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post #20 of (permalink) Old 01-30-2013, 03:22 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.

scbrooks87 is offline  
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