I know I've posted about similar plans before. I'm just thinking through variations on the theme. What do you think? Is this an obviously bad idea or is there some significant factor I'm overlooking? I like consolidation and simplification, so I'm shooting for fewer financial institutions and fewer unused credit cards in my life. However, I also care about a useful setup that provides good returns (interest or cash back) and protects my creditworthiness (credit score).
I currently have:
1x Wells Fargo credit card - This is a primary user.
2x Amex credit cards - One of these is a primary user, and the other is a rarely used backup.
1x Capital One credit card - This is only used when I travel internationally.
1x USAA credit card - This is never used, but it is by far my oldest line of credit.
1x Capital One HYSA - This is my emergency fund.
1x USAA checking account - This is my main banking account.
What I think I'm going to do:
1. Open a Fidelity 2% cash back credit card. This will become a primary user, in place of the Wells Fargo card.
2. Open a Fidelity CMA invested in SPAXX. This will become my emergency fund, in place of the Capital One HYSA.
3. Cancel the Wells Fargo credit card.
4. Close the Capital One HYSA.
5. Cancel the Capital One credit card.
6. Open TWO new USAA cash-back credit cards. These aren't going to be super useful to me until I retire from the military (6ish years from now). For now, I am opening them so the lines of credit can age.
7. When I retire from the military (6ish years from now), cancel the TWO Amex credit cards. Once I leave the military, I'll be subject to their high annual fees, and I don't want that.
What I'm worried about:
A) That list includes opening 3 new credit cards with 2 institutions. Can my credit score take that hit? How fast will it recover?
B) That list includes canceling 2 credit cards. One of them is 8 years old. Can my credit score take that hit? How fast will it recover?
C) Is a Fidelity CMA invested in SPAXX an appropriate place to keep an emergency fund?
Other background:
- My credit score is 785.
- I do almost all my spending on credit cards and pay the balance in full every month.
- I do not plan to buy a house in the next year.
- I will most likely not buy a house in the next 6ish years (till I retire from the military).
- I know that I could just "stick the credit cards in a drawer and forget about them." That doesn't jibe with my opening statement though.
- USAA will not convert my existing points reward credit card to a cash-back credit card without shutting down my oldest line of credit.
I currently have:
1x Wells Fargo credit card - This is a primary user.
2x Amex credit cards - One of these is a primary user, and the other is a rarely used backup.
1x Capital One credit card - This is only used when I travel internationally.
1x USAA credit card - This is never used, but it is by far my oldest line of credit.
1x Capital One HYSA - This is my emergency fund.
1x USAA checking account - This is my main banking account.
What I think I'm going to do:
1. Open a Fidelity 2% cash back credit card. This will become a primary user, in place of the Wells Fargo card.
2. Open a Fidelity CMA invested in SPAXX. This will become my emergency fund, in place of the Capital One HYSA.
3. Cancel the Wells Fargo credit card.
4. Close the Capital One HYSA.
5. Cancel the Capital One credit card.
6. Open TWO new USAA cash-back credit cards. These aren't going to be super useful to me until I retire from the military (6ish years from now). For now, I am opening them so the lines of credit can age.
7. When I retire from the military (6ish years from now), cancel the TWO Amex credit cards. Once I leave the military, I'll be subject to their high annual fees, and I don't want that.
What I'm worried about:
A) That list includes opening 3 new credit cards with 2 institutions. Can my credit score take that hit? How fast will it recover?
B) That list includes canceling 2 credit cards. One of them is 8 years old. Can my credit score take that hit? How fast will it recover?
C) Is a Fidelity CMA invested in SPAXX an appropriate place to keep an emergency fund?
Other background:
- My credit score is 785.
- I do almost all my spending on credit cards and pay the balance in full every month.
- I do not plan to buy a house in the next year.
- I will most likely not buy a house in the next 6ish years (till I retire from the military).
- I know that I could just "stick the credit cards in a drawer and forget about them." That doesn't jibe with my opening statement though.
- USAA will not convert my existing points reward credit card to a cash-back credit card without shutting down my oldest line of credit.
Statistics: Posted by slippinsurlies — Wed Sep 04, 2024 8:50 pm — Replies 0 — Views 42
