Opening a new credit card will give you more available credit to use, and will also help balance out your credit utilization rate. It will also increase your credit score when used correctly and cautiously. However, it’s important to know the impact of opening a new credit card can have on your credit score. One reason you might consider opening a new credit card is to help with your spending budget, but adding more available credit may give you an urge to spend more as well.
When opening new accounts it’s important to view the pros and cons, will it benefit you or will it hurt you instead? If you are just starting to build credit opening a new credit cards is a good idea to build good credit history. You may want to start off with a secured card if you have never applied for a credit card. Make sure you are keeping the credit utilization under 10%, avoid late payments or missing payments, and I recommend keeping credit card accounts open for a year or longer. You can also take advantage of rewards, traveling miles, discounts, cash back, 0% interest from such credit cards.
The negatives to credit cards can be very hurtful, such as the possibility of adding new and more debt. If you can not control your spending habits, it may not be a good idea to be opening new credit card accounts. This can lead to higher interest rates, and higher monthly payments and ultimately adding more debt. Before you even start using your credit card it will already have affected your credit score with hard credit checks. Hard credit checks can lower your score anywhere from 2-5 points per inquiry, so they can start to add up on your credit report if you are doing a lot of hard credit checks.
Credit cards can be a huge help to your credit score or can really hurt your score. Whether good or bad its a big decision, so take time to think about it before even applying. Ask yourself how will this benefit my credit score? Do I need this credit card right now? Can I afford the monthly payments or the interest rates if you have any? Ultimately its your decision so make sure you weigh the pros and cons of opening new credit card accounts.
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!