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.
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
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
- 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
- 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.