Thanks for the replies, I hadn't really thought of upping the current limit.
You should ask for a credit limit increase on your existing card. This won't hurt your score in any way and will increase it by lowering your credit usage.
You just opened two new lines of credit and they hurt your score, so I'm not sure a third is what you want.
Also, what are you doing with $3.5k on the card, and why did you want to limit it to $4k? Neither of those is bad alone, but together it is bad for your credit and it sounds like you might want to explore your relationship with credit and spending.
I thought to get another card since I was also dinged for not having enough lines of credit. From what I understand, the inquiries fall off after 2 years, I'm not sure if we would buy inside or outside that window though. Not looking to buy immediately, definitely whatever is best for long term growth.
The card had 3.5K on it because of some home improvement spending, and I wasn't keeping track of the balance. It's paid back off.
The 4K limit is because I was fresh out of college, totally broke, just getting it so I could buy tires, and thought "I've heard these things are dangerous and cause trouble, I'd best cap the amount of trouble I can get myself into as low as possible."
Relationship with spending, I'll be honest here... I handle debit cards excellently, and check the balance daily. Credit cards, for some reason, I check the balance every couple weeks and go "shit, best pay that". Since it's a 4K max, I've always just cash-flowed payments out of the income stream easily, it's usually just food and gas racking up, but I feel generally less in control than I'd like. When we were just starting to mustache, the only way we paid them off was hiding them in our cars for emergencies, and using debit cards. If we kept using them while trying to pay them off, we always just sat at an equilibrium point and never actually got anywhere.
Open to suggestions about that. TBH, at this moment, if I opened another card for daily use, I would want a similarly low limit. If I opened a high limit card for selling tradelines/upping total credit, I would just stick it in the safe and never use it.
You should increase your limit, that is probably killing your score, especially if you put $3500 on it. Either ask for a higher limit or get another card so your amount of total credit lines increases.
You want to stay under 20% of total utilization to keep a high score, that means no more than $800 on your current card if you don't increase the limit.
Thanks
While I generally agree with the other posters - I think you should strongly consider (each) having another credit card. You might as well get one with 2% back (Citi DoubleCash is one) or a rotating category card that gives 5% on a category of purchases each calendar quarter, 1% on everything else. Chase Freedom is an example.
And it's not just about credit score - I wouldn't be 100% dependent on a single card with no backups. What if the CU cancels it for some reason? Or it gets lost/stolen while you are traveling and takes a week to replace? Potential hassle factor is high.
Short term - sure, small temporary ding against your credit. By 6-12 months, that drops off and by 2 years it will definitely be a net benefit.
Just to reiterate - you need more available credit on your existing card as well. At worst, stay under 30% utilization. Even better to stay under 10%. Yes, that means for having a $3,500 balance when it closes, you want >$36,000 in available credit.
Seems crazy, but that's how credit scoring works.
Thanks
This is an aside: regarding it getting canceled/lost, debit cards/checks/cash, I'm not seeing the hassle? Ran around europe for 2 weeks with no credit card.
So how/when is utilization actually measured? Is it when the credit card company checks the balance and issues a bill, or do the credit reporting companies check randomly throughout the month?
I've always been in the 10% utilization range, just by paying it off regularly, but mostly by luck, because I don't know when things actually "close"
Also, what's a "normal" mustachian credit card limit?
(I apparently understand quantum mechanics better than I understand credit cards.)