Under the right circumstances, getting a new credit card might prove a worthwhile investment. That being said, the opposite is also true. Getting one at the wrong time could turn out to be more harmful than good.
You should evaluate your financial situation beforehand. You have to figure out where you’re currently standing. This way, you can then figure out whether they can manage the responsibility that comes with it.
Here are some scenarios in which you should avoid getting a new card in its entirety.
You frequently max out your credit cards
First of all, let’s get something out of the way. Emergencies happen. More importantly, they can occur when we least expect them and ask a lot of money out of us.
When facing these sorts of situations, it makes sense that we could max out some of our credit cards. Under these circumstances, it’s completely okay to do so.
The real problem lies whenever someone maxes them out due to poor financial management. For the most part, this is the perfect way for anybody to stress out their finances to the utmost limit.
If you identify yourself with this statement, you shouldn’t get a new credit card. It would only lead to increased spending temptation.
Having lots of credit cards lower your chances of getting loans
To simply put it, you shouldn’t get a new credit card if you already have too many of them.
Managing a single credit card is already hard enough on its own. More so when there are more involved. It only takes a few mistakes, and your credit scores could end up taking a heavy toll.
Not only that, but every time you receive a new credit card, your scores decrease at first.
Keeping up with good credit scores is essential for getting loans approved. More so, it’s essential for getting great interest rates in said loans.
On a similar note, lenders take the number of credit cards in your possession when looking at applications. If they notice you have a surplus of credit cards, they might think you’re way too reliant on them.
Under these assumptions, they might think you will not be able to pay back any loan and immediately deny your application. Whether or not that’s the truth, it will not matter to them.
If you’re currently applying for a loan, it might be for the best of you to avoid getting a new credit card right now.