00:00:00:00 - 00:00:04:20
Chris
How many credit cards is too many? Because the internet has some very strong opinions.
00:00:04:22 - 00:00:12:07
Katie
Some people say two, others have 20. But the real answer depends on how you travel and how organized you are.
00:00:12:09 - 00:00:17:04
Chris
Today we're breaking down when more cards actually help and when they start hurting.
00:00:17:06 - 00:00:29:16
Katie
If you've ever wondered whether you should open a new credit card or maybe hit pause, this episode is for you.
00:00:29:18 - 00:00:33:03
Chris
Hey, I'm Chris. Welcome to the Upgraded Points podcast.
00:00:33:05 - 00:00:52:00
Katie
And I'm Katie and today we are answering that age old question how many credit cards is too many? So it should be an interesting discussion. You've also got some Capital One lounge news and some reader questions. Before we get to all of that. Don't forget to like and subscribe on YouTube, Spotify, or wherever you are watching or listening.
00:00:52:02 - 00:01:01:20
Katie
And if you have questions or comments for us, you can reach us at podcasts at upgraded points.com. Chris, let's get started with the Capital One Lounge news.
00:01:01:22 - 00:01:26:09
Chris
Yeah. Sad news. The day has come. As of yesterday, Capital One Lounge guest policy has changed. So now authorized users of capital limits, your X and venture X business cards no longer get automatic lounge access privileges. So that's bad news. This is one of our favorite cards because of that perk. We've had plenty of heads up for this, this change, but it is officially here.
00:01:26:11 - 00:01:48:04
Chris
Now, if you like your authorized user to get access, they can pay $125 annually per card, and that will get you in. You can enroll a maximum of four card holders per lounge access on the Capital One Venture X business card. And then there's no specified number of max on the capital limit. Your ex card. Adventure.
00:01:48:06 - 00:02:11:12
Chris
Sorry. Additional card holders will have their priority. Priority pass membership canceled as of yesterday. So if you go to try and use that, it's not going to be working. Cost of gas at Capital One Lounges starting yesterday is now $45 per adult, $25 per child. Just 2 to 17 kids under two are free. And if you are curious about these lounges, go check it up.
00:02:11:12 - 00:02:20:21
Chris
So 36, we did a deep dive on Amex. First chase, first Capital One. But yeah, this is, sad news for for Capital One cardholders.
00:02:21:02 - 00:02:35:15
Katie
Yeah, yeah, this is the bummer. The only positive I will say is their their price per person for guests is like borderline acceptable. Like I, I okay, maybe I'll pay $25 to bring my kid in, but probably.
00:02:35:15 - 00:02:54:16
Chris
Not I think I think that authorized use. So to clarify, you can still add an authorized user for free to these cards. They just won't get that lounge access. So the $125 is purely for lounge access. So if you were to think about it as paying for capital and lounge membership almost by adding by paying that 125, that also could be worth it.
00:02:54:16 - 00:02:56:11
Chris
So you'll have to run those numbers and see if it makes sense.
00:02:56:11 - 00:03:18:11
Katie
Yeah, yeah, definitely. It's not as bad as some of the other lounge. Lounge access guest access numbers. So yeah, but a little bit of a bummer. Thankfully, we hadn't had noticed. So, so, yeah, there's that. Okay, so, Chris, I have a question for you. How many credit cards is too many?
00:03:18:12 - 00:03:19:22
Chris
That is a great question.
00:03:20:00 - 00:03:21:11
Katie
Asking for a friend.
00:03:21:12 - 00:03:37:23
Chris
Yeah, asking for just. I may be in the same same friend as you, Katie. The answer we know can vary a lot. Just depends on who you're asking. One person may limit themselves to 1 or 5, but someone may be juggling 25 cards.
00:03:38:01 - 00:03:40:04
Katie
Just 25. Wow.
00:03:40:06 - 00:03:42:07
Chris
And a weekend.
00:03:42:09 - 00:04:01:15
Katie
So today we're going to share some ideas and advice to help you decide what your comfort level is. So you know, you know, if it's okay to submit another application. Or maybe it's time to cool off a bit because everyone's going to have a different number and you want to play the game within your comfort level.
