Here
are two important questions you should consider before
applying for credit:
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Is it a good idea to fill out every credit offer I
get? Isn't that like money in the bank, to have credit
available, even if I don't need it now?
No, it is definitely not a good idea to apply for
all the credit you are offered for two reasons. First,
having too much credit at your disposal can give you
a false sense of security and cause you to spend money
that you don't really have. Remember, credit is not
cash; it is a loan that must be paid back. Second,
you could be turned down for a car loan or a mortgage
if it appears that you have more credit than you can
handle. Even if you aren't using the credit you have
available, creditors assume that you could use it at
a moment's notice. So potential creditors consider
all your available credit when evaluating any new applications
for credit.
Why should I limit the amount of credit I have?
You want to be certain you only use the credit you
need and can afford to manage. Otherwise, you can get
into credit problems by using more credit than you
can pay for. This could lead to late or missed payments,
which will weaken your credit history.
AMEX
