful to set yourself up for future purchases - a condo/house, car, whatever. The whatever here is bigger than it semese, as having a decent credit score can let you finance all kinds of things at a pretty low rate, if not 0% even today. If you’re saving any extra money in an investment/retirement account, and can pay off your 0% financing offers in full by the time you would start to owe interest, financing at 0% is a great deal even if you have the cash on hand to pay outright.
Yeah, I don’t necessarily agree with the game, but since we’re in it, I play it. All of my purchases go on credit cards. But I never spend money I don’t have, and I pay the statement balance in full every month so I’m never charged interest. The only time I don’t pay the full statement balance is when I buy a new phone since I have the store card with 0% financing. But anything else, never ever ever carry a balance.
It sucks because it’s basically a benefit for people who have good executive functioning and financial literacy, paid for by those who don’t. It’s a benefit I only get because big banks prey on poor people.
I have A+ credit and have never possessed a credit card.
What is A+ credit?
It’s what the guy at the bank told me each time I bought a car or a house.
Cash back rewards cards work well, I end up with at least 2% - 5% cash back on all my shopping.
The key is to treat credit cards like cash e.g. pay your bill in full every month, never ever carry a balance. It doesn’t work for everyone and that’s okay, some people just can’t help themselves and get too spendy and end up in debt.
Other nice thing is that fraud is handled better with credit cards, if my card is lost/stolen no one has a direct line to my bank account and can’t try to drain my bank balance with debit purchases. Sure your bank may/may not void those transactions but in the time it takes for them to “investigate” you’re going to be out real money in your bank account. With a credit card you just dispute those fraud charges and never actually pay for them.
Compared to a debit card, it adds an additional layer between my money and the rest of the world. If my card is wrongly charged, by malice or honest accident, I then have some weeks to sort that out before the money is actually going to be pulled from my bank account. That’s why I prefer to pay by credit card instead of by debit card.
Literally every purchase. Use it like a debit card and build a good credit report before you’re even 30. Shit my credit score was over 800 before I turned 21. My credit wasn’t very thick. But what I had was solid.
Plus every card I have gives me cash back so it’s like getting 1-5% off every single purchase. Plus since I buy things for work and get reimbursed for it I’m effectively making money off of it.
I’m 44yo with A+ credit and have never used a credit card in my life.
Define “A+”
Credit is about length and girth in addition to their scores. By 40 you’d better have an “A+” score. If you’ve had a mortgage for 20 years, paid your bills on time, and had a couple car loans then anything under 800 would be hard to get.
Sounds like you agree with me that a credit card is not remotely necessary for building good credit.
Debit cards have all the same functionality as far as I can tell, and you don’t need to worry about building up debt at predatory interest rates.
Well you don’t have an 830 credit score anymore but it’s probably not too bad, chill though lol
It’s at 822 now. RIP in peace credit
That’s not a bad credit score at all.
I was worried it would tank though.
Why do you care?
Because it matters
No it doesn’t. I’ve been a legal adult for almost 20 years now and not once have I ever needed to use my credit for anything. I don’t even know what my credit score is because I don’t give a single fuck about my credit. If I can’t afford to buy something, I save up enough money until I can. It’s that simple.
You don’t need a credit card with a $25K limit. You don’t need a credit card at all.
Like I said earlier, quit whining and take your meds.
Why does it matter?
I’m not American, but surely going down 8 points isn’t that bad, right?
It’s down 27 points now and likely to go down a bit more. It’s not not BAD though.
Plus it’ll go back up to where it was in a few months.
And you only need a credit score if you’re applying for credit. Are you financing a major purchase in the near future? If not, your credit score is literally meaningless.
No Financing. House is paid off I have like 200k in stocks and savings.
house
Lemmy assemble. let’s eat this rich guy
Let me tell you why I’m so lucky. In early 2013 I bought a 1946 Bungalow at 1400 sq with no basement for $51,900 on a 15 year loan. I paid it off. Last year, my father-in-law died and left his house to his only daughter, my wife. It had an outstanding mortgage of $60,000 left on it. It’s a 2100 sq ft colonial with attached garage and basement. I sold my house for $220,000 and moved into my wife’s childhood home. We paid off the remaining loan.
I am fortunate and got lucky on the housing market. I make $68,000 a year. My wife took the year off, but is a teacher. We are NOT rich, but very lucky. I live near Detroit, where the cost of living is lower and that helps too.
Amazing! Good for you. People shouldn’t attack the few people that get lucky. ❤️
Don’t worry, I am pretty sure it was a joke. But if someone is buying up property for the sole reason of renting then we will be picking up the pitchforks.
Edit: On a unrelated note, I would be more careful about sharing my wealth and salary details to a digit on social media. You can never know when it might backfire in future.
I edited it. Thank for the tip.
I work in the credit card space for a living. DM me if you actually want to chat about how to fix your situation.
Why not share with the class?
Because they’re gonna need OP’s social security number and credit card info in order to look into what can be done to help.
Also their mother’s maiden name and the names of their childhood best friend and 1st pet.
Remember OP, when you get scammed, call them back and ask nicely so they can refund you onto a different card number since that first one is toast.
I assumed they wouldn’t want to look more stupid in public tbh.
gfy
No way Jose
Regardless of how everyone took my message I was being genuine, I hope you get the help you need. The advice in this thread is not great, and I hope you seek a professional outside of this platform for some actual assistance.
I didn’t really need much help. I’m all set for the most part. I didn’t have any financing coming up in the near future, so I think I’ll be ok
Opening a new line of credit is only a temporary hit to your score. Multiple cards in a short time will be a bigger hit, but it’ll eventually pass.
Most if not all of those cards offer a free credit report that could tell you how much of an impact this had on your score and how quickly it improves. If you have another existing card (don’t sign up for another one) you may be able to see the change to your score once these hard credit pulls hit your credit report.
If not, wait a month or so and use one of your free annual credit reports. You get one report per year from each agency for free, with no consequence to your credit score. There’s 3 credit agencies, so in principle you can check your credit every 4 months for no cost.
It could be much worse. I was ready for you to tell us about the massive debt you racked up. At least this is something that will go away over time with no cost or effort on your part.
Lol ikr. I read the beginning of the post and the minute I saw them mention the rather large credit limit I thought the story was going in the opposite direction that it ended up going.
Ok that’s good. Thank you
Could keep all of them that don’t have annual fees, and spread out your purchasing. I have three cards, one that’s 2% off everything, and one that’s more off food, and another that’s more off online purchases. My aggregate credit limit is pretty high even if each one were a bit modest (they aren’t as modest as they used to be though)
You can always pay off your balance more often than monthly. When I first opened my first card, I paid it off every Friday, to make sure the small limits were available if I needed them (I had a credit limit of $1,000 back then). Now I pay them off every payday, still multiple times a month. If you need to carry a large balance across payment cycles, you’ll get stuck on a high interest rate treadmill you don’t want to be on anyway.
The credit limits increase with time. The $1,000 card I started with now has a $10,000 limit. Mostly the limits came automatically, but I did request an increase to be able to pay for a home repair in a single transaction. Now between the three cards I have a lot of limit.
A fair number of places where you might want to spend a lot of money in a single transaction won’t accept credit cards anyway over a threshold. Last time I bought a car after establishing the price I asked about just charging it to a credit card. They were willing to do it only for $2,000, so I had to cut a check for most of the car anyway.
