Should I apply for another credit card?

[LuckyTaxi]

Common sense tells me no but I was wondering if it would do me any good.

Back story is about 10 yrs ago I went through hell financially. My credit score was in the low 500s but now I'm in the mid 700s. I recently switched banks to a local credit union and they told me I'm pre-approved for a CC that has a $20k limit. He tells me it's at $20k not up to $20k. Anyways, my low credit score wasn't from me mismanaging my CC, I actually pay the full balance off every month and I still do. Just a bad business venture gone bad.

Anyways, fast forward to now. I have 3 cards, common sense tells me I don't need a fourth one but I wasn't sure if the $20k would make my credit "better." I have no worries with my credit utilization rate since it hovers around 4-5% a month.

Discover - $6k limit opened 2 yrs ago
Visa from some bank in Omaha - $6500 limit opened 4 yrs ago
Chase - $26k limit opened around Nov 2014

My thought was to cancel the Visa but it's my longest held account in terms of credit cards. I have student loans from 12 yrs ago that's almost paidoff. I rotate between the Chase and Discover due to the cashback categories they offer each quarter. The generic Visa is for monthly recurring charges (eg.Hulu, Amazon, Netflix, etc...)

 

[SlitheryDee]

I don't think it would be wise to cancel the oldest card. Age of accounts is a pretty big factor in your credit score. If it's not costing you anything to keep it open there's no reason to close it in any case. Adding 20K to your available credit would have to improve your credit score somewhat once the effect of the initial credit check goes away. I'm not encouraging you to get another card you don't need though. I only have 2 myself and I'm not interested in any more, even if it improves my credit. I'm just going to go the route of making responsible decisions with what credit I have and see where that gets me.

 

[feralkid]

Nothing to lose, much to gain; what's the problem?

Personally, I'd go for cards with high bonuses like airline miles, hotel nights, etc.).

 

[Matt1970]

It can.

"Opening too many accounts at once – Acquiring several credit accounts over a long stretch of time is fine. But opening too many at once is viewed by the credit bureaus as a sign that you’re in financial trouble. In fact, 10% of your score comes from new credit inquires. Wait several months between new credit applications to keep your score in good shape."

http://www.nerdwallet.com/blog/tips/credit-score/credit-card-available-cancel-open-accounts/

 

[jagec]

What kind of signup bonus are we talking about?

 

[Strk]

What kind of signup bonus are we talking about?

^ This

I occasionally apply for cards when they give a nice signup bonus.

 

[RossMAN]

What kind of signup bonus are we talking about?

^ This

I occasionally apply for cards when they give a nice signup bonus.

Big bonus = go ahead and sign up

Does OP buy a lot of gasoline? Use frequent flier miles? Eat out at restaurants/fast food a lot?

Otherwise no thanks, just continue to use the credit cards, pay them off in full every single month.

DO NOT close any of the accounts.

 

[OverVolt]

To be honest these threads always end with the OP doing the thing they were asking. You just want us all to tell you what a great idea it is.

So hell just do it. $20k limit? Thats pretty cool. Is it like a fancy card or something? Neat-o.



Will it hurt your credit score? I unno. Maybe a little. Who cares!

I think these types of people have addictive behavior traits though. Like the cracked article I was reading about the guy who had to call the bank and put a hold on his debit card to keep himself from buying alcohol. Thats a bit excessive. So what you're trying to beat around the bush on is that you are scared that you are bad with credit? I dunno the answer to that either. Do you spend way more than you make? Keep a monthly budget? Thats all that matters. There is no reason you couldn't go for it so long as you are honest with yourself. Maybe you know you are secretly tempted to rack up a ton of debt and declare bankruptcy because you've done it before and it wasn't too bad? Duuno.

Its your call man. Why do you want to get it? Just because its cool? Nothing wrong with that. Would it tempt you to buy more than you can afford? Thats the tricky part.

 

[compuwiz1]

I like the OP, lost a business and was living in the California economy when the recession hit. I paid bills even when I shouldn't have been able to, but finally the walls fell in and so did a brief stint of unemployment. I actually had to file for bankruptcy, as I was over $500k in debt. Income at that time said no way to pay my way out or keep current on bills. I started my economic recovery with a mid 400's score.

I now have over $80,000 in available credit on everything from gas cards, discover, visas, mastercards and store credit cards. In a few years I've been able to raise my FICO score into the mid 700s. The key to keeping a great score lies in utilization and paying on time, with more than the minimum. I never run more than 15% ever. I rotate my cards to keep them active. Some cards stay in my sock drawer for a few months, then others, which are paid off, go into the sock drawer. To me having great credit is a bit of a game, which I enjoy. I apply for a couple new cards every year. It has blown me away how I went from cards with $500 limits to cards as high as $25,000 limits in just a few years.

I went a bit crazy for new credit the first year out of BK, just to fast track my credit recovery. I've got something like 18 revolving accounts. Nothing wrong with collecting great cards, so long as you are responsible in how you use them. It's a nice feeling to know you have resources, in the event of a business opportunity or an emergency. Go for it!

 

[T9D]

https://chaturbate.com/female-cams/

 

[AznAnarchy99]

Why not? Just don't use it if you don't have to. I have quite a few cards but I only really use like two. How are the rewards? I usually sign up for cards depending on their benefits.

