Credit Report and Credit Score Online

There are many reasons to want to get new plastic: maybe you want another open credit line, or need a back-up credit card, or are interested in bonus rewards or cashback. Whatever the reason, getting a new credit card is exciting, but can also lead to a bad decision of getting the wrong card, getting hit with surprise fees, or damaging your credit score.

If you’re in the market for new plastic, consider these three simple points first.

1. Is it the right kind of credit card for you? You might want a rewards credit card to earn you points or cash back, but if you’re prone to carrying a monthly balance, rewards cards have a notoriously high interest rate that will cost you. Low interest rate cards are ideal for people who don’t need reward bonuses but just want to keep interest charges low; however, low interest cards usually require good to excellent credit to qualify. Or maybe you’re looking to move your current debt to a card with a lower APR, then you should set your sights on a balance transfer card. The most important factor when picking a credit card is knowing which type fits your spending habits and financial lifestyle.
2. How will it impact your credit score? Adding a new credit card can impact your credit score in different ways. First off, every issuer you apply with will conduct a hard inquiry on your credit report and ding your score a few points; take care to minimize the amount of credit cards you apply for to minimize the multiple hard inquiries to your file. Adding a new credit card can often positively impact your credit score since it increases the amount of credit you have available and lowers your credit utilization rate. However, adding a new credit card can also potentially lower your credit card if you begin piling debt, pushing the credit limit, or paying late. Check out Credit Karma’s Credit Score Simulator to see how certain actions could affect your actual credit score. Getting a new credit card is a double-edged sword: it may help your credit score with a few points boost, but could be disastrous in long-term damage if you mismanage the card with bad credit behavior.
3. Did you read the terms and conditions? Rewards are getting cut, interest rates are climbing, sneaky annual fees and extra charges are being inserted, and credit cards in general have many changing terms in light of last year’s CARD act. Plus, the rules will change again after the impending financial reform passes later this year. The most dangerous thing to have in your wallet is a credit card you don’t fully understand how to use or what the consequences could be. Before you sign off on the dotted line of your credit card agreement, familiarize and understand your issuer’s terms and conditions or find it here at the Consumer’s Guide to Credit Cards.

Above all, know what you’re getting into before you open a new credit card. If everything checks out and your card is a good fit for you, enjoy the newest addition to your wallet by using it responsibly.

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