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post #20 of (permalink) Old 01-30-2013, 02:22 AM
Planted Member
Join Date: Nov 2012
Location: El Cajon
Posts: 220
The benefit of having an open credit card with zero balance is that it helps you debt/credit ratio. So lets say you have 1 credit card with a $2000 limit, and have a $500 balance on it, then you're at a debt ratio of 25%. But if you have a second card with no balance on it, and another $2000 credit limit, your debt ratio is now only 12.5%

Usually anything over 16% debt ratio is considered to be too high by credit card companies, so sometimes it IS beneficial to open another card if you expect that you'll be making a large purchase that you'll be paying off over a long period of time. Hard to know which would hurt worse, the credit inquiry, or the very high debt ratio. Probably depends just how high the debt ratio would be.

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