Most of us overflow with credit card offers every day. They come to your mailbox, the landing page of your bank’s website, your email, and transactions on sites such as Amazon and eBay. And with easy-to-use apps that promise 30 seconds of approval, it’s tempting to press and sign up. However, savvy consumers need to know when to apply for this new card and when.
First, Check Terms
Is there an annual fee? Do they offer better prizes than your other cards? How’s the interest rate? If the card is not a better deal than anything you currently have, discard the prompt. Also, as a rule, you should never receive a card with an annual fee unless there are prizes that exceed the fee or this is the only card you can qualify for. Applications for new cards must be those that reduce your expenses with fees and interest or benefit you in some way.
Are You Working to Create Credits?
Having unused credits increases your credit score over time. Its use constitutes approximately 30% of the credit rating. As a rule, you must have sufficient credit to keep your use of less than 30% (some experts say 10%) when using your card for routine purchases. When creating credit, it’s a good idea to ask an existing cardholder to raise your limit regularly or apply for an additional card. Do not apply frequently and do not bring your balance too close to your current limits.
Can Any of Your Existing Cards Deal?
If you see a new card with a balance transfer offering that looks seductive, try searching for the card with your balance. They may be willing to lower your interest rate or raise your limit to keep you active.
Can you meet the inquiry?
Recent questions make up 10% of your credit rating. Keep your credit report away from credit card inquiries if you plan to make a large purchase, such as a home nearby. Even a small drop in your credit rating can lead you to an agreement with a higher interest rate, which can cost thousands of people over the lifetime of the loan. If you are at the border at first, it may be impossible to qualify for a mortgage. Your questions will remain in your credit report for 2 years, while the FICO will take into account the last 12 months when evaluating your score. Finally, you should consider how each credit device will benefit you in the long run. If it doesn’t raise your score or provides a measurable benefit beyond reaching some more money, you’ll be better off passing.