Our Credit Card Is Just Waiting For You

Category: Finance, Credit.

Sometimes it seems you can t open the postbox without having a slew of credit card offers and applications slide out into your hand.

Our credit card is just waiting for you! You are already pre- approved. All you have to do is call to activate your new credit card. It s a dizzying array, and it s difficult to say no when the credit card companies want to give you access to all that money. If you ve recently applied for a new credit card, have just finished school, have signed up at a bridal registry or just tied the knot, you ve probably got even more credit card offers than usual- life- change events are triggers to credit card companies to flood your post box with offers for low- interest credit cards, credit cards with no interest intro rates, a pretty pink card for shopping and credit cards that give you cash back when you shop. So you sign up for a pretty blue card because you like it, and a Gold card because it has some status to it, and a store credit card because you got a 10% discount on that scarf and before you know it, you ve got a whole wallet full of credit cards.

Here s some information on how creditors look at your credit score, and how the number of credit cards that you have can affect your credit rating. How many credit cards is too many? It may make you think twice when you go to apply for a credit card. The Available credit rule is that your available credit should be no more than 50% of your annual income. Available credit is the total of all the credit that you have available to you. If you make �28, 000 per year and you have a Visa card with a �5, 000 limit and a MasterCard with a �1, a gasoline credit, 400 limit card with a �500 limit and a Virgin Shopaholic card with a �1, you, 500 limit re in pretty good shape. Not including your mortgage, your total debt should be less than one half of your annual income.

Total debt is the amount that you owe if you add up all your credit cards, personal loans, auto loans, school loans and mortgages. The Debt/ Income Ratio measures how much of your monthly income you need to meet your monthly budget. Why would you want another credit card? If your mortgage or rent plus the minimum payments on your credit cards is more than 38% of your monthly income, another credit card is not a good idea. The answer is a simple one- you may want another credit card that offers you something you can t get with any of your other cards. A positive history of holding and using different credit cards for different things is a mark in the plus column. Lenders do look at credit card diversity- the different types of cards that you hold and use.

If you decide that you should have another credit card, apply wisely. There are some really good comparison sites out there which makes it easy for you to check the details of multiple credit card offers, compare credit cards against each other and find the best credit card for your use. Take the time to compare credit cards against each other online.