cancel
Showing results for 
Search instead for 
Did you mean: 

Don't app for CCs if you can't pay off the ones you have.

Super Contributor

Don't app for CCs if you can't pay off the ones you have.

I've seen a lot of threads lately where someone with existing revolving debt that they aren't able to pay off is asking whether or not they'd be approved for X credit card, if they should apply for X card, etc.  I find myself often chiming in with a very conservative response, which is that if you aren't able to pay off your current revolving account balances tomorrow, you shouldn't be thinking about applying for additional credit.  I think this point is worthy of a thread of it's own, so here it is.  I fully understand that there are more aggressive individuals out there and that my conservative stance/approach here may not be welcomed with open arms by all.  I do however think it's a very important viewpoint to consider, as giving yourself the ability to take on additional revolving debt when you aren't able to eliminate your current revolving debt isn't a sound financial move most of the time.

Message 1 of 26
25 REPLIES
Valued Contributor

Re: Don't app for CCs if you can't pay off the ones you have.

Good post.  Some people seem to apply and spend.  others like to apply/cli and pad.I am waiting for the day DW uses her Amex card to buy a new car. lol

Message 2 of 26
Regular Contributor

Re: Don't app for CCs if you can't pay off the ones you have.

I partially agree with the concept of not applying for more credit unless I can pay off the balances I already have. I guess it just depends on the person. For example:

 

I have about 12 cards. Out of those 12, the only one I ever intend to put a massive amount on and keep a balance on for any period of time is Care Credit. The other cards, I use for cash back and rewards mostly and PIF, some things like car insurance I charge and then make payments for a few months so I have the option to not pay it all at once but that's about it. When I apply for new cards, it's mostly just to obtain a new cash back card or to pad my utilization. I never apply for cards with the intention of using the whole credit limit or even close to it (except for Care Credit which I see as somewhat different because I use that to finance dental stuff that I'd never be able to afford unless I made payments). I guess for people who have the self control to not spend all of their available credit, applying for a new card isn't so bad. However I do know people who have their cards maxed out most of the time because they can't control themselves around a large credit limit so in their case, applying for new credit when they can't pay it off is a bad thing.

Message 3 of 26
Frequent Contributor

Re: Don't app for CCs if you can't pay off the ones you have.


@BrutalBodyShotswrote:

...if you aren't able to pay off your current revolving account balances tomorrow, you shouldn't be thinking about applying for additional credit...  


Wise words

 

Credit cards to me are simply debit cards with a parachute.

 

Cash back, points and miles are nice but I'll never put a dollar on any CC unless I can pay it off when the statement cuts.

Message 4 of 26
Established Member

Re: Don't app for CCs if you can't pay off the ones you have.

Well a lot of new cards have a 0% bt offer. If you have debt on a card and can’t pay it off right now a new card and doing the bt is worth it to not get killed on interest.

Just my thought... obviously someone shouldn’t be using credit if they can’t pay it back.
Message 5 of 26
Senior Contributor

Re: Don't app for CCs if you can't pay off the ones you have.

Though I agree, I look at this as common sense. I try not to get on the pulpit when I come to this site.
If I went through my life doing what some believe is best for other people. I'd have missed out on learning so much more when it comes to credit and how to maintain and grow it.
Some of you remind me of Waterboy's mother...it's the devil, the devil. 😂

I have no idea what someone else's situation is or their end game. So I tread lightly on insulting one's intelligence when it comes to matters like this.
FICO 8 Scores EQ=776 TU=783 EX=777 (INQ) EQ=12 TU=11 EX=11
TCL=$600K+ / AAOA= 2.9 yrs / Oldest account = 10.9 yrs
Message 6 of 26
Highlighted
Regular Contributor

Re: Don't app for CCs if you can't pay off the ones you have.

Almost 6 on one hand, half dozen on the other.

 

Some people default and spiral out of control with their debt.

Some people manage debt very wise and keep it under control.

 

Not paying interest is a very handy tool, and as long as peeps can 

use credit but not pay interest, opening more cards have some benefits.

HOWEVER if some are trying to open new cards with already 

paying interest on balances they already have....well then 

it could be like handing them a shovel to dig about 5+ ft deep!

 

Must use common sense and apply it in all situations in life.

Same can be said about auto loan, mortgage etc.

(TUfico8 810)--(EXfico9 804)--(EXfico8 798)--(TUvs3.0 767)- CL- pers 175k+ util~5% biz $85k+
IHG 14.2k--BOA 15.5k--Amazon Prime Store 10k--Amazon PrimeVS 500--Amex Blue Cash Everyday 6k--WellsFargo Cash Wise 14k--PNC Core 10.2k--WalmartMC 10k--SearsMC 10k--Lowes 18k--Toyota 6.5k--Capital One 5250--BP 10k--Home Depot 24.2k--Chase FU 6.6k--Discover 15.5k
BIZ- Amex Plum NPSL--Amex SC+ $13.5k--Amex B4B $12k--Chase Ink $36k--PNC $25k
Message 7 of 26
Super Contributor

Re: Don't app for CCs if you can't pay off the ones you have.


@Gmood1I have no idea what someone else's situation is or their end game. So I tread lightly on insulting one's intelligence when it comes to matters like this.

I don't see any intellegence-insulting going on here.

 

I think many people simply don't see their debt as a liability for whatever reason.  They think that if they're making the minimum payments or "double the minimum payment" that they're in a good place.  You can see this all the time in the CC forum and application forum.  I'm simply trying to create awareness for anyone that falls into that category, especially if they're starting threads asking which card they should app for next. 

Message 8 of 26
Frequent Contributor

Re: Don't app for CCs if you can't pay off the ones you have.

While I don't necessarily agree with such a hard and fast rule, I definitely agree with the general principle.

 

Budgeting is hard.  Most people (myself included) make it to early adulthood without having any idea how to manage their personal finances.  Adding credit cards into this mix is a recipe for trouble.  Running up credit card balances just because your day-to-day spending is more than your income is a great way to get stuck in a feedback loop of paying tons of interest to credit card compainies for years on end while barely scraping by.

 

That being said, carrying a balance can be OK, as long as you have a plan to pay it to zero within a fixed amount of time, and preferably with a low promotional interest rate.  For example, last year I knew I was going to have a ~$5,000 expense to deal with.  Rather than deplete my liquid savings down to zero, I found an 18-month 0% interest offer on one of my cards, and used that instead.  I calclulated that I would need to pay about $300 a month to pay it down to zero before the interest kicked in.  I could fit a $300 expense into my monthly budget fairly comfortably, so that's what I did.  I was able to add an extra $50 to $100 to my payments most months, and I ended up paying the thing off several months early.  That's the kind of flexibility that credit cards are great for, as long as you manage them wisely.

Message 9 of 26
New Contributor

Re: Don't app for CCs if you can't pay off the ones you have.


@Backwoodswrote:

Good post.  Some people seem to apply and spend.  others like to apply/cli and pad.I am waiting for the day DW uses her Amex card to buy a new car. lol


I've often considered a car purchase with a Credit Card. If you have the funds to immediately pay it off that would be a like $320 Cash Rewards with a Citi DC on like a new base model Toyota Corolla. I also believe that you can negotiate a better price negating that $320 cash rewards rate by paying cash instead.


EQ 812, TU 817, EX 798
Message 10 of 26