By financen | February 16, 2008 - 6:15 pm - Posted in Credit, Credit Card

According to my research done over the past few years, I have realized that over 5000 people are searching for some kind of credit card every day. They usually need a credit card because of their bad credit history or a need in their business. I have asked some people if getting a new credit card will be a good idea when someone is already going through bad credit. Most people are aware of the answer and this will certainly be “Hell no!”

These credit cards are often the main reason of people having bad credit. If your personal finance is already screwed up and you are thinking that credit card will be a solution, you are nowhere thinking right. Too many people think that they will get back in control if they can get one more card and with this, they will balance their finance. Then, they will turn things around, and everything will be okay. But the fact is that it is never going to be okay because the underlying causes of the problem still exist and until they are corrected.

Few people are actually able to track their finance properly. They have a little clue about where their money is going after doing some major expenses and in the end, they realize they have nothing left. It will be a good idea for people who are not financial savvy to use budgets, keep a track of their expenses, and go over the billing statements. They seem to be blindsided and wake up in the morning in shock having a little hope of reversing the situation. If you can relate with the same situation here, know that you are not alone. Come out of the bad habits if you have one of these – being too social, gambling, or myriad other causes of excessive spending.

You can use a credit card to reestablish a good credit, but it’s important that you have done all the ground work first. Keep a control on your spending. If you are still spending more than you make, getting a new credit is the last thing that you must be doing in this case. Pay off any outstanding debts that you have on your existing credit cards. If you are already using some cards, don’t get a new one. Just pay off all the dues and keep them away from you. Keep one card aside just for any emergency use and make sure that you pay it in full within the due date. Keep the accounts open, because an old account with availability of more credit will help improve your credit scores over the time. Your accounts have to be in good standing and the scores will go up in the future. Maxed out, or close to the limit cards will detract from your credit score.

Another case when you should be using a new credit card is when you have lost all your previous cards or they are already closed. In such a situation, you will need to have some type of credit card account to begin a successful track record of making timely payments. FICO scores system will look at two important factors of your credit. First, how much credit you have, and your credit profile. You must have a balanced mix of credit types, such as personal loans, revolving credit, and mortgages.

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