Question : Should I strive for a high credit limit? How many credit cards should I have?
I just figure the more credit the better. Does a higher credit limit increase your credit score? I don't plan on ever using all of it, but I want it to be available to me. And if my credit limit is higher, doesn't it make the amount I owe seem smaller, so my credit score will increase right?
- asked by Calista
All Answers:
Answer #1
Only as many as you need, preferrably one, Toomany and you leave yourself open to credit fraudor you get a little crazy and ruin your credit. We got one that gives us cash back for gaspurchases, which makes buying gas less painful.
- answered by doktordbel
Answer #2
No no. the more credit cards you have the loweryour score will be. I am 99% sure that everytimesome company checks your credit report you losepoints. And every time you open a credit card,they look at your report.The smart way is to getone credit card that gives you cashback (shoparound) some give you more cashback on gas andgrocceries. NO Annual fees and very low APR. Aslong as you pay atleast a minimum payment on time,your credit will get better.
- answered by Free spirit
Answer #3
One Credit card....use only in case of anemergency!! pay cash as often as you can.... theinterest rates on Credit Cards is a waste of hardearned money!!!
- answered by queenmackerel
Answer #4
The more credit you have available, the easier itis to get in trouble. That doesn't mean that yourcredit SCORE is higher - in fact, having a lot ofcredit cards might DECREASE your score, is notlikely to increase it.
- answered by Judy
Answer #5
It's the opposite. The more open accounts you havethe less likely it is you'll get credit. Mortgagecompanies and car loans look at this sort ofthing. That effects your interest rate.The bestthing is to have no credit cards. Cash is king.The reality is the average American has 35,000dollars in credit card debt. Why? Because theyhave too many cards with high limits.If you'regoing to have them then have one. This is the ageof identity theft and credit fraud. Protectyourself, your credit rating, and your finances byhaving one card with a low limit. A higher creditlimit may make appear that what you owe issmaller, but it isn't.Instead of owing money tocredit card companies, just imagine how much moneyyou'd have if you invested what you would pay tothe credit card into a good mutual fund or moneymarket account. That's the way to financialsucceess. Not credit card debt.
- answered by JB
Answer #6
Credit score is made up of the following items;1.Payment history 35%2. Time in bureau 15%3. New credit 10%4. Type of credit used 10%5. Debt toincome ratio 30%As you can see items 1,2&5are the most important as far as score isconcerned. But you need to have a good score and agood profile. To achive this you will need atleast 3 revolving accounts (credit cards) and 2installment accounts (auto, home, personal orboats) all with good long pay historys and lowbalances on your credit cards.This mix of creditwill give you the best score/profile.Your creditlimit has nothing to do with your score, it's howmuch of it you have used that is important. Keepyour credit card balances below 30% of your limitat all times. Pay them in full whenever you can.
- answered by spifiman1
Answer #7
No. The more cards you have does not make itbetter. You do want high limits on the card/cardsyou have. But keep your debt on the cards under30%. You want at least 2 good trade lines so Iwould suggest 2 credit cards unless you haveanother line of credit already like a financed caror something. Also you can request your cell phonecompany report to the credit bureau, that would besomething you could have on your credit instead ofanother credit card you don't need.
- answered by s_berry
Answer #8
I personally only keep 2 cards, a gas card and onefor everything else. Having too many credit cardsdoes lower your credit score as you run the riskof overspending, having high balances, or unusedaccounts that you leave lying around isn't good,as well as more liability should there befraudulent activities.
- answered by Alisa
Answer #9
High credit limits, are not necessarily a good wayto increase your credits score. More creditaccounts can improve your score as long as youmaintain a good income to credit ratio. Reducingyour balances while maintaining active credit usemakes you more appealing to prospective lendersand can help improve your credit score. No matterhow much available credit you have, it can't beatcash in the bank. Setting aside a fixed amounteach month will guarantee interest-free funds inthe case of emergency while helping you developfinancial discipline.
- answered by sfchtm
Answer #10
Let's clear up a few things. True...mass pullscan affect your credit scores by a few points. Any pull on your credit will go away in 90 days. Also, the guy that said credit is made up of acertain percentages is on the right track but isoff. The credit bureau doesn't look at your debtto income ratio. The bureau's don't know yourincome so that is a complete falsehood. Revolvingdebt to limit ratio will affect your scorehowever. Maybe that is what he meant. To the"Cash is King" guy. Good luck ever buyinganything you don't have cash for. To buy a houseyou need credit unless you go FHA. FHA will usealternative trades like utility bills and rent. Ihave so many clients that walk into my officetrying to obtain financing for a home and getdenied because they have one or two collections onutilities and have a bad score and refuse to openan account to help boost their scores. I guesscash only people don't deserve a house. Having acredit card is a great way to boost scores. Justtreat them good...no lates and keep the balanceunder 50%....33% is optimal. A lot of lenderslook for at least 3 tradelines. I would open 1 or2 credit cards or 1 or 2 installment loans. Have3 total.
- answered by curse08
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