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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Forget the credit card, tell me you’re on anxiety meds.
As somebody who lives in country where credit cards are mostly used when going abroad for a vacation, this whole comment section is wild.
Ok?
Ok.
cancel
I don’t know what I’m reading.
Here people mostly use debit cards, and we don’t worry about things like credit scores or whatever. Also these cards tend to be free. At the end, they just give you a convenient way of paying with money you actually own.
Why would anyone buy normal stuff using credit? I get it for big purchases as a house or a car. But why go into debt for groceries or a new laptop?
Credit cards offer protection over debit cards. After all, it’s the banks money if something fraudulent happens on a transaction, not yours. I always use my credit card over my debit card mainly for this reason.
Some credit cards offer cash back or rewards which build up when you spend.
I have a direct debit set up to pay off the balance at the end of the month so it just automatically pays itself off.
In the US and Canada, a person’s credit score is used to figure out how safe it is to lend them money. Big ticket items such as cars and houses are often bought on credit with a payment plan that includes interest - so the entity lending the money makes money off the loan. Good credit score = Less risk to the lender = Lower interest rate for the borrower = Less money spent in the long run.
Credit cards are an easy way to build a good credit score. I use mine for almost every purchase I make: groceries, gas, bills, subscriptions, donations. The things is, I pay it off in full each month (so I don’t pay interest fees to the credit card company) AND my card gives me 2% money back on my purchases. So if I use it for $20,000 worth of purchases, I automatically get $400 back. Free money!
Also, my bank limits the amount of transactions I can make in a month to 12. They charge a small fee from the 13th transaction onward. If I had to pay for everything directly by debit, I’d probably end up paying tens of dollars just in fees, each month!
Edited to add: By using my credit card and paying it in full, I demonstrate I’m trustworthy when it comes to credit, because I pay it back. That’s what a lender wants! This makes my credit score go up, which in turn helps me when I want to buy a car or get a mortgage on a house. I got my first credit card when I was 18, following the advice of my parents, and that has served me extremely well 15 years later! Who would you rather lend $20,000 to: someone who makes $50,000 and reliably pays back their credit card in full each month for 10 years and has zero debt, or someone who makes $500,000 but carries a $100,000 debt on their credit card?
So people who are savvy about credit do not buy everything “on credit” just because they pay for it with a credit card. It is legitimately a good way to save (or even make) money, at least in the US and Canada.
How is this kind of discrimination even legal there?
Credit cards have good protections against fraudulent webshops and often provide free insurance against damage and theft. This makes it worthwhile for buying a new laptop.
My card is automatically fully paid off at the end of the month, so mhe debt is very temporary
But you still pay interest for basically nothing.
Interest is only charged on the outstanding amount going into the next month’s cycle. Paying it off every month means all purchases are interest free.
Fair enough then, never used this kind of service.
If you’re fortunate enough to live in a country without credit scores, I’m jealous!
Ppl downvoting you is wild. Let’s not bring in toxic reddit traits. Not everyone is from BurgerCredit land. Perfectly valid question. SO to Stelor for explaining in a reply.
You’re financially ruined.
Give up all hope and mail me your credit cards, OP. I’ll “dispose” of them “properly” for you.
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
find one that has no fees. pay it off every month. it doesn’t matter what your credit limit is
Opening and closing a new accounts has literally no effect on your credit score.
The credit agencies pulling your report has a pretty minimal and very short lived.
Your score was an 830. I’ll be surprised if it dips below 800. And that is still exceptional.Unless you have an immediate need to get a really good interest rate, you should not lose any sleep over this.
Experian says 795 now. I’ll be ok. I have no purchases coming up, so I’ll just wait it out.
I don’t think you understand how excellent your credit is. Most banks won’t extend different offers for an 830 and a 795. The amount of emotional energy you placed in this score isn’t commiserate with either your actions or your score. It sounds like you’re not using much of your credit and you’re a high earner. You’ll be fine. You’ll be better than fine honestly. You are well positioned to have access to money to get mostly every material need you want with little hassle. You are more well off than the last majority of people in this world. Appreciate that.
I certainly understand that and appreciate that. I might be an idiot, but I’m not stupid.
Your credit score is higher than 99% of Americans’. Quit your whining and please take your anxiety meds.
Well you don’t have an 830 credit score anymore but it’s probably not too bad, chill though lol
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 around $50k 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 over $200k 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 [redacted] (slightly above national average )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.
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.
Amazing! Good for you. People shouldn’t attack the few people that get lucky. ❤️
It’s at 822 now. RIP in peace credit
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.
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?
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.
I have a chase sapphire reserve (visa) that has a credit limit of $24,000. I don’t understand why you keep picking cards with low credit limits. Do your research first then apply. Plus credit limits are based on your history with the bank and your annual income. If you have a low income, then they won’t approve a large credit limit.
Also do you not read the sign on the stores you shop at? Pretty sure they advertise which card network they accept.
You can also literally call customer service and ask for the stipulations for an increase.
Credit cards are not your clothes.
I know. That’s why I said I’m stupid. I’m beating myself up enough. I know I’m fucking stupid and don’t deserve what I have. I don’t need some internet jerk to tell me how fucking stupid I am so they can feel good about themselves. Thanks, though.
Damn, now you made a stupid comment too. Time to retract and reflect.
You’re being a jerk.
Exactly what you wanted
No. I specifically said what I did was stupid and asked you NOT to be a jerk.
Brother, you need this
I’m a piece of shit. I get it.
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.
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.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.
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.
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.
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.
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
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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Is your name Chidi Anagonye?
I’m Chidi Anagonye, or maybe I’m not?
Does your stomach hurt?
Why are you canceling them instead of just asking for an increased credit limit?
They said that could take years
Calling them today and asking? I mean now yeah of course they’re not going to want to increase it now.
The fact that Amex only gave you a 2k limit after getting a 25k limit means nobody wants you at the moment.
- How much are you spending on your cards every month???
- Why not have more than one card for different things, rather than cancelling cards?
- You generally want to very rarely cancel a credit card, I recommend finding one with no annual fees and sticking with it. You can always have more cards after all.
- A spending limit doesn’t really mean anything if you payoff your credit early, you can always request that your CC company release your credit early once you pay it off early.
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
