Tuesday, August 19, 2008

Patience is a Virtue but Paying in Full is Divine

(Editor's note: this interview was the third of six installments that ran during the week of August 18-22, 2008. To get the most from it, be sure to read my introduction article, which can be found here.)


CM: Bob, tell my readers a little bit about yourself.

My name is Bob Wang. I’m a little over 50 years of age, and have been in my profession since the early 1980s. I currently live in the Southwest and outdoor activities are my major hobbies. Skiing is my passion.


CM: Bob, what are your FICO scores?

My official FICO scores are 757 with Equifax, 761 with Experian, and 776 at TransUnion.


CM: When did you get your first credit card?

I got my first major credit card in 1982, an American Express Gold Card. I had quite a few store credit cards before then, but American Express was my first “real” credit card. That same year I also got my first Visa card from AAA.


CM: How many credit cards do you have?

I have over 50 credit cards. Around 40 are personal cards, and a little over a dozen are business cards. I also have 2 charge cards: an American Express Platinum Card and an American Express Plum Business Card.


CM: How did you learn about credit? Who taught you about credit?

I think I was influenced by all the American Express commercials when I was in school. I always wanted to have an American Express card, and that was the first one I went after when I graduated. Back in my day, there were no student cards.

I collected a few more cards through the '80s and '90s, but really started hauling them in beginning in 2004. That was about the time that my mailbox started getting flooded with solicitations. I discovered the CreditBoards.com forum in late 2005, and that is actually where I learned the most about credit. The Credit Matters blog would have really helped, if it existed.


CM: What advice would you give to someone just starting out in credit?

Be patient is my best advice. Also, to peruse the Credit Matters blog for guidance and ideas. I regularly fall into the trap of being impatient, and apply for more credit cards than I should. That is why my FICO scores tank predictably on a semi-annual basis.


CM: If you knew then what you know now, what would you have done differently in your credit life -- if anything?

I think I would have been more judicious in my choice of credit cards. I have many cards that I don’t envision ever using again, but am loathe to close. I will have to cull at some point, since issuers are starting to cull me.


CM: What habits have allowed you to maintain such high scores? What do you think the most important thing you do is?

Always paying in full, and on time, probably makes me appear most creditworthy. Practicing restraint has also allowed my FICO score to recover between application sprees. Picking out specific cards to target will be my objective in the future.


CM: If you have a lot of credit cards, tell us why you feel the need for all of them. If you have relatively few cards, why haven't you decided to get more?

Many of my cards fulfill a specific purpose. Most of the time that is due to the cards’ rewards structure. I only use credit cards that pay me some kind of reward for charging purchases on them. I will probably whittle the number of rewards cards down to a few dozen at some point.


CM: What is your favorite credit card? Why?

My favorite card is the American Express Platinum Card. It is also one of my oldest; I’ve had it since 1984. The rewards structure is only one Membership Rewards point per dollar spent, but I like not having to worry about a large purchase putting me over my credit limit.


CM: Have you ever been late on a credit card payment? If not, how do you stay on top of your bills?

I’ve never been late on a payment. When I receive a new card, I set up a "scheduled transaction" in Quicken to remind me when the statement closes. I also set up automatic payments for all my credit cards that offer the feature.


CM: Why do you think people run into trouble with credit cards?

I think many people mistake their credit limit for money in the bank. I wish more people treated their credit cards like debit cards, and paid in full every billing cycle. 0% interest offers are an obvious exception.


CM: When did you first become aware of FICO scoring? Did you ever think that you wanted to reach a certain goal with your scores? In other words, did you always want to have an 800+ score?

I first became aware of credit scores when I obtained a Providian credit card in 2004 that supplied a credit score every month. I was not aware of the distinction between that score and “real” FICO scores until I joined CreditBoards in 2005. Once I became aware of FICO scores, I wanted to be above 800. However, a more important goal for me was to achieve 7 figures ($1,000,000) of revolving credit, and I had to sacrifice high scores to reach that level.


CM: What does having a high score represent to you? What does it do for you? Would you be just as happy if your score was 720? How about 680?

Having a high score is just affirmation that I am a good credit risk. A high score allows me to indulge myself in collecting high-limit credit cards. I no longer need mortgages or car loans, so accumulating credit is just a fun hobby. I would not be happy with low scores since each $100,000 of additional credit would require more effort on my part.


CM: Any parting words for my readers? Some words of wisdom that you care to share?

Read the Credit Matters blog if credit is important to you.


CM: Thanks, Bob, for your comments. And thanks for touting my Credit Matters blog at least three times during this interview. Credit Matters Blog


13 comments:

  1. Hey Bob - Good to learn more about you.

    Good piece, Marcus.

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  2. Very informative interview!

    Bob, thanks for sharing your story. I'm daily reminding myself to be patient in "correcting" my credit reports and not applying for unnecessary cards. I know that in time I will get into the higher 700's. I read this blog daily as a guidline because I want to stay "in the know".

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  3. Bob has a lot of information to share. I may try to catch up with him some time and pick his brain a little more -- maybe go a little more in depth than what's in this interview.

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  4. Bob,

    using the $1M mark, if you had a do-over, would your strategy be:
    10 TL @ $100k or 20 TL @ $50k.
    What % of those TL would be credit unions vs the Big 4 (Chase, Citi, BofA, Amex)?

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  5. I'll send Bob a note and see if he'll come by and answer your question, Awedio.

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  6. awedio:
    You'll have to take it on faith that it is I, BobWang, answering ;-)

    Actually, that is a VERY good question.
    My goal is to get my major cards up to 100k and cull lesser cards.
    I only have 2 credit unions, two 50k VISA accounts I just opened last month.
    Alliant CU claims to give up to 100k for their VISA, and I'm going to test that assertion by the end of the year.
    I have 100k cards from Chase, and BofA, I am thinking of combining Citi cards to reach 100k.
    Amex is not quite there, but my white whale is a 100k Discover :-)
    Bob

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  7. Bob, I know you'll get Citi and Amex to $100,000. I see no problem with that.BUT, I just don't see the Discover card making it to $100,000 -- even for a pimp like you.

    Now, if you plan on applying for a host of Discover cards over the next several years, maybe you can combine your way to $100,000. But I just don't know.

    I've never heard of a $100,000+ Discover card. Would love to see it happen.

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  8. Good interview Marcus and thx for the story Bob.

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  9. Melikey, nice seeing you over here. Feel free to comment on a regular basis.

    Thanks for reading.

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  10. Really great article, few questions for Bob:

    1. Did you patiently wait out automatic increases or do you have a plan of asking for substantial increases every 4-5 months?

    2. Do you notice any different kind of "requirements" or "questions" once you started seeing some pretty substantiation credit lines? For exmaple, were some banks asking for bank statements or proof of salary to prove you are worthy of a $75,000 credit limit?

    3. Have you ever been denied credit(in any way) for too many trade lines or too much available credit?

    4. You mentioned you sacrificed even higher scores for the ability to get such high credit limits. Would you mind enlightening me as to why that is?

    Your my credit role model!

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  11. Josh, I'll see if I can get Bob to return.

    Thanks for reading.

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  12. Josh:

    1. Patience is NOT my middle name. I actively request credit line increases, OR apply for new cards with every intention of consolidating cards for bigger limits.

    2. Above $25,000 is when some issuers started asking for 1040s. My local CU usually doesn’t go over 25k, and I had to provide a “Statement of Financial Worth” to get 50k.

    3. Not yet, but I’m sure if I pushed the envelope in the current climate I’d be shot down in flames.

    4. If I didn’t apply for so many cards, and just had a dozen 27 year old Amexes, my FICOs would be pushing 850. As somebody wise once said, do I want a shiny 850 sitting in the FICO garage, or do I want to tackle Pikes Peak, getting dirty and having fun?

    Bob

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  13. great to find out a little background on the (in)famous BobWang, the fearless guy on CB not worried about using his name lol.

    That is nuts with 50 cards!I wouldnt be able to keep up ith that many, spreadsheet or not. I have this need to check each of my cards every 15 days or so, in case some weird charge pops up, or an annual fee or something.

    look forward to your post's on CB!

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