Help with credit cards

k_jo
Thu, 16 Aug 2007 21:57:31 +0000

Ok - here’s a long explanation.

Applying for multiple cards will hurt your credit score. But having a card open and active for a number of years and building a good credit history with that card helps your score. So right now since you don’t have a credit history, opening two cards and keeping them open for years along with spending on both cards will help your score if you pay off the balance every month. Closing old cards with good history actually can hurt your score, something people forget when they realize that they might have a department school card that has been open for 10 years and decide to close it, for example.

The deal with carrying a low balance or not using the full amount of your credit limit. Some experts say you want to stay about about 30% of your credit limit and that credit bureaus do care if you go higher than this, even if you pay it off every month. “They’re interested in how much of your available credit you use. If its excessive, your credit score will drop.” [http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/Your5MinuteGuideToCreditCards.aspx][/url]
So by increasing credit limits once you card will let you and not increasing your spending, you are using less of your available credit making you look like a more attractive credit candidate. Would you want to lend to someone that uses 80% of their credit, or only 20%? The person that uses less of their available credit looks like a better person to lend too.

Here’s an article about different kinds of reward cards for you – a lot of them won’t really apply to you since you are looking for some sort of card more geared to students, but still helpful to read over: http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/HowToScoreWithRewardsCards.aspx