Credit card companies have a way of constantly creating new cards with unique perks and enticing reward programs. While all the so-called benefits of a potential new credit card can be enticing, opening up too many credit cards at one time can not only tempt you to spend beyond your means—after all, you’ll usually need to spend money to earn the rewards—but it could also potentially harm your credit score.
If you are struggling to repair your credit score as a result of owning too many credit cards, it can be helpful to work with a skilled credit card debt attorney. An experienced lawyer can look at all the factors surrounding your debt and develop the best strategy for your situation. Here are some reasons why you should avoid opening several credit cards simultaneously.
It May Damage Your Credit Score
Every time you apply for a new credit card, the credit card company will check your credit history. When a third party runs a check on your credit to determine your eligibility for any kind of credit—a loan, mortgage, or credit card—it’s referred to as a “hard check.” While a single credit check will usually only drop your score temporarily by a few points, multiple hard credit checks can make your score volatile. This is not ideal, especially for individuals looking to qualify for larger purchases like a mortgage.
Multiple Hard Credit Checks Can Deter Lenders
One hard credit check usually only affects a person’s credit score by 5-10 points. However, multiple credit inquiries, especially over a short period of time, could drop your score by up to 30 points. This can be a red flag to lenders, as it could signal that you’re overextended in credit or have unstable finances.
With More Credit Cards, There Is More Temptation to Overspend
Credit cards can feel like free money. And the more credit cards you have, the more likely you are to go out and use them. Additionally, the rewards and perks of the credit cards advertised by the credit card companies don’t kick in until you earn them—through spending. These factors usually cause people who open a bunch of credit cards to engage in overspending habits. As a result, individuals can rack up credit card debt that can easily get out of control.
Take Breaks between Applying for Credit Cards
Ultimately, if you want multiple credit cards and feel like you can handle them responsibly, the best thing to do is to space out your applications. Opening too many credit cards at the same time is almost always a bad idea. In general, you should wait a minimum of 90 days before applying for a new credit card after your last application. Spacing out your credit card applications is the best way to avoid overspending and avoid harming your credit score.
Contact a Skilled Debt Settlement Lawyer
If you have accumulated credit card debt that you can’t manage, you are not alone. While credit card debt can be overwhelming, it’s best to get on top of the situation as soon as possible. Leaving credit card debt unattended can negatively impact your credit score and ability to qualify for big life purchases such as a house or car. The best way to effectively mitigate credit card debt is to meet with a skilled debt settlement attorney.
At McCarthy Law, we are dedicated to helping our clients navigate their financial circumstances and reach a favorable debt settlement. We understand the overwhelming burden that debt can have on people’s lives and are committed to helping clients end the cycle of debt. To schedule a consultation with one of our skilled debt settlement lawyers, call our office at (855) 976-5777 or fill out our online contact form.