 

[John Connor]

Asking whether or not you should get another line of credit is like asking if you should have more debt. I think three is a good number to have. Anymore than that and you have issues.

 

[HybridSquirrel]

Churn baby churn. I have like 6 or 7. Most I don't use except for a few times a year. My discover has rotating categories so I try to maximize those when I can. I use my Chase Sapphire on every day purchases, like lunch and beer. It doesn't hurt to have them open and unused (unless you're getting fined for inactivity)

 

[compuwiz1]

Asking whether or not you should get another line of credit is like asking if you should have more debt. I think three is a good number to have. Anymore than that and you have issues.

I have issues.....and great credit.

 

[mikeymikec]

Short of using a loan shark, isn't credit card debt one of the most costly forms of debt? It's usually about 20% here, give or take 5-10% depending on who is selling the service.

 

[compuwiz1]

Short of using a loan shark, isn't credit card debt one of the most costly forms of debt? It's usually about 20% here, give or take 5-10% depending on who is selling the service.

Nope, not if you pay it off inside of 25 days. Any card I carry a balance on is not over 6.25% interest. I have a card through my credit union that has a 10k limit and 6.25%.

 

[mikeymikec]

Nope, not if you pay it off inside of 25 days. Any card I carry a balance on is not over 6.25% interest. I have a card through my credit union that has a 10k limit and 6.25%.

Yes, I realise that (and I always pay off my balance before its due date), but people here are talking about "minimum payments" which (at least in the UK) incur interest on the remainder.

I've been thinking of going CC free (except with regard to my business), but it seems too much like hard work in exchange for little reward.

 

[cbrunny]

I see no reason to have more than one card. Are the rules different in the USA? What is the advantage for someone who doesn't carry any balance?

I have a LOC at my bank with a limit that is large enough to cover any major emergencies. I only pay ~prime+1% interest ($0 balance though so nothing). Between that, my VISA, and my joint LOC with my wife, we are literally telling banks we do not want more credit even though we dont use it.

 

[NikolaeVarius]

I see no reason to have more than one card. Are the rules different in the USA? What is the advantage for someone who doesn't carry any balance?

I have a LOC at my bank with a limit that is large enough to cover any major emergencies. I only pay ~prime+1% interest ($0 balance though so nothing). Between that, my VISA, and my joint LOC with my wife, we are literally telling banks we do not want more credit even though we dont use it.

Different cards have different reward schemes. It's nice to get 5% off basically everything you ever buy.

Also more credit is also a good thing. Gives you a huge cushion if needed.

 

[highland145]

Keep the highest one and that's it. Honestly you think it's not stress but it's just more junk in your brain to think about or worry about. Why keep them? Keep one and that's it.
What stress? I have 3 and 2 sit in my desk.
It shouldn't hurt your credit to close old ones. Despite what others say. Good credit stays on your account for 10 years (bad credit for 7). If you close a card it still factors into the account age for the next 10 years. However since the amount of credit and debt to credit ratio is slightly lowered that may just slightly lower your score. But nothing to worry about. You take a small hit (hard hit) for opening a new card too. However again, you are adding a ton of credit so that will raise your debt to credit limit and raise your score. So overall I'm betting you'll raise it a lot with the extra amount higher than the one you closed.
It hurts because your score is partially based on how long you've had credit. Close the oldest one and it counts less towards your score the down the line until it doesn't count at all. Keep it open, use it a couple of times a year and you get the benefit of the time open and recent activity.

But overall, like you said, I don't think it's a big deal because it is only 4 years old and the new one has a much higher limit.

My oldest is from 1988. I buy my vitamins with it to keep some activity going.

Short of using a loan shark, isn't credit card debt one of the most costly forms of debt? It's usually about 20% here, give or take 5-10% depending on who is selling the service.

What are you saying, Willis?

 

[cbrunny]

Different cards have different reward schemes. It's nice to get 5% off basically everything you ever buy.

Also more credit is also a good thing. Gives you a huge cushion if needed.

So why not just have one card that gives you the best rewards? That's what I do.

I don't see value in credit sitting there empty. I'd rather just not have it in order to discourage stupidity.

 

[NikolaeVarius]

So why not just have one card that gives you the best rewards? That's what I do.

I don't see value in credit sitting there empty. I'd rather just not have it in order to discourage stupidity.

Because there is no such thing as a card that has the best rewards.

 

[gorcorps]

So why not just have one card that gives you the best rewards? That's what I do.

I don't see value in credit sitting there empty. I'd rather just not have it in order to discourage stupidity.

Except that credit utilization is part of your score, so having more unused credit (ie: a larger denominator) might actually help in some cases. Though I've also heard if you have TOO much available credit it could hurt you too, since you can get into a bigger hole... so I don't know. There's conflicting things I've heard which makes me think nobody really knows what goes into it.

 

[cbrunny]

Because there is no such thing as a card that has the best rewards.

So instead of maximizing one reward you split among various rewards? Ok, well, not for me - I don't see the logic in that - but to each his own I suppose.

 

[NikolaeVarius]

So instead of maximizing one reward you split among various rewards? Ok, well, not for me - I don't see the logic in that - but to each his own I suppose.

What. Rewards are cash. How do you not see the logic in this?

Why would I forgo more money over two cards versus less money in one.