00:04:01:17 - 00:04:19:13
Chris
Yeah. So I think before we get any further, we just need to make sure everyone understands that if you're going to be opening credit cards, you need to be paying your bill off every single month in full. That is rule number one in the points of my game, because if you're carrying a balance and paying interest, you are losing the value of those points.
00:04:19:13 - 00:04:37:12
Chris
There isn't. It makes no sense. And we all know how quickly that credit card debt can, can, can ramp up. So number one, pay off your bill every month just because you have a $20,000 limit. A credit card doesn't mean you go and spend $20,000 a month. You treat it like a debit card. You're going to go spend you what you normally would.
00:04:37:16 - 00:04:50:01
Chris
Don't go chase, you know, promotions and bonuses just just to get extra points. Unless it's really good. Just kidding. But yeah, as long as you're paying off every month, that is the that is rule number one.
00:04:50:03 - 00:05:14:22
Katie
Yeah. Yeah. And that's just, that's so important. And it's and it's a non-negotiable. And also, you know, if you're doing that, not only will you lose out the value of those points, you will wreck your credit score. Yeah. And the game's over at that point. So the number one rule, okay, so I wanted to talk about a myth that I hear a lot, and that is, having too many credit cards is just terrible for your credit score.
00:05:15:00 - 00:05:42:00
Katie
And as someone with probably, I don't know, between my husband and I, 30 plus cards, and we both have credit scores over 800. I'm here to tell you that that is not true. What Chris mentioned prior is the important bit of that. Your credit score just by will not be awful. Just by having all these cards, as long as you're using your credit responsibly.
00:05:42:02 - 00:06:09:20
Katie
So your score. Yes. When you apply for a new card, your score might get dinged a few points, but then it can recover and even increase. As long as you are using that credit responsibly. Your credit score is determined by lots of different factors. And there are three major, organizations that will kind of give you a different score, and it can vary a little bit, but it's all going to be kind of in the same ballpark, things like the age of your accounts.
00:06:09:22 - 00:06:33:10
Katie
So having a really old credit card that you've had open forever and don't carry a balance that's a really great thing. Your credit utilization ratio, which is how much credit you are using versus how much credit you have. So if you have that credit card with a $20,000 limit, but you have a balance over the month of maybe $1,000, that's great.
00:06:33:10 - 00:07:00:21
Katie
But if you have a $20,000 balance on a card with a $20,000 limit, you're maxing yourself out and that's going to ding your credit score. Your payment history is a huge one. If you miss a payment or late on a payment. I mean, that just takes your credit score and then also your credit mix. So whether that's a mortgage or car payment plus credit card, plus if you have any student loans or debt or anything that particular mix that you have will affect your credit score as well.
00:07:01:00 - 00:07:10:07
Katie
So the simple act of holding a lot of credit cards, that alone doesn't really affect your credit score as long as you are using them wisely.
00:07:10:09 - 00:07:21:12
Chris
No, not at all. And in fact, it can actually help, because once you have more credit and you're still spending that very small amount, right? You're not changing your your spending habits. That credit ratio is only increasing.
00:07:21:18 - 00:07:31:15
Katie
Yeah. Although I will say I got a notice for I forget what card it was. And they said my credit utilization was too small.
00:07:31:17 - 00:07:44:18
Katie
I was like, isn't that a good I mean, it's tight. It's like, I don't know, 1% or something. It's really small. Like it's not a good thing. I think they were just mad because I wasn't using the card a lot, but I mean, nothing happened. My score didn't go down, so the.
00:07:44:20 - 00:07:47:15
Chris
Rest of the bank wasn't.
00:07:47:17 - 00:07:48:15
Katie
Capital one I think.
00:07:48:20 - 00:07:53:19
Chris
Capital N okay. I think Capital One, they they closed one of my cards because I wasn't using it enough.
00:07:53:19 - 00:08:03:02
Katie
Oh yeah. They threatened to do that to me on like capital or they threatened to, to lower my credit limit on my venture ex. And I was like, fine, whatever, I don't care.
