Would my credit history be affected if I get a charge card???

Question

So this is the deal, I hold a credit card with AMEX, and the other day while asking them something, they said that I was pre-approved for the AMEX Preferred Rewards Green Card. If I was to get it, this should help me raise my credit score, since I then can use my current credit card only up to 10% of my credit limit -to help my credit score, while using the Preferrerd Rewards card to collect membership reward points without worring about affecting my credit score. Am I right on this thought pattern??

I have always paid my balance in full ever since I got the AMEX credit card, so I don't think it'll be a problem for me to pay the Preferred Rewards Charge Card in full every month. My concern is, if I get the charge card, would this show in my credit reports? If it does, how would getting the Preferred Rewards Green Card affect the credit report (since the charge card doesn't have a preset limit)?

I tried contacting the AMEX customer repr. but they said it may or may not affect.

Answer 1

If your payment history has been good, it will be fine. If you mess up even ONCE on your payments, it will dock quite a few points from your credit report! If you do make sure that your charge is less than half of your limit on each of them, it keeps the debt-ratio down; thus, you will be able to get a lower percentage rate if you are looking to purchase anything like a car or home.

Answer 2

No, in fact you'll have less "debt potential," which is a good thing to lenders. Oh actually, if you are carrying balances on those other cards (shame on you) than keep this one open so you have a higher credit to debt ratio (showing you don't tend to max out or abuse your available credit). There's a lot of advice for new credit builders but the best is: buy only what you have cash on hand for, use the cards to buy everything and pay them off with said cash as soon as you get the bill (thus maintaining a zero balance).

Answer 3

It is good you always pay off your balances on time. Your credit will only improve if you keep doing so. The richest people in the world only have one credit card; that always looks best on your report.

Keep the original and only use the other once in a long while to keep it active in case of emergencies. That way you won't be tempted to go into debt. Your credit report will only improve if you limit yourself and keep a good pay record.

If you are really good with money and trust yourself not to overspend, then use the Preferred. It is up to you in the long run. I'd use the card with the most prestige and best rate.

Sounds like you'e doing a good job! Keep up the good work. If you have good credit, it says you are responsible and as good as your word to the whole world. Good luck.

Answer 4

I don't think it will affect your score unless you are late. Since their isn't a limit you can't get a ratio. They might show like a credit card and your high balance show as your limit so if you charge $5K once then never charge that much again you would have a great ratio. I wouldn't worry too much unless you were trying to buy a house then don't use it for the 2 months before you buy.

Answer 5

Yes it will show on your credit report but as long as you pay on time, you won't have any problems. Might even improve you credit score.

Only charging what you can pay in full each month is a very good thing. It keeps you out of debt and saves all that interest.

Answer 6

We just bought a house and our loan officer said it doesn't matter how many cards you have as long as you keep the balance of each card under 50% of your limit.