7 secrets of extreme credit card owners
How seekers of big rewards, discounts manage multiple cards -- 10, 20, 30 or more
By Erica Sandberg | Published: November 10, 2015
If you're like the majority of card-carrying Americans, you have three or four cards. More than enough, probably, to cover necessary expenses without being swamped in statements or unintended debt to delete. Yet a small portion of us -- 7 percent -- carry seven or more credit cards. (See "Credit card ownership statistics.")
Why would these folks eschew moderation in favor of maximization? We talked to seven card holders who have mastered multiple card management to find the secrets of extreme card ownership without extreme credit score hazard.
From lowest number of credit cards to the highest, we have:
Secret: Don't fear canceling cards
"I often sign up for cards that have big rewards bonuses and then I terminate most of them within one year," says Chicago resident Ganapati Raman. But doesn't opening and closing the credit door hurt his credit score, making him a high risk customer? Not a bit, he says: "I still have a great credit rating! I have never been denied a credit card. I have bought a home at the lowest rate and my car at 0 percent interest."
Raman has an insider's understanding of credit reports because, as a property manager, he analyzes prospective tenants' credit files for a living. "As long as you're paying the debts off, you're good," says Raman. People fear canceling accounts will ding scores, but "they're misguided. That's what they hear, but it's not important. Never carrying a balance is. And paying on time."
Taking advantage of the "welcome to your new card" points spur Raman on. He uses most to reduce travel expenses, spending them on airfare and upgrades, but cash back on purchases is enticing, too. "I opened a Crate & Barrel card recently because I got $300 for charging $3,000. I'll close it soon."
Managing all these cards is easy, he says, though he's not a naturally organized person. "I'm no more or less special than anyone else," says Raman. "I forget stuff all the time! So I put everything on a Google calendar. It reminds me a few days before payments are due. Otherwise, I will forget."
Secret: Technology makes tracking possible
Charles Carlini, an established New York City music booker, is counting on a pocketful of new cards to get his latest venture -- a publishing company -- off the ground. "Lending requirements have become too stringent, so instead I use credit cards," says Carlini, who can charge $80,000 in case he needs capital. "The interest rates cost more in the long run, but it's the price of doing business. That doesn't bother me. Some of the greatest businesses were started with credit cards."
Creditors approach him, says Carlini, not the other way around. "If I keep the balances down, they start to increase the limits on the cards. Then I get new offers, all the time." He takes pains to pay when he should, but liabilities sometimes linger. "On some I pay off the balances. It depends on the business cycle. We don't get paid unless clients work. There can be a delay because money is so tight all over the world."
To remain on top of so many statements, Carlini employs technology: "I use Mint Bills to keep track of all of my credit cards so I always know when my payments are due and how much I owe. It's on my phone, laptop and desktop computer."
Secret: Give each card a job
James Pollard, from Greenwood, Delaware, is not only the proud owner of a dozen credit cards, but an advocate for making the most out of these accounts -- which means applying for and receiving as many as possible. As long as they come with rewards, that is.
Pollard is the managing director of PersonalFinanceGenius.com, a company that helps people make savvy money and credit decisions. "Whereas some gurus, such as Dave Ramsey, absolutely abhor credit cards, I embrace them," says Pollard. "I have one for casino rewards, one for grocery rewards, one for air miles, one for 5 percent cash back, etc."
The key, he says, is responsible use not avoidance. His FICO score is over 800, which he achieved by regular charging, staying out of debt and always respecting due dates. To guarantee his bills are satisfied on schedule, Pollard set up automatic payments with his bank. Simple, he says.
13 (or so) cards
Secret: Put everything on auto-pay
Not every credit card amasser is ultra-aware of exactly how many accounts they have pen at one time. Case in point: Christine Silvers, from Norwell, Massachusetts, a chief medical officer at a digital health company. "I don't even know how many I have," says Silvers "Thirteen, maybe? I may have misplaced one."
The majority of Silvers' cards are retail accounts, including Amazon, BJs, Children's Place, Target and Orbitz. She uses them for the instant discounts at checkout, which reduces her expenses. Her Delta American Express card, for example, picks up the tab for checked luggage at the airport. "I take a couple vacations a year, more now for work, and the savings add up."
"I'm not a huge shopper," says Silvers. "I only carry two cards at a time and then grab the one I need from the rotating pile. I had a frugal upbringing and want to save money where I can." She doesn't overspend, and sends the entire balance due so she can make money from the deal.
"I'm usually ultra-organized, but things like this have fallen low on the priority list," says Silvers. "So I have everything on auto-pay. I glance at my statements and fully pay them off every month."
Secret: Take the discount and run
Hit the mall, especially during the holidays, and shoppers are bombarded with special, limited-time discounts for opening an account. Christina Marina, a human resources systems analyst from Concord, California, applies for those offers when she can shave 15 percent or more off from that day's purchases, which is often -- all while staying firmly in the black.
There was a time when Marina was in debt, so she is careful to not go down that path again. "I owed $8,000, and I learned from it. I have the willpower now to spend only the amount I'm good with."
She took Suze Orman's advice to start a positive credit history with a trail of active credit cards. That's not always so easy, however, and just recently her Target card was closed due to lack of use. Still, says Marina, her credit score is high.
Managing her cards is easy because so many are dormant. "I don't keep all the cards with me. Most I only use a few times or just that once. They don't fit in my wallet and that's OK because I don't actively use them too much."
Secret: Build a spreadsheet
Open, use, close. That's Allen Walton's credit card mantra. Walton is owner of SpyGuy Security, a spy equipment company in Dallas . This type of card behavior is often called churning, and Walton adopted it about 18 months ago.
"Basically, you sign up for credit cards in order to get the huge bonuses the banks give you," says Walton. "They typically give you anywhere from 30,000 to 100,000 points that can be used for airlines and hotels. You sign up, get the bonus and don't use the card again. It's pretty fantastic!" Most of these cards require at least a minimum spend of anywhere from $1,000 to $20,000, typically within a three-month period, to get the points.
To ensure he gets the most out of each account while preserving a high credit rating, Walton depends on a spreadsheet: "I keep track of the name, credit line, bill due date, current balance, the date I received the card and when the yearly fee is due so I can cancel the card [before then]. Not only do I get free travel, but my credit score has skyrocketed. I'm currently hovering around a score of 800, which will have great benefits when I get around to buying a house."
30 to 35 cards
Secret: A safe for all the unused cards
Frugal Rules blogger and Omaha, Nebraska, resident John Schmoll says he and his wife have been "travel hacking" for the past few years. Travel hacking is similar to churning, but the cardholder hoards promotional card rewards specifically for globe-trotting adventures. The result? Enough credit cards to burst any wallet.
"Once we're done with a card, it goes in our safe to not be used unless a special promotion comes up allowing us to earn extra points," says Schmoll. "We have the credit cards to earn free rewards through our normal spending. We like to travel and have spent very little on it, usually pennies on the dollar."
To guarantee their accounts remain in good standing, they, too, keep a spreadsheet. "I list each card, when we applied, what the minimum spend is to earn rewards and the annual fee," says Schmoll.
Regarding their credit rating, no worries there. The couple has seen their numbers escalate, and they both have sustained FICO scores of over 800.
Common traits of extreme cardholders
Inspired to start applying for a multitude of credit cards so you can reap the rewards? Not so fast. To come out ahead, you'll need three things:
- Spending discipline.
- Organizational skills.
- An above-average credit score.
Without them, warn the extreme cardholders, you'll take on more than you can handle and sink into a sea of plastic and debt. With them, a world of discounts and rewarding trips opens.
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