00:08:03:04 - 00:08:22:15
Chris
The Capital One, it was my longest, my oldest card, and they closed it and I was like, that sucked. Because that would that hurt my my score because it reduced my, my age of my accounts. Yeah. So I think we'll cover that later in the show, but, but let's talk about right now, when is it time to cancel?
00:08:22:15 - 00:08:38:10
Chris
When you cancel, not when the bank cancels your card. This time of year, it's actually a great time to do a, a wallet audit. It's a great time to look at each card that you have and calculate the benefit value versus the annual fee. You can look back at your previous year and see how many benefits you actually used right there.
00:08:38:12 - 00:09:03:11
Chris
They all come with benefits, but if you're not using them, it's really not worth them. So you should be keeping track of all your cards. Many of us old school have been doing this for a while. Use a spreadsheet. But there's some awesome new tools out there, like card pointers. We did an episode on, that makes this whole process so much easier that keeps track of all your benefits, your annual fees, and just makes this process the the decision making even easier.
00:09:03:12 - 00:09:25:02
Chris
But the bottom line is, if you find yourself getting overwhelmed or losing track of credits, it's probably time to trim your wallet. For cards that you do decide to cancel. A couple rules to keep in mind. Make sure that they've been open for at least a year because banks don't like when you sign up. Get that welcome bonus, and then cancel before the before the, the annual fee hits.
00:09:25:08 - 00:09:41:17
Chris
Sometimes Amex have been known to claw back their their welcome offers, so be careful. There. If the annual fee isn't due yet, you can set a reminder to cancel close to the due date so you can get a little bit start to those benefits. Add a little bit more. Make sure you use all those benefits before you cancel.
00:09:41:19 - 00:10:01:12
Chris
And then there you go. Make sure you use all of those benefits. And for the cards that earn transferable currencies, make sure that you have another card open that will keep those points alive, maybe in the same ecosystem, or maybe they turn into cash back. Or in the worst case scenario, transfer them out to a transfer partner that you're likely be able to use them with.
00:10:01:14 - 00:10:25:01
Katie
Yeah, in a lot of scenarios, you can downgrade a card to a fee free card to keep those transferable points alive. Sometimes those fee free cards, depending on the program, might have different transfer ratios. The city, I believe, is a little weird about that. So just double check all that, but there are ways to keep your points alive if you need to cancel a card.
00:10:25:01 - 00:10:43:14
Katie
And for airline and hotel card, remember that those points that you earn live within the hotel and airline programs so you can cancel those cards. And it's not going to affect your points at all. So that's that's an easy one. You know you don't have to do anything. Okay. So let's talk about something we were just mentioning a few minutes ago.
00:10:43:14 - 00:11:17:19
Katie
Is it banned to keep cards open that you don't use? And like I said, we I have 30 plus cards in my household. I'm not using all of this cards all the time. Most of them sit in my trusty credit card binder and don't get used. It so generally that's not going to cause problems. Although Chris and I were just mentioning, you know, two things to instances where it kind of did and Chris's situation, it caused actually an actual problem, my situation, they kind of just sort of loosely threatened, a potential problem.
00:11:17:21 - 00:11:40:19
Katie
But generally it's not going to cause issues. I've had cards, you know, I've been doing this for over a decade. I have a lot of cards and a lot of them don't get used. And really generally that's okay. Sometimes, especially with like I've noticed this with Amex, if you have some cards open and you don't use them, that's okay.
00:11:40:21 - 00:12:08:19
Katie
But it might affect you opening a new card within that program. My husband got himself in this situation and by he got himself in and I did because I manage all the cards. He had no idea what was happening. I had he had a couple and my card open. I wasn't putting any spend on him at that point, and that landed him in Amex pop up jail, which just means that he wasn't able to get new sign on bonuses for any credit cards.
00:12:08:21 - 00:12:26:13
Katie
So yeah, maybe a little problem. It didn't ding his credit score or anything, so don't worry about that. And I was able to just start using some of those cards. And he was at an Amex pop up jail. And I'm able to get him new cards now. So, generally it's fine, you know, just pay attention.
00:12:26:13 - 00:12:40:18
Katie
If you get a letter that says we're going to lower your credit score, you know, you can either start putting spend on that card to not let that happen or sometimes it happened. It's happened to me a few times and it's like, okay, fine.
