Credit Card Do’s and Don’ts

iStock_000003753458XSmallCredit scores are sensitive – reacting to everything you do and don’t do. Here are 4 ways to respect your credit scores’ sensitivities and stay in their good graces.

Do ask for a credit limit increase – but don’t use it! Some financial advisers tell consumers to ask for a reduction in order to limit their own spending. But it’s far better to set and respect your own limits. Keep your credit limits as high as possible and your use as low as possible.

A large gap between available credit and use will raise your credit scores. A 70% cushion is good and more is even better.

Note that this limit should be imposed on each and every card you carry, which brings us to a mistake that many consumers make in their efforts to save money: Consolidating accounts.

Don’t consolidate accounts if it means you’ll “max out” a card.

You can be sorely tempted to move all your high-interest balances to a card offering a low promotional rate. After all, the less interest you pay, the more you can apply to the balances, but think twice.

As long as your consolidated balances stay below 30% of the credit limit on your low interest card, you’re safe. But when you “max out” one card your scores will drop – even if you have zero balances on 3 or 4 others.

Do pay attention to old credit cards.

The older your credit history the better, so hang on to the cards you’ve had the longest, and use them every few months to keep them active in your credit file. If you let them gather dust they’ll stop carrying much weight toward your credit scores and you’ll also run the risk that the card issuer will cancel them for non-use.

This will reduce your overall available credit, lowering your scores.

So take out the old card every 2 or 3 months, use it for a purchase you were going to make anyway, and then pay the bill when it arrives.

Don’t ask for more if you have plenty.

If you already have enough credit cards, don’t ask for more. Resist those in-store promotions offering you a percentage off today’s purchases when you apply for a card and just use the ones you already have.

On the other hand, if you’re in the credit-building stage, go ahead and get a new credit card or a store line-of-credit every few months. Having 3 or more credit accounts that you always pay on time shows creditors that you can manage money.

Author: Marte

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Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.