Contributor Blog: Strategic Credit Planning 101


I have one credit card with $1,000 limit and I have zero balance. Should I be charging stuff to improve my FICO score? I really dont need it as I like to pay cash for everything --Frank

Hi Frank, what a great position you’re in. And, as such, I’d like for you to prepare for a rainy day by doing a little strategic credit planning. You have almost no buying power right now and there will come a time when you need more than $1,000 available credit. Think about the cost to buy a plane ticket, replace your tires, buy some nice clothes for a new job, or even a combination of these things. You simply can’t do them all right now, and certainly not without hurting your credit scores because you’ll be too close to your limit when you’re done. And what if your credit card lender decides to close your only account?? You need options my friend!!

I’d like for you to open another credit card, preferably a Visa or MasterCard so you can use it anywhere. And in 6 months I’d like you to open another. Shop for rewards cards that report to all three credit bureaus; you can do that at Now this isn’t permission to get into debt. This is you building a portfolio of credit vehicles for the sole purpose of the following…

Access to capital – We’ll all need it eventually. I just spent $2,900 on my wife’s car!!

Ability to charge more expensive items without damaging your credit scores – If you charged the cost of a new washer and dryer on your card (~$500) then you’d be 50% maxed out…not good for your scores my friend. The more available credit you have the better. You can accomplish that with more cards, unused.

Options – If one of your credit card lenders starts treating you poorly, then move on. You can’t do that right now.

Use each of your cards at least once per quarter so the lender doesn’t close the account because of inactivity. Pay them in full each month. Never revolve a balance. And finally, send me an email in 24 months when your scores are in the high 700s.

[John Ulzheimer is a nationally recognized credit expert and contributor to On the Money. Learn more at or]