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How opening a new account may help or hurt my credit

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Established Member

Re: How opening a new account may help or hurt my credit

I am going to be very blunt

 

You do not need any more cards

You need to pay off your debt

When your debt is paid off

Then we can talk about a new card

 

Thanks for joining

EXP: 698 EQ: 705 TU:729
Oldest Account: 1yr
Barclaycard Apple: $700
Macy's: $500
Capital One Quicksilver: $500
Private Card: $5000
Message 11 of 13
Established Member

Re: How opening a new account may help or hurt my credit

I am going to be very blunt

 

You do not need any more cards, you need to pay off your debt. When your debt is paid off, then we can talk about a new card

EXP: 698 EQ: 705 TU:729
Oldest Account: 1yr
Barclaycard Apple: $700
Macy's: $500
Capital One Quicksilver: $500
Private Card: $5000
Message 12 of 13
Regular Contributor

Re: How opening a new account may help or hurt my credit

1. Product change your Cap1 Plat to a QS - you get 1.5% cash back instead of 0% and every penny helps in your case, if you were to use the card.
2. Your credit should be fine for a job - take a breath, you can do this.
3. Getting another card is NOT a bad idea if it's a balance transfer card. Unfortunately, I think you need about 30 more points to get approved for most of them.
4. A lower APR card for current spending will help a lot - I got an Amex BCE in a similar situation as yours with +10pts, APR of 17% to beat out the Cap1 of 26%. It's worth a shot for Amex when your score hits 650's.

Most importantly,

5. Do NOT spend on your credit cards right now. Only spend on your debit or cash, and pay the cards with what's left. Otherwise, you're compounding the interest into future cash flows, which increases liquidity risk and hurts your ability to pay off in the future.
6. Out of your two cards, pay the minimum on the lower APR card and pay the most you can on the higher APR card. You gain by paying down principal on a higher cost to you.

Question:

Do you have a 401k that allows you to take out a personal loan?

If so, you should leverage it. The interest pays back to yourself and it's going to be about a percent higher than the current prime rate or LIBOR rate which is right now ~6.5%, a significant lower rate than paying the credit card companies.

Goal Score:725

[ Chase Sapphire Reserve - $22400 ]
[ BofA BankAmericard - $16000 ]
[ AmEx Blue Cash Preferred - $16000 ]
[ Cap. One QS - $7800 ]
[ Cap. One QS - $7000 ]
[ Discover IT - $4500 ]
[ AmEx EveryDay Preferred - $2000 ]
Message 13 of 13