I am building up my credit score with two modest credit cards. One of them is offering me another credit card with a higher limit. I don't know if it will help or hurt my credit score. Let's assume that I continue making payments more than the minimum and always on time like I have been for over a year now. Should I accept the new card?
The following is the opinion of the folks at Experian:
You can manage your credit utilization ratio in several ways, including:
This last option, however, has the potential to negatively affect your score in the short term. Credit scoring models also consider the number of times new creditors — such as a new credit card company — have looked at your credit report within a certain time frame. Too many inquiries in a short period of time can influence your credit scores. In addition, having too many credit cards compared to your overall credit mix may also be a risk factor and could negatively impact your credit scores. You know yourself best, and if having open cards with high limits could prove too tempting for you to overspend, carefully consider the right number of accounts for you based on your personal strengths and financial abilities.