available credit limit vs. credit age?

[Sneaks]

I have had the same no rewards, low credit limit Capital One card for five years. I've tried to request a credit limit increase, but it won't let me. I got the card initially for a trip to Europe because Capital One is the best in terms of low fees for using it abroad. I now use the card for everything, but pay off the balance every month. I've had a few late payments (by a few days) and at one time did have some debt sitting around on the card, but that was back in college (3-5 years ago). I have a pretty clean record with the card, as far as I am aware. They say they won't increase my available credit limit because with the card I have, they simply don't allow it. They claim Capital One is constantly looking at my history with them and would offer me an increase if I was eligible.

I was thinking about closing it and opening a new card with better rewards and greater credit limit, because I heard having a lower credit limit limits the amount of good credit you can earn. But, now in this chat room I read about how the AGE of your credit is worth something too.

So, if I'm using (but also paying off) about 40% of my credit limit every month... should I get a new card? If so, what cards does everyone like? And if I get a new one, should I cancel this one?

[msuroo]

Are you paying an annual fee on your current card? If not, just keep it open. Buy lunch on it once a month or so just to keep activity on it, but use a higher limit (hopefully rewards earning) card for the majority of your spend.

[L0coM0tive]

If you don't have a problem with using any credit you have, you can just leave it open and put a small revolving balance on it (say, Netflix) and pay it off every month. Having more available credit is better. Your credit utilization rate (available credit/used credit) is the single greatest factor that influences your score.

[msuroo]

Your credit utilization rate (available credit/used credit) is the single greatest factor that influences your score.

The single greatest factor that influences your score is easily payment history. Nothing will kill a score faster than delinquent payments/defaults.

[Maledictus]

I was thinking about closing it and opening a new card with better rewards and greater credit limit, because I heard having a lower credit limit limits the amount of good credit you can earn. But, now in this chat room I read about how the AGE of your credit is worth something too.

A minor point but open a new card first. (not that you wouldn't but seeing it written in that order set off my OCD) Remember that applying for credit cards can change your credit rating and the last thing you want is a bunch of failed applications on your credit history, so only apply for one card at a time.

this is UK based but I think most of the information is applicable. I believe the AGE of the credit is relevant but most people check with at least one of the main two (three?) agencies so your current history will count for something. The advice as it relates to Experian should be relevant at least.

[Sneaks]

Thanks, guys! This was pretty much what I figured, but I wanted to get some feedback. Anybody have a favorite rewards card they want to recommend??

[spezzy]

So here's a question:

Why even use it at all? Does the actual act of paying it off every month (even if it's $5) do something?

[msuroo]

So here's a question:

Why even use it at all? Does the actual act of paying it off every month (even if it's $5) do something?

It keeps it as an active account. The reason for not closing it in the first place it is to show that you have a long-standing credit account - that only matters if it is active.

[msuroo]

Thanks, guys! This was pretty much what I figured, but I wanted to get some feedback. Anybody have a favorite rewards card they want to recommend??

It honestly depends on what you want out of it. If you aren't traveling a lot already, a specific hotel/airline branded affinity card probably isn't the best choice. (Not to knock them entirely - because of my travel habits, I tend to earn a 3-4% return on all spend through my Delta Amex - that's unlikely for an infrequent traveler though).

If you travel some, the Capital One Venture card can be a good option - it gives you 2% back on all spend, but it has to be used on travel. If you want to open a brokerage account, the Fidelity Amex gives you 2% on all spend, but it is deposited into your brokerage account.

For a straight cash-back card (which is the right choice for most average consumers), it's tough to beat the Amex Blue Cash Preferred, with 6% back at supermarkets, and 3% back at gas stations and department stores, and 1% everywhere else.

[chasely]

I like my Discover Card. Of course it's discover, so it may not be accepted everywhere. I like the 5% cash back promotions, especially when I can put work expenses on my card.

If that doesn't float your boat, I would do as msuroo said or get a retailer branded car for a store you like (REI, Amazon, Cabela's, etc.)

[msuroo]

...or get a retailer branded car for a store you like (REI, Amazon, Cabela's, etc.)

I've never seen the appeal to these as a primary card - it just screams of being a brand fanboy (which is why I am shocked that there isn't an Apple branded credit card - it would make a killing). I mean, if you spend a lot at REI and pick up the affinity card for REI purchases only, I could see it. But as a primary card? Who spends enough at REI to offset the fact that it only earns 1% everywhere else. I mean, compare that to the Amex blue cash preferred which earns 6% at supermarkets. Is anyone really spending more at REI in a year then they are spending at supermarkets? (I used REI as an example, but almost all retail affinity cards are similar - 4-5% at the related store, 1% everywhere else.)

[chasely]

I've never seen the appeal to these as a primary card. I mean, if you spend a lot at REI and pick up the affinity card for REI purchases only, I could see it. But as a primary card? Who spends enough at REI to offset the fact that it only earns 1% everywhere else. I mean, compare that to the Amex blue cash preferred which earns 6% at supermarkets. Is anyone really spending more at REI in a year then they are spending at supermarkets? (I used REI as an example, but almost all retail affinity cards are similar - 4-5% at the related store, 1% everywhere else.)

As a primary card, there are probably better options. I hadn't heard of AMEX blue cash, and it looks like a pretty good deal, though it does carry an annual fee, and AMEX isn't accepted at all retailers.

Personally, I automate my utilities (gas, electric, water, phone, cable) on my credit cards and use my debit card for everything else. I also put reimbursable expenses on my credit card. Even though I could pay off my card every month, I got the feeling that I was spending too much using my cards. So until I get all my debt paid off, I'll be very debit-heavy

[msuroo]

As a primary card, there are probably better options. I hadn't heard of AMEX blue cash, and it looks like a pretty good deal, though it does carry an annual fee, and AMEX isn't accepted at all retailers.

There is a 3% at supermarkets version with no annual fee. I'd still argue that's a better deal than any retail affinity card. My primary card is an Amex, and the "not everyone takes Amex" thing is basically a non-issue. I obviously carry a Visa for times when I run into it, but easily 95% of my spend goes through my Amex. Certainly shouldn't be a deal breaker when determining the best rewards earning potential.

Personally, I automate my utilities (gas, electric, water, phone, cable) on my credit cards and use my debit card for everything else. I also put reimbursable expenses on my credit card. Even though I could pay off my card every month, I got the feeling that I was spending too much using my cards. So until I get all my debt paid off, I'll be very debit-heavy

What do you mean by "you got the feeling you were spending too much"? Do you feel like your spending habits change depending on which piece of plastic you lay on the counter? If so, then by all means keep using the debit card - cc debt = bad. Otherwise, you're just throwing rewards away.