Question
Hi everyone,
I graduated from college last year, and got my 10,000 mile bonus (yay! helped me get home to hawaii!). I didn't really think to upgrade my college plus visa because I didn't think my cc bills would be increasing.
However since I've started work life - WOW! All of a sudden there are CC charges all over the place - car, utilities, travel expenses. I have been toying with the idea of switching to the Signature card to get 1/$1 since I only get 1/$2 now.
My dilemma is that I don't want to get another CC account added to my report, (I've got several already from silly college freshman days). Yet, I want to maximize the number of miles I get for obtaining a Signature card.
I know I can upgrade my card for 5,000 miles. I am assuming that this will just change the status of my current account from College Plus Visa to the Signature Visa without an affect on my credit?
At the same time, I see promotions to open a Visa Signature for 15,000 miles, w/ no annual fee. Is there a way I can get in on that deal without having another account number added to my credit report? Or is the upgrade all I can do at this point?
One last question. I read in a thread here that the College Plus program is different from the College Plus Visa card. So if I upgrade my card, will I still be in the College Plus program? I want to make sure to get the 10,000 miles in case I go to grad school!
Thank you so much for your advice. Sorry this email is so long!
Answer
My advice: Open a new account - it won't hurt your credit score and you would get 15K bonus miles. You need to open more than 3 accounts to hurt your credit score.
Answer
And cancel or close out any accounts that you are not using. Unused credit lines still contribute to your overall contingent liability and could harm your credit score. This includes any store cards (like a Macy's) or other accounts.
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My advice: Open a new account - it won't hurt your credit score and you would get 15K bonus miles. You need to open more than 3 accounts to hurt your credit score.
Answer
And cancel or close out any accounts that you are not using. Unused credit lines still contribute to your overall contingent liability and could harm your credit score. This includes any store cards (like a Macy's) or other accounts.
Good advice, we own some apts. and many accounts on your credit report does not look good. Good for you though that you are starting the milage gathering so early! Happy travels.
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Thanks so much for everyone's input so far! I'm hesitant to change my credit scores by closing or getting new credit cards because I may be buying a house in the next year or two. I've read that even closing credit cards will still keep them on your file for 2 years. Wouldn't this look suspicious when applying for a loan?
Thanks for the encouragement! I get really excited about getting miles!
Answer
And cancel or close out any accounts that you are not using. Unused credit lines still contribute to your overall contingent liability and could harm your credit score. This includes any store cards (like a Macy's) or other accounts.
It can also hurt your score if you close out the account. Say if you have cards totally $50K and you have $10K in balances, which means you have a 20% utilization rate, which is acceptable. If you close some of your card accounts to $20K, you utilization rate would be 50%, which is not so good.
Regarding the original questions about upgarding your account, I would call up customer services and request an upgrade and miles. I did this a few years ago.
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A mortgage broker friend of mine once informed me that having too many unused credit lines (namely in the form of credit cards) can hurt one's ability to obtain a good rate on a home loan. The reason? One can always carelessly "max out" the cards if they've got the credit available, making them a potential credit risk.
I'd echo others' advice to close out any cards you don't have a balance on.
Answer
And cancel or close out any accounts that you are not using. Unused credit lines still contribute to your overall contingent liability and could harm your credit score. This includes any store cards (like a Macy's) or other accounts.
I would keep your cc account active as the CL and age will help with your FICO scores.
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It all depends on your current FICO score (assuming you've already pulled it via myfico.com). If you have a good FICO score (take an average of the big three), getting another card (assuming you have only one hard inquiry in the past 12 months) won't hurt it. Two or three hard inquiries in a 12 month period is fine. The increased credit limit will help your utilization rate. The only negative is that your overall length of credit history goes down.
Now if you're on the fence (this number is up for debate) then you want to be careful. Really have to weigh your utilization rate, total revolving credit, whether you have any negatives on your reports, and if you have any outstanding debt. FYI, you can also boost your score by disputing negs.
I found that FUSA is pretty heinous when it comes to reporting on CRs. If you upgrade your card you might get another cc number. This will appear as if you opened another CC. I've had accounts closed due to suspected fraud where I was automatically issued another CC number and each appear as a separate entry on my CR. Some old ones aren't even closed!
Always make sure you pay your bills on time. Another trick to bring down your utilization rate is to pay ahead of time so the reported balance is low. Don't cancel the old cards even if you don't use it, they help with length of credit history. Ask for a reduction in the credit limit if you are worried about your total revolving credit limit.
btw, I'm no financial expert. Just someone who spend a lot of time recently on credit forums. Those are the real experts.