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I posted recently about closing my BOA card because of the annual fee. It had a $14k credit limit.
I have an offer from Discover for a 0% APR card until June 2010. I am considering opening it to make up some of the credit line I gave up when I closed my BOA card.
I would use it, because if I charge $600 I will be eligible for a $75 bonus.
My credit score is 750+... at least it was before I closed that BOA account... don't know how that action affected my score.
In light of these new days in the CC world, would this be a good idea? Or would opening a new CC hurt my score (or maybe even my 2 regular cards more)
BTW my "regular cards" are an AMEX that I use when I shop at Costco & a Capital One with 1% cash rewards, that I almost always pay in full (or leave a small amount carried over)
I have had a Discover card since 1988 IIRC, have never paid any fees or interest, get the cash-back rewards, if you pay the bill off every month I don't see any downside.
I have to say I am exactly like you.. I also have an Amex and Capital One card. I definitely don't see a down side in opening up the Discovery card. Although, I think the thing you need to ask yourself is do you really need that big of a credit line? Unless there is some added benefit you are receiving from the card, I think it might be better just to stay with what you know that works.
One thing I might suggest you do is open up credit cards at retail stores you shop at frequently and just pay them off each month. You actually save a boat load with the added discounts.
Personally i use my discover card more than any toher card because its accepted at most places and pays money back. Other than that I use a visa where not aceepted which is are few now days. I don't like having alot of cards.Never had a problem with them but I do not carry a balance on any card.
You'll get a small hit to your score by applying for a new card, but the hit is relatively short lived and is completely gone from your report after 2 years.
Discover cards always seemed pointless to me as they are not accepted everywhere.
Discover cards always seemed pointless to me as they are not accepted everywhere.
That is true, it can be a pain for your Discover card not being accepted (and somewhat embarressing at times). However the rewards are some of the best I have seen, there is no annual fee, and they give you a pretty large credit limit (