Why I have 11 Credit Cards…

What's up you guys? It's Graham here. So how ridiculous is this? I now have 11 credit cards! Now I was perfectly happy and perfectly content having 10 credit cards. I really didn't need another one. But I saw the Credit Shifu, who uploaded a video the other week, that you can get a hundred thousand points for signing up in branch for the Chase Ink Business Preferred.

When I saw this, I thought to myself, you know what? I already have over three hundred thousand points between these cards that I have not even used yet. I really don't need another card. So I immediately went down to Chase Bank and I got another credit card. I got the Chase Ink Business Preferred so I can get the hundred thousand points. This is also credit card number eleven for me.

So let me explain you guys exactly why I have eleven credit cards. So for the amazing benefits and perks I get from having these cards, and also some of the credit card myths that I really wanted to debunk. So first off, let's talk about why I have eleven cards, and the answer is why not?

But in all seriousness, there's zero downside to having these cards, so I may as well just have them. The majority of these cards here cost nothing to keep open, so I may as well just keep them around. But the credit scoring algorithms look at four main factors when determining how you can get a really high credit score.

The first factor is the length of your credit history. Now the longer you've opened your credit, the longer those lines of credit have been established, and the more it weighs in your favor of having a higher score. This means I am never getting rid of my oldest cards that keep the longest established history on my account.

For me, my Bank of America Cash Rewards Card, a local credit union card, a Wells Fargo Visa, and also a Capital One card. Now the only card from all of those that actually charges an annual fee is the Wells Fargo Visa card, which I never recommend anybody do because it's a total rip-off. But I paid twenty-five dollars a year just to keep this credit line established because it's one of my oldest credit lines.

Now like I said, the other cards are entirely free, and I keep them open just to keep them open because why not? But I never really use any of them. I just put them aside in there.

Now the second fact that the credit scoring companies look for is how much credit you have available to you. Do you have $1,000, $10,000, $100,000 or more than that? Now generally speaking, the more credit you have available to you, the less likely you are to use all of that credit, and therefore it lowers your credit to debt ratio.

So let's say, as an example, you have a thousand-dollar credit line and you put $1,000 on that card. Well, when you do that it looks like you're basically just maxing out that card and using 100% of the credit available to you. But on the other hand, if you charge $1,000 to a credit card and you have $100,000 available to you, it looks like you're only using one percent of your available credit.

And the credit scoring algorithms see this, and they see that you're only using a really small percentage of the total credit allowed that you could use, and they increase your credit score. This is also what's known as the utilization ratio, which is basically the amount of credit you have available to you versus the amount you actually use.

In between these 11 cards, I have a little bit over a hundred and thirty thousand dollars in available credit. You know, even though I will never need a hundred and thirty thousand dollars of credit, and even though I will never put more than like a grand or maybe two grand on these cards at a time, and I pay it off in full, just having the extra credit available lowers that utilization ratio and helps out my credit score. Plus, just having one hundred and thirty thousand dollars in credit is just cool to have.

The third factor when determining a credit score, like I touched on in the previous topic because they go hand in hand, is called the utilization rate: how much credit you have available to you versus how much you use. Now like I touched on in the last topic, when you max out a card or when you use a high percentage of the credit you have available to you, it's seen as a higher risk because you need to borrow more money, and that affects your credit score negatively.

Now this is the same whether you spend $500 on a five hundred dollar credit line or ten thousand dollars on a ten thousand dollar credit line. They just look at the utilization rate to determine how much credit you have available to you versus how much you actually use. So basically, if you spend a thousand dollars on a thousand dollar card, you just maxed out your credit line.

But if you spend a thousand dollars on a hundred thousand dollar credit line, you're seen as a lower risk because you've only used a small percentage of the available credit, and this will help your credit score. So this means that by keeping eleven credit cards open, I can easily spend ten thousand dollars between the cards and keep my utilization rate extremely low.

Now the fourth factor when determining your credit score is how often you pay on time. Now this goes without saying; never pay a credit card off late. Always pay it off by the time it's due in full. No, I have never once ever had a late payment. I have always paid off these credit cards in full by the time they're due, and if I'm ever worried about possibly forgetting something, I just put it on auto payments and make sure no matter what, all of these credit cards are paid off in time.

Doing this is absolutely essential because the last thing you need is to have eleven credit cards, forget one of them, put some money on it, get a late payment for like a few hundred bucks, and that will just kill your score. Don't do that! It's easily avoidable. You never have to get a late payment; you never have to pay any interest on these credit cards. Just be responsible with it.

So because of the reasons I just discussed, I see zero downsides in keeping eleven credit cards open. Now, in fact, I never really use any of them. I really only use two cards regularly: that's the American Express Platinum and the Chase Sapphire Reserve. The other cards, I just put off to the side; I never really use them, but they're there.

