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705. Should I apply for as many credit cards and charge accounts as possible, even if I won't use most of them right away?




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This article is from the Credit cards and Consumer Credit FAQ, by adams@spss.com (Steve Adams) with numerous contributions by others.

705. Should I apply for as many credit cards and charge accounts as possible, even if I won't use most of them right away?

This may create a problem -- actually, two problems.

Many lenders look at your total credit limit on each account to
determine whether they want to give you additional credit. If you
have ten Visa cards with a $5000 limit on each, and five have a zero
balance and the other five have $100 each, your actual debt is $500.
Some lenders may evaluate you on the basis of $50,000 of debt
because you could go out tomorrow and charge that much.

Merely applying for many accounts can also create a problem; see
"What are 'inquiries' on my credit report" in section 8, "Getting
and reading your credit report."

 

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