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Do I need another credit card?

RonB

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While searching for the best deal for an a/v receiver, Icarus pointed me to Amazon who had the best total cost, (thanx David). In addition, if I apply for their cc, I'll get an additional $30 off. How will an unused cc affect my credit rating as I don't plan on using it except for the one purchase?
Thanx,
Ron
 

philemer

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RonB said:
While searching for the best deal for an a/v receiver, Icarus pointed me to Amazon who had the best total cost, (thanx David). In addition, if I apply for their cc, I'll get an additional $30 off. How will an unused cc affect my credit rating as I don't plan on using it except for the one purchase?
Thanx,
Ron

The folks I've talked to that get one or two diff. c.c. per year say their credit is not affected as long as they keep the amount charged at a low level & pay it off every month or make regular payments. The credit bureaus like to see 'available credit'. Don't ever max.them out.
 

The Conch Man

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RonB said:
How will an unused cc affect my credit rating as I don't plan on using it except for the one purchase?
Thanx,
Ron

It doesn't matter if you use the credit card for one purchase only ~~ or pay it off the month its due ~~ The more cards you add to your credit level the lower your ratin ~~ This doesn't mean it goes down a lot ~~ I think it means how much you can afford or something like that ~~ The more "revolvin" credit accounts you have ~~ the lower your score ~~ "JMHO" ~~
 

gmarine

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RonB said:
While searching for the best deal for an a/v receiver, Icarus pointed me to Amazon who had the best total cost, (thanx David). In addition, if I apply for their cc, I'll get an additional $30 off. How will an unused cc affect my credit rating as I don't plan on using it except for the one purchase?
Thanx,
Ron

The amount of cards you have will have little affect on your credit score as long as the balances are low.The part of the credit score pertaining to that amounts to only 10% of your total score.
If you are worried about it you can lessen the affect by having a low credit limit on the card and paying the bill on time each month. Either way it isnt something to be concerned about.
 

teachingmyown

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By no means an expert here, but I'd think it would also be worthwhile to consider what you intend to do with your credit rating in the next 24 months or so. If you aren't considering a major purchase such as a home or vehicle that requires significant credit risk on someone else's part, then why would it really matter if your rating was a little bit different one way or the other?
 
J

JoeMid

teachingmyown said:
By no means an expert here, then why would it really matter if your rating was a little bit different one way or the other?
even small variations in good credit can affect the rate you are offered, say, for a new car loan.
 

Gadabout

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JoeMid said:
even small variations in good credit can affect the rate you are offered, say, for a new car loan.

Borrow from family for a car loan, if you must borrow. Only go in debt to a bank for a house. (just my opinion, of course :) )

2 cards (one you use all the time and a back-up card, in case your magnetic strip goes and you are at a non-attended gas station) is a good idea. Also, we have had to use our back-up card when our primary card had a hold put on it unexpectedly by the CC company--as in, usually they call and have you verify charges, but in this case, they DIDN'T, just put a hold on the card.

Any more than 2 (unless you need a separate card for business) is probably unnecessary for most people.
 

swasuth

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OMG, I am in trouble. I get a card at every store that has a promo going. I use it for any promos & pay it when the bill comes in. We have a MC that we put EVERYTHING on but also pay when the bill comes in. Now it seems that when you get a card from a store, it is a Visa or MC so I now have my original two MC's (one as a backup) and now three store Visas plus individual stores (5). I NEVER have a balance but maybe I should consider cancelling a few. Ya think????
 
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gmarine

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swasuth said:
OMG, I am in trouble. I get a card at every store that has a promo going. I use it for any promos & pay it when the bill comes in. We have a MC that we put EVERYTHING on but also pay when the bill comes in. Now it seems that when you get a card from a store, it is a Visa or MC so I now have my original two MC's (one as a backup) and now three store Visas plus individual stores (5). I NEVER have a balance but maybe I should consider cancelling a few. Ya think????


I also have multiple cards from promos. Like I said in a previous post it wont affect your credit score very much as long as you dont have large balances and apy on time. The amount of open credit accounts for only 10% or your total credit score.
If you are going to apply for a home or car loan in the near future and have marginal credit then you might want to cancel some of them. If your credit is otherwise very good then dont worry about it.
 

philemer

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Gadabout

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philemer said:
I get a new VISA card every 6 months because of the UA bonus miles & my FICO score is still well above 700. I've been doing this for about 5 yrs. Here's a good article from the pros: http://www.myfico.com/CreditEducation/ImproveYourScore.aspx?fire=5

And http://www.fool.com/ccc/check/check01.htm

Phil

And the "pros" are contradicting themselves here, with:

"Don't close unused credit cards as a short-term strategy to raise your score.

Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower score."


Well gee, which is it? :confused:
 

MusicMan

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Gadabout said:
And the "pros" are contradicting themselves here, with:

"Don't close unused credit cards as a short-term strategy to raise your score.

Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower score."


Well gee, which is it? :confused:


I'm not sure it's a contradiction. One is referencing existing accounts and the other referring to opening new accounts. It's only a contradiction if the total number of accounts is the only relevant factor. It's quite possible (and I will freely admit that I don't have a clue whether this is the case or not) that established accounts are treated differently than new accounts.
 

beachsands

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RonB said:
Thanx all...
Sheila, I understand that canceling a card is bad for your score - don't really know if that's true...
Anyone interested: http://www.amazon.com/gp/product/handle-buy-box/104-5423523-0121502 . At the top of the page is a link for how to save an additional $30
Ron


You do need to be careful in closing out credit cards, because it indeed does negatively effects your credit score. What happens is that your debt to equity ratio changes. You now have more debt in relation to the available equity. You would think that they would give you more points for doing this but thats not the way it works. I have talked to the Fair Isaacs people on this matter. Call them yourself. I have listened to Suze Ormond say this as well.
Do your homework on your credit info. The FICO scores can be unfair in many ways and its up to you to keep track of it on an on going basis. Like we need more things to keep track of.

Joel :eek:
 

Gadabout

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MusicMan (Formerly JP) said:
I'm not sure it's a contradiction. One is referencing existing accounts and the other referring to opening new accounts. It's only a contradiction if the total number of accounts is the only relevant factor. It's quite possible (and I will freely admit that I don't have a clue whether this is the case or not) that established accounts are treated differently than new accounts.

Well, I mentioned the contradiction (and I still think it is one) in light of the OP asking about closing a card he doesn't plan to use after this one purchase. Total number of accounts carry a total amount of credit with them. If you plan to have $10,000 available as credit, is it better to have it on 1 card only, or split between 2,3, or 10 cards (and this assumes that you're paying them off every month)?

I do think the credit ratings system is unfair on the face of it, because it penalizes those who choose to live within their means in favor of people who make money for the credit companies by carrying balances and paying late fees, as well giving credit again and again to people after they've proven themselves bad risks--bankruptcy is no big deal any more, it is seen as just another financial strategy. :mad:
 
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