Why You Should Stop Opening Credit Cards

Thinking about getting another credit card? Maybe you should read this blog and reconsider!

Credit cards can be an excellent tool for covering unexpected expenses. Using a line of credit wisely can also help you secure a better financial future. But overdoing it could have the opposite effect. Here are a few reasons why you should stop opening credit cards.

Credit Hits

Did you know that high credit utilization can significantly harm your credit score? Having credit is necessary to maintain a credit score, but that doesn't mean you should pile on the debt!

Credit utilization refers to how much of your credit you're using. It's the sum of your balances across every card! While there's nothing wrong with some utilization, anything over 30 percent can affect your score negatively.

Opening more credit cards only makes that figure worse.

Plus, you have to think about how applications factor into the equation—every application for new card results in a hard credit inquiry. Too many of those, and your score will decline, too.

Payment Difficulties

It's easy to get lost in the possibilities of a high credit limit. But what happens when those payments come due? If you're looking to decrease debt with low income, credit cards aren't the way to do it.

Even if you make the minimum payment and nothing more, you'll still have several bills with multiple credit cards. Those payments add up, turning your shopping spree into a nightmare financial situation.

A Revolving Door of Debt

Opening several credit cards can put you into a never-ending cycle of debt. It makes your attempt to decrease debt with low income a near impossibility.

Some people like to open new cards to transfer the debt, moving one balance to another card. That technique does nothing to reduce your debt. If anything, it increases it with changing APRs and extraneous fees.

Credit cards often have a high APR as it is. Racking up debt only makes things harder to pay off. In the end, you might pay several times more than the initial purchase.

Taking Charge of Your Finances

If you want to improve your financial situation, the first step is to stop opening new credit cards. Having a line of credit open for emergencies is good, but resist the urge to open new store cards and accounts. You'll thank yourself later when you avoid the common pitfalls of revolving credit card debt.

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