00:12:40:19 - 00:13:02:14
Chris
Yeah, no, I don't I'm paranoid now. I do not want that to happen again. So all of my, you know, sock drawer cards that I don't use for my everyday spend every once in a while pulling out, go buy something on Amazon. And you know, I have them all saved in my Amazon account. Anyways, make a small purchase there just so that there's some activity there so that they can't say, oh, you haven't use this card in 18 months or whatever.
00:13:02:16 - 00:13:07:08
Chris
Now, there's at least leaving some activity on there so that I won't be surprised again.
00:13:07:10 - 00:13:30:04
Katie
Yeah, you can also, if you have recurring charges, you can kind of divvy those up between all of your cards. So, you know, one card gets your electric bill, one card gets your water bill, one card gets your whatever phone bill. And then at least all of your cards have a little bit of activity, enough to, you know, keep the banks out of your hair.
00:13:30:06 - 00:13:44:12
Katie
Okay. So I think the the moral of the story here is, and unfortunately, we're not going to give you an answer to the question of how many cards. There's too many. So, when I might have been a bit of a teaser.
00:13:44:14 - 00:13:45:16
Chris
100 is too many.
00:13:45:18 - 00:14:14:05
Katie
100 is too many. The number could be one. The number could be 40. It really depends on you, your specific situation, your comfort level, your ability to pay, your bill on time in full every month. There's a lot of factors that go into it. So you know you have to make that decision for yourself. Hopefully we've brought up a few discussion points today to kind of help you think in the right direction to get to whatever that number is for you.
00:14:14:05 - 00:14:37:00
Katie
And you don't have to have a specific number, but just know, like, I can't handle more than three credit cards. Know that about yourself and don't get swayed by, you know, podcasts like us saying, look at this amazing welcome bonus. Yeah, it could be an amazing welcome bonus, but if it gets you in a situation where you can't keep track of that and you, you know, you start falling back on payments or whatever, it's not a good option.
00:14:37:04 - 00:14:43:18
Katie
So just kind of understand that about yourself and have fun in the game within those parameters.
00:14:43:20 - 00:14:44:08
Chris
Well said.
00:14:44:13 - 00:15:07:02
Katie
Yeah okay. So we actually have some reader questions that we wanted to go over today. First one is from Jackie via email. And Jackie says I'm relatively new to points miles, and I'm learning so much from your podcast. Thank you Jackie. Appreciate that. I've heard about retention offers, but I'm not sure how to get one. Any advice?
00:15:07:04 - 00:15:07:17
Katie
What do you think, Chris?
00:15:07:17 - 00:15:35:17
Chris
Great question. I love retention offers and I don't think we we talked about much talk about the much on the on the podcast. But they're an essential part really of of opening cards and downgrading and closing. It's part of the cycle, at least in, in my experience. And for those listening who don't know what a retention offer is, it's, when your annual fee has come up on a credit card, you can reach out to the bank and ask them if they have any offers to retain you as a client.
00:15:35:23 - 00:15:55:13
Chris
So you can say, hey, listen, I really like this card, but I can't justify paying the annual fee, whatever it is. To have any retention offers, just simple as that. You can sometimes you can do through the chat. Sometimes you need to call. But these offers will generally be targeted to your account. So the representative will take a look and say, okay, well we have this offer for you.
00:15:55:15 - 00:16:18:20
Chris
And it could be almost like a mini sign up bonus if you spend $1,000 in the next month or three months, then we can give you 10,000 points. And these offers can vary depending on the card. From miles to cash back to points. But bottom line is, any time you're considering closing a card, always ask for a retention offer first because you never know it.
00:16:18:23 - 00:16:25:06
Chris
They may just waive that fee automatically or give you some bonus points that make it worth, keeping for another year.
00:16:25:08 - 00:16:43:12
Katie
Yeah, and I might be just me, but I feel like it's been harder to get retention offers in the last couple of years versus, you know, five, six years ago. I feel like they were throwing them out like candy. And I have not had much luck recently. And also a few cards, I just I'm lazy and I'm just like, I don't care.
00:16:43:12 - 00:17:05:10
Katie
Like I'm. So I just can't, which is probably, you know, not the best scenario, but like, I, I asked for a retention offer for you might have been that American Airlines aviator card one year and they gave it to me. But then it wasn't like a slam and deal. It was more or less like I spent something and they waive the annual fee.
00:17:05:12 - 00:17:21:02
Katie
But then I ended up just with this card open again, and it was just something to manage. And I wasn't excited about the card. And I think it was a good lesson because I think in hindsight, on that particular card, I should have just canceled it had been done with it. And that kind of goes back to what we were talking about.
00:17:21:04 - 00:17:46:05
Katie
Sometimes, you know, you have to think about your mental, space and like what you have the ability to handle or manage and, you know, a, a welcoming, you know, retention offer worth $100 isn't worth the time and effort it takes to manage that card. You know, that's something to think about, too. But definitely I've had some good, especially through Amex, some good, retention offers for cards that I actually do want to keep open.
00:17:46:06 - 00:17:49:22
Chris
Yeah. And Amex. Nice. Because you can do it through the chat. Oh, yeah.
00:17:50:00 - 00:17:51:03
Katie
Yeah, yeah.
00:17:51:05 - 00:17:52:18
Chris
If I, if I have to call it.
00:17:52:19 - 00:17:53:06
Katie
Forget it.
00:17:53:06 - 00:17:54:16
Chris
Especially if it's Citi and.
00:17:54:18 - 00:17:55:06
Katie
Oh gosh.
00:17:55:06 - 00:17:57:00
Chris
No, because I've already talked about that.
00:17:57:00 - 00:17:58:13
Katie
You know I didn't say.
00:17:58:13 - 00:17:59:03
Chris
It's going to cancel.
00:17:59:03 - 00:18:01:07
Katie
Forget it, forget it. Yeah.
00:18:01:09 - 00:18:21:22
Chris
All right let's move on. We have one more question. This one is from Don. He sent us an email. He says I end up with multiple Freedom Flex cards because I applied for one outright. And then I downgraded my my Chase Sapphire Reserve card. I know that they don't have annual fees, so it's not costing me anything, but is there any downside to keeping two of the same cards like that?
00:18:21:23 - 00:18:24:11
Chris
Should I cancel one or just leave them both open?
00:18:24:12 - 00:18:52:10
Katie
Katie really good question. So for especially for no annual fee cards, there's really no downside to keeping them open. They're just going to add, you know, history to your credit report. So that's always nice. But for that card specifically, the Freedom Flex is one where it's actually fantastic to have a couple accounts. And that's because that particular card has that five x, bonus.
00:18:52:10 - 00:19:17:18
Katie
Every quarter you get five, percent cash back, which is given as five points per dollar on different categories every quarter. It's, limited up to what is a $1,500 in spend every quarter in those bonus categories. So that particular one fantastic to have two of those, because especially on those quarters, when you have a really nice category, like a grocery store, you can max out both of those cards.
00:19:17:20 - 00:19:40:03
Katie
I have an old freedom card and then we have two. Freedom flex is in my family, so absolutely keep those open. If it was a card, let's say like the Freedom Unlimited, which is, just 1.5% cash back or one and a half points per dollar on all purchases, there's really no reason to have to open, but there's also no reason to cancel.
00:19:40:03 - 00:19:59:03
Katie
So and that's a it could kind of go either way if it's an old card in that situation, I would leave it open. If it's a brand new card and you really have no interest, and it's not one that you can change product change to a different card could cancel that one. But yeah, and for the most part, no annual fee cards just leave them open.
00:19:59:05 - 00:20:01:15
Katie
There's there's no reason not to,
00:20:01:17 - 00:20:04:03
Chris
Great question and great explanation, Katie.
00:20:04:05 - 00:38:09:03
Katie
Thank you. Okay. Well that's going to do it for us this week. If you have questions that you would like to ask us to answer on air, you can email us at podcasts at Upgraded points.com. And be sure to like and subscribe on YouTube, Spotify, or wherever you are watching or listening. And be sure to share this with a travel loving friend and we will see you next week.