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Is a new CC right for me?
My FAKO score (through Credit Karma) is 758. I have $4200 in CC debt that I am paying $1300 per month to bring card to 0$ balance. My credit limit is $11,500 and this is my only major CC. I have a Home Depot Card (with a CL of $1100) and a Military Star Card (with a CL of $2500) along with a Travel Card in my name (with a CL of $7,500). USAA has pre-approved me for an American Express with a high CL. I know I will have an initial ding in my credit score for the inquiry, but will having this extra CL been a long term advantage to my score? I am very hesitant. This new CC would allow me to save in the short term as I can transfer the $4200 from my other card to the new for 0%. I would probably save $150 or less in interest over the 3-4 months that I need to pay this down. Please advise.
Asked by
gallaghehrdad
7 months ago
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Yes you shoudl take it. The ding fromt eh credit hit will pass in a few months, the extra credi availabel wil be good long term, and it will save you money on the existing debt.
ladald 7 months ago
I spoke with a financial advisor over the phone and he steered me away from this deal. For one, the CC was an American Express and is not universally accepted in the states. It is better if I travel to Europe on occasion. I do not. Secondly, lenders for mortgages look at your available credit to income ratio. If I raised my total CL by $10,000 I would improve my credit utilization but will raise my credit to income ratio. Even if I don'y use the entire CL, they look at the potential that I could. And lastly, my main CC has a high enough limit that I am no need fo more. So, in the short term I'd save, in the mediium term I'd gain, but in the long run it would drag me down.
gallaghehrdad 7 months ago
You could always close the card after you are done paying it off. Then logn term you would be fine too. I mean yes MasterCard and Visa have a deeper market penetration in the US -- they are everywhere, while American Express and Discover less so. However, plenty of places do take american express and i use it predominantly. I do have one of each cards for just in case, but 90% of everything i pay is done through the AmExpress. So that particular reasoning is BS.
ladald 7 months ago