But the real reason to have all of these credit cards isn't necessarily to keep a high credit line, even though that's nice. The real reason is to get those sweet, sweet bonus points! I opened up the Chase Sapphire Reserve to get a hundred thousand points. I then opened up the Chase Sapphire Preferred to get another fifty thousand points. I opened up the American Express SPG card to get another thirty thousand points.

I also opened up the American Express Platinum Card to get another sixty thousand points. And the most recent one, and the eleventh credit card, is the Chase Bank Business Preferred to get another 100 thousand points. So this means that just by opening up these credit cards, I can get three hundred and ninety thousand points, which to me is equivalent to fifteen round-trip plane tickets to anywhere in North America and a free week at any Starwood resort.

This also means I get free Priority Pass lounge access anytime I travel, and it's just six hundred dollars a year in travel credits, upgraded rooms, and so many other perks and opportunities. All of this just for opening credit cards and spending money I would have spent anyway.

For instance, on my 11th credit card, it requires I spent five thousand dollars in the first three months to get 100 thousand points. Now I'm not going to go out there and just spend five thousand dollars just to meet the minimum spend because that would be a huge waste. Instead, I waited until I was in the middle of replacing a roof on one of my properties and instead of writing the contractor a check for the full amount, I told them just to put five thousand dollars on the card, I write you a check for the rest, and then I pay off the card in full before it's due.

And there you go! I put five thousand dollars on the card with money I would have spent anyway and I get a free 100 thousand points. Again, for me, this is equivalent to four round-trip plane tickets anywhere in North America for free, just for opening the card.

Now I also did something similar about two years ago where I opened the Chase Sapphire Reserve, Preferred, and Amex Starwood card within the same week. Now this meant I believe I had to spend a minimum of $13,000 between these cards in three months in order to get all of the points. So because I was in the middle of a renovation at the time, I just charged the renovation materials and some of the contractor bills to two of these cards instead of just writing it with a check or instead of paying it off with one of my other cards.

So I can get those sweet points. And because of doing all of that, I ended up getting about 190,000 points, which to me is worth a little bit more than $3,000. Plus, not to mention the three to four hundred dollar travel credits that it got in addition to that for free, just for opening up some credit cards and spending money I would have spent anyway.

So the trick is when doing all of this, and it's really simple: it's just don't be an idiot with all of the credit you have available to you. Credit card companies assume that the majority of people out there will open up a credit card for the points, then buy things they wouldn't have ordinarily bought, not pay them off in full, and they will pay an insane amount of interest on those cards.

And that interest outweighs the meager amount of points that the credit cards initially offered just to lure in customers. But I would expect you are smarter than that. Instead, what you're going to do is open up a credit card, spend money you would have ordinarily spent anyway to meet the minimum spend, get those points, pay off the credit card in full, and be a responsible citizen by not paying any interest on a credit card.

Now in return for being a responsible adult, you will be getting a lot of free points, free travel, free perks without spending a dime in interest. Use this as an excuse to take a vacation entirely for free, or just save them up and take a trip around the world first-class. Do whatever you want to do without paying a dime in interest to credit card companies.

Now there's definitely a myth out there that having too many credit cards will lower your score, and this is something I'd like to debunk. The answer is a little bit yes, but mostly no. Anytime you apply for a new credit card, where someone runs your credit, it will temporarily lower your score a few points.

This is because the credit scoring algorithms look for people who are actively seeking credit. Generally speaking, the people who are trying to get higher lines of credit are seen as a higher risk because they need a larger amount of credit, and therefore because they need it, they're more likely to default, and therefore it just temporarily lowers your score.

But after six months, your score returns to the way it was before, and it's pretty much like it never even happened. But for someone with an established credit history, going from like a 794 to a 791 is not really a big deal. In some weird situations, I've seen it where the credit score actually goes up after applying for credit cards. Don't ask me why; I have no idea.

Maybe the credit scoring algorithm is drunk; no clue. But it doesn't really make that big of an impact on your credit score. But in terms of actually having too many credit cards, there really is no such thing. The more credit cards you have, the more lines of credit you have established, and also the more credit you have available to you, which overall will lower your utilization rate, thereby increasing your score.

And that's why there's pretty much no downside to keeping all of these credit cards. I will probably continue to get more credit cards depending on what offers become available.

So that is, you guys, why I have 11 credit cards and why none of this really impacts my credit score negatively. My credit score pretty much covers anywhere from 770 to about 790, and with that score, I can pretty much get the best rate and the best terms on any loan or credit card I apply for.

So if you guys are interested in learning more about this, I would highly recommend you check out the Credit Shifu's YouTube channel, also the Points Guy's blog, and also the Reddit Churning community. I will link all of these down below in the description for you to check out.

So anyway, you guys, I'm off to spend some money on my credit card. But thank you so much for watching! If you guys enjoyed this, make sure to give this video a like. It does really help out a lot. And if you have any questions, feel free to comment down below; I will do my best to answer as many of your questions or comments as possible.

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