“When it comes to credit cards, how do I know how many or what type I should have?”

Right now, I use two cards; I have five cards in my name. I might add another to the list.

People use several strategies to determine which credit cards they want. Some people will sign up for one, complete the introductory offer then drop it when they collect the payout. Some will have certain cards they only use for specific categories. I am a bit of both.

I find value in the categories, but introductory offers are too short-term-oriented. Plenty of psychology literature in academia suggests the number of days needed to build a habit. These introductory offers are doing just that. They are building a practice within you to spend a certain amount in a particular category or with their card. That is why the only thing that matters when selecting your credit card is your current spending habits. I should name this site currentspendinghabits.com, not quidbuck.com.

I mentioned I only use two cards, but that is just because it took me many more to get where I am. I graduated college without a credit card and was finally earning money. I was living at home with little debt except for student loans. I bought my car outright and didn't pay rent.

I applied for the Citi Double Cash Back Card. It was 2% cash back over every category with no annual fee, but you had to wait 30 days to get the complete 2%. They awarded you 1% cash back as you purchased, then another 1% as you paid off your bill. This rewards program was not as enticing as a flat-out 2% because of the weird hoops, but it was what I was aiming for because it was still without boundaries.

They denied my application.

I realized I needed a stepping stone to build up to the credit score they needed. I lowered my sights to the Capital One Quicksilver Credit Card. These rewards were excellent because they offered 1.5% cash back and no annual fee, but they were not quite the 2% cash since I was after. Again, I was living at home, so the 0.5% cash back difference in my spending budget was not much to consider.

I was awarded the card for a $1,000 spending limit or something deficient like that.

I was lost because I finally received my first credit card here. How could I stay under the ultra-safe 10% monthly utilization rate?

If you have no idea what I'm talking about, that's all right. I have a post explaining it: What makes up a FICO score?

I stayed below my 10% utilization target for the first few months by utilizing my debit card for some purchases. I wanted to make sure I was putting my best foot forward as a new borrower. I eventually was able to apply to the American Express Blue Cash Back Card (which I then upgraded to this card). The AmEx Blue Cash Back Card had 3% on U.S. supermarkets and 2% on gas with no annual fee. The 3% was 2x of my current 1.5% rewards rate with the quicksilver card, enabling me to gain an extra inch in that category. Gas was only 0.5% more but still an improvement.

I was approved! I was on the way up!

The next step was to get my Citi Double Cash Back Card. I applied later that day and was approved, but I didn't think about how low my limit would be because of my new lines of credit. Time went on; I stayed below my 10% limit, requested a credit line increase, and Capitol One granted the request.

We're at 3/5 credit cards. What's next?

Next, I looked at the Apple card. I was looking for a card that rewarded me for my Apple purchases. Unfortunately, I do not recommend this card. It was a bit of an impulse and not worth the inquiry. Still, it diversifies my lines of credit, lowers my average credit age (down the line), and reduces my total utilization percentage. It gave me 3% cash back on my Apple purchases, and since I was in the market to drop $2k between a phone and laptop, the timing made sense.

After getting my fourth card, I was good to go. My everyday credit card is the Fidelity Rewards Visa Signature Credit Card. This card is far and away my favorite for one simple reason.

Investing.

This card rewards you with 2% cash back, no annual fee, and a high credit limit (mine is $21,500). It also enables you to invest your money back into products offered by Fidelity directly and beyond. These perks maximize your long-term net worth by compounding your money back. I'm skeptical about investing in one stock, so I like to use the cashback to invest in ETFs and different parts of the market my thesis supports. It's a lower barrier to entry than using your IRA or something of the like.

My last card change was my American Express Blue Cash Back Card. I upgraded this to the American Express Blue Cash Preferred Card after figuring out I could get more cashback than the cost of the card, as shown here. That was the last change to the credit cards that I hold.

Next Card?

If I get another card, it would be the SoFi credit card, but only if I have my direct deposit set up with them. The SoFi credit card, when direct deposit runs into a SoFi checking account, rewards at 3% cash back for everything. The SoFi card could replace my Fidelity Rewards Visa Signature Credit Card. I can still invest my SoFi rewards in the market through SoFi's brokerage services.

I haven't looked into it yet, but I'll provide a referral link. For now, here's the link to SoFi's credit card page.