I initially signed up for a Wells Fargo cash secured credit card, last month, but lately with their changing the ToS and extra fee, I am worried about my choice.
People have asked me not to close that recently opened card just now, because it might affect my history in a very negative way, but recommended that I join some CUs.
I am thinking of getting cash secured credit card from DCU and CUSocal but am thinking - Is it a bad idea to have 3 secured credit card accounts open?
The CU's cash secured credit cards have no annual fee, so unless I am missing something, it should not harm my history just to keep it open (and keep them at ~20% utilization).
I am doing this because there is a risk that I might need to close the Wells Fargo cash secured credit card by year end.
EDIT:
Let me rephrase my question and put in some numbers:
a. My gross income, as a part-time on-campus worker on an hourly wage, will not likely exceed $1k/month
This does not include the federal tax and other associated taxes I need to pay (would reduce my net pay)
b. If I open up two new cards, I will likely keep a credit limit of $500 on them
This means, then, I have the WF $1k card and two new $500 cards
Now:
My understanding is that having multiple credit accounts with low credit lines is better than having fewer credit accounts with higher credit line. In other words, my understanding is
- 3 cards with a $500 credit line: Good
- 1 card with a $1500 credit line: Not (so) Good
I would like to have a thicker credit report than a thin one, and perhaps having accounts with multiple lenders is a better way of doing that?
I think 1 is too less but perhaps 3 is too much and 2 accounts would be sufficient to have a "thicker credit report", or is this "thin" and thick credit report all BS
How is the Debt-to-income ratio calculated?
Is the 'income' my net pay after taxes or gross income, before all deductions?
- Is it the ratio of the oustanding balances you have on your credit accounts to your income
or
- Is it the ratio of the sum of credit line you have on your credit accounts to your income
In other words, with an income of $1k a month and a balance of $300 on all my credit accounts, would my debt-to-income ratio be:
- i. 300/1000 (oustanding balance/income) = 0.3
or
- ii. 1500/1000 (sum of credit line/income) = 1.5
My target is to have a healthy credit history with a good score such that I can
get an unsecured card with a good rate and nice features in a year
not face issues renting an apartment near work (I had to put down 3 months rent as deposit with the landlord)
be qualified for a postpaid wireless/cellular plan (all I am eligible for now are prepaid plans)
get a good rate on a loan for a new car
I am not thinking about mortgage or anything that long term at all.