Debt Solution Blog

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Debt Help Blog

The legends that grow up around credit cards aren’t quite as easy for the average person to research and refute. Credit card issuers can be pretty closelipped about their practices, and even those who proclaim themselves experts in the field can get it wrong.

People have changed their minds about opening new credit cards after they’ve applied, then asked if they could undo the damage to their credit scores by not calling to activate the card.

Sorry, but the ding to your credit scores — typically 5 points or less — happens as soon as the issuer pulls your credit reports, which is usually within seconds of receiving your application. The account shows up as active on your credit reports shortly after the card is approved. You do need to call the activation number, though, if you ever want to use the card. That number is typically listed on the removable sticker on the front of your card when it arrives in the mail. There is also identity theft, typically a store ask for ID because they’re trying to reduce their own fraud costs. Now if a clerk memorizes or writes down vital information from your driver’s license — your address or date of birth, for example — you’re the one who could be at greater risk of identity theft. You’ll certainly deter use of your card, as long as you sign the back of it. Merchants aren’t supposed to accept one that’s not signed on the back. Limit the number of cards you have. Experts recommend having two to six cards. Applying for lots of cards can hurt your credit score. Conversely, closing several credit cards at once will trigger a decrease in your score. Don’t take the bait when companies want to issue you one low-limit card after another. You can find yourself back in debt, paying late fees, over-limit fees and high interest rates on multiple cards. If your credit score is 700 or above, you may be able to get a lower interest rate or get the company to drop a late fee. The most important thing to know is don’t exceed 30% of your credit limit on each card. Credit bureaus don’t care if you pay off your balance each month. They’re interested in how much of your available credit you use. Control Your Debt and save your money.