CC paid off, zero balance, NOW WHAT DO I DO?

[mbrazil05]

with time, $$$, patience and a ton of advice from members of this board. I finally managed to pay off my two credit cards. No I don't plan on going back into debt again. My questions are

 

1. My current interest rates on my CC are 25% and my bank is offering me to switch cards, should I do so? I can select cards that offer points or miles but at the same interest rates and with fees, should I switch? my current CC don't offer anything.

 

2. What should the utilization rate be? 10%, 20% 30%? I see all types of responses and wanted to get a bit more clarity

 

3. My goal is to boost my credit score up from a 730 to 800+, any suggestions on how to accomplish this?

and lastly share with me any other tips you think i can use to increase my credit rating.  Thanks to everyone.

[shifter]

Congrats! You need more than 2 credit cards. At least 5 is minimum for the best scores.

 

As far as balance, the ideal for scoring is $2 on one card and the rest zero. But in the long run, if you keep the balance under 10%, you'll be fine.  

 

The $2 trick is a good idea to do now and then when that one card updates, your score will increase and then you can app for 2 or 3 new cards. As far as which cards to get, which ones do you have now and what does you the most good - travel points or simply cash back? 

[mbrazil05]

can you give me a quick tutorial on cash back vs travel point?

 

as far as the $2 trick. are you saving, I should keep a $2 balance and let it report? how long should I do this for?

 

as far as credit card, I have a capitalone quicksilver and a captialone Platinum. I believe my interest rates are $25.5%APR with a $40 annual fee and my other is a 28% no fee.

Edited November 28, 2024 by mbrazil05

[chicagorich]

Go for cash back. Interest rate doesn't matter if you pay your balance in full each month. Personally, I wouldn't pay an annual fee for a credit card.

[Flyingifr]

14 hours ago, mbrazil05 said:

can you give me a quick tutorial on cash back vs travel point?

 

as far as the $2 trick. are you saving, I should keep a $2 balance and let it report? how long should I do this for?

 

as far as credit card, I have a capital one quicksilver and a capital one Platinum. I believe my interest rates are $25.5%APR with a $40 annual fee and my other is a 28% no fee.

The main difference between cash back and points is the CC issuer cannot change the value of cash back. The CC issuer CAN change the value of the points at will. For example - a CC issuer gives you 1% cash back on all purchases. Once the cash back accrues into your account, a dollar is a dollar pretty much forever. Yes, the CC issuer can change the percentage of the cash back, making it either easier or harder to accrue the money but once it is yours, its value does not change. With points, the CC issuer typically give you 1 point per dollar with some bonus categories. The CC issuer can change that ratio at will, just like with Cash back. But... the  cc issuer can also change the value of the points by increasing the number of points needed to redeem something. This point valuation can happen at any time for any reason.

[shifter]

19 hours ago, mbrazil05 said:

can you give me a quick tutorial on cash back vs travel point?

 

as far as the $2 trick. are you saving, I should keep a $2 balance and let it report? how long should I do this for?

 

as far as credit card, I have a capitalone quicksilver and a captialone Platinum. I believe my interest rates are $25.5%APR with a $40 annual fee and my other is a 28% no fee.

Yes, one card let report with $2 and the rest PIF before the statement cuts. 

 

As far as new cards, look to get in with some better issuers like Chase, Amex, Citi. Definitely want to diversify from C1 ASAP. Interest rates don't matter. 

[mbrazil05]

why diversify? how will it help me? what's wrong with C1? talk to me my friend

 

ALSO If I was to apply to another card, will it be too soon?

Edited November 29, 2024 by mbrazil05
update

[shifter]

1 hour ago, mbrazil05 said:

why diversify? how will it help me? what's wrong with C1? talk to me my friend

 

ALSO If I was to apply to another card, will it be too soon?

Too soon for what? You never want to have only cards with one issuer in case they decide they don't want you as a customer anymore. 

[cv91915]

On 11/28/2024 at 1:49 PM, mbrazil05 said:

can you give me a quick tutorial on cash back vs travel point?

 

From my perspective, unless you both spend a lot in general and travel a lot, I'd go with cash back.

 

If you travel a lot you will earn points/miles from actual flying, hotels stays, etc., and you'll likely have points in multiple loyalty programs, which brings flexibility when you do redemptions.  

 

If you spend a lot in general, using travel-points cards helps the balances accrue more quickly... and there are some solid values out there for redemptions.

 

But in the absence of those two things, you're likely to end up with small buckets of miles and points that won't work for most of the specific trips you want to make, so the points will just sit there while you're still paying cash for most of your travel.

 

I still put the first $50,000 in annual spending on my Aviator Silver, because the spending itself plus the bonus thresholds help me renew my AA status, but that was devalued so thoroughly in 2024, I'm even re-thinking that.