Sanity Check: CMA and Credit Card Plans

[slippinsurlies]

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.

[Dregob]

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.

Honest question. Do you care what your credit score is? I don't. Not relevant information for me.
Saying that.....I use Fidelity CC/accounts as exactly how you described.

[f8andbethere]

This plan doesn't pass my sanity check.

Length of credit history is just one of many factors. Utilization thresholds of any given card along with that of your total available credit are likely to matter more (and of course, a history of making your payments).

Keeping an existing card with a high credit limit, low/no fee and reward/benefits you like open is a good idea. Age of account wouldn't be a primary factor for me.

I can't imagine opening cards now with plans to begin using them years later. Wait until you have a place for a new card and shop around for a lucrative signup bonus. Even then, thinking about having more than three cards open makes my brain hurt.

You already have very good credit and are likely qualified for the most favorable rates from lenders. I was in a similar position a few years ago and mine only went above 800 after I got a mortgage.

[feh]

Keeping an existing card with a high credit limit, low/no fee and reward/benefits you like open is a good idea. Age of account wouldn't be a primary factor for me.

+1 I don't see any point in closing CC accounts.

Other than that, we also use Fido Visa and CMA.

[physics911]

Keeping an existing card with a high credit limit, low/no fee and reward/benefits you like open is a good idea. Age of account wouldn't be a primary factor for me.

+1 I don't see any point in closing CC accounts.

Other than that, we also use Fido Visa and CMA.

Except for more accounts out there for the potential fraud monster.
We shouldn't live in fear of fraud all the time; just calling this out as one reason you would want to close the accounts. I, personally, close accounts when I am done with them because my credit score is very high, history long, and limits high enough that closing an account here or there has virtually no impact.

[f8andbethere]

To be clear, I meant that it could be advisable to keep a single "legacy" card open while chasing signup bonuses or other benefits. Something with a high credit limit that doesn't cost you a fee to keep in a drawer (2% baseline rewards would be a bonus). Fidelity's card might fit the bill.

Thinking about leaving all my unused cards open gives me a headache, but that's just me. I don't think pruning accounts has harmed my credit.

[feh]

Keeping an existing card with a high credit limit, low/no fee and reward/benefits you like open is a good idea. Age of account wouldn't be a primary factor for me.

+1 I don't see any point in closing CC accounts.

Other than that, we also use Fido Visa and CMA.

Except for more accounts out there for the potential fraud monster.
We shouldn't live in fear of fraud all the time; just calling this out as one reason you would want to close the accounts. I, personally, close accounts when I am done with them because my credit score is very high, history long, and limits high enough that closing an account here or there has virtually no impact.

I simply disable any card I don't use on a regular basis, which is all except one.

[_nvrltthmknwyrnxtmv]

A thing to consider is how easy is it to redeem rewards for cash? Do you have to wait for a minimum amount, Has to be in $25 increments as example?

How easy is it to redeem the rewards for Fidelity?

I had been using Alliant Credit Union 2% on everything, But Amex Blue Cash Everyday changed their rewards and now has 3% on gas and supermarkets...