The Hidden Costs of Store Credit Cards

Reader Comments
Back to blog

I did shopping for car insurance recently. One company gave me pretty high quote and send a letter with the explanation why they don't give me the best price. Among other reasons - more accounts than optimal. Despite of plenty of unused balance and very clean history. It may be problem because some people MUST use credit cards for work related expences reimbursements and they CAN'T use the same cards for their personal expences. Be very careful. May be it is good to get some discount when you apply for a new card, but may be you must close some other account at the same time. One card with high credit line looks better than 5 accounts with lower lines.

Card gal of LA 9:28PM December 10, 2008

You are right that interest rates on most retail credit cards are through the roof; however, you are completely incorrect that numerous open lines of credit make you look risky. On the contrary, if they are not used or used wisely, numerous lines of credit make you look safer to banks. First of all, it provides comfort in numbers. Other financial institutions deemed you credit worthy, so why shouldn't they. Secondly, if you have ample unused credit and you apply for a new line, banks know that you are in good financial health. If not, you would have balances on your pre-existing lines. Indeed, times like these are exactly why you should open numerous credit lines. Better to get ample credit before you need it. It's when you need it that it becomes more difficult to obtain.
Of course, all of this is true if and only if you manage your credit wisely.

Guest of NY 10:43AM December 07, 2008

Back when I had money and could pay off my credit cards and charge cards, I used my VS Angel card...a lot. I used it so much they upped my limit and gave me discounts because I had accrued enough rewards points. It was the one card I always paid off because of the interest rates. It's been inactive so long that they sent me an email reminding me I had one, and that they INCREASED my spending limit to 800 dollars a month.

Veronica of NY 8:19PM December 03, 2008