Benefits of another credit card?

glasgowm148

Hey all,

I've spent the past year slowly repaying my debts. Paying off £2k in personal debt (to friends/family, rent arrears, etc) and have made a big chunk in my credit card debt. I still have about £1.2k to pay off but my credit is good enough that I'm showing at 90% approval for some cards now.

Is it wise to get another credit card and just use it for my train passes? I figure this will increase my overall credit, decrease my credit card utilisation % and also give me another item which adds a 'Payment made' each month to my credit score.

I know I'll probably get responses like 'avoid or you'll fall into the same trap!' but I'm not worried about that, had my lightbulb moment and not going back. Just unsure of how much (if any) positive effect it'll have.

Ta

January2015

I would say don't get another credit card. You already have two. Regular payments to those will be sufficient to benefit your credit reference files.

I know you said you'd get responses about avoiding / falling into the trap - but with a signature which shows you significantly into an overdraft and utilising credit cards then I have to ask have you really had your LBM? Another credit card could be the slippery slope towards increasing debt levels.

glasgowm148

January2015 wrote: »

I would say don't get another credit card. You already have two. Regular payments to those will be sufficient to benefit your credit reference files.

I know you said you'd get responses about avoiding / falling into the trap - but with a signature which shows you significantly into an overdraft and utilising credit cards then I have to ask have you really had your LBM? Another credit card could be the slippery slope towards increasing debt levels.

What makes you think I'm utilising them? Haven't used them at all just being paying back cc first before moving onto overdraft. Haven't spent a penny on credit in months.

Thanks for the original part of your comment though

Fireflyaway

If you already have debt, why do you want more? I don't think its worth the risk. If you forget a payment or get tempted to use it but then can't pay it one month due to an emergency you will be worse off. Stick to paying one card on time and pay off the remaining debt. Lenders will look at your overall available credit and be put off if it high

enthusiasticsaver

Taking out another credit card won't have any positive effect. In fact just the opposite.

You have done well to make a start on clearing the debt but you still have an overdraft to clear and getting another credit card will put you back at square 1. An overdraft is one of the most expensive ways of borrowing so I strongly suggest you tackle that and budget to pay your bills without relying on credit.

glasgowm148

Fireflyaway wrote: »

If you already have debt, why do you want more? I don't think its worth the risk. If you forget a payment or get tempted to use it but then can't pay it one month due to an emergency you will be worse off. Stick to paying one card on time and pay off the remaining debt. Lenders will look at your overall available credit and be put off if it high

I wouldn't have more debt. I'd have more credit. Wouldn't be using the card except a few quid a month to keep it active.

nkkingston

But why do you want more credit? What's it actually for? If you're thinking of your credit rating, don't bother - big lenders like mortgage companies don't care about your rating, they care about your actual debt and spending. Having more credit available to you can actually damage your chances in the eyes of a mortgage lender, because they have to assume you'll use it, and that could affect your affordability.

itsallabitmuch

I'd personally advise you to not get another card - it is pointless. It won't increase your credit rating by having another card - as nkkingston said, it just looks like you've got all that lovely available credit just waiting...and they will always assume you're going to utilise it at some point.

No offence is intended in this, but you appear hell-bent on getting one anyway - so why are you asking? People have given you their opinion, and you don't agree - that's completely fine (just don't see what the point is as it looks like you're wanting to get another card regardless).

Apologies if I've read this wrong - as I say, no offence intended.

EssexHebridean

Yes, do remember that under utilisation of available credit can be damaging too - not just over utilisation.

If you're really concerned about your credit file, then your priority is to get rid of that overdraft. That really won't be helping.

OneLife_OneShot

I wouldn't bother, I am almost clear of my cards and overdraft. The last thing I want is to take another on, that's just me though. But not a chance I would advise anyone paying off debt to take on another one.

ReadingTim

Pay off the 2 you have first. Then, if feel you need to improve your credit score/history buy your monthly train ticket on one of the existing cards and pay it off in full. Each month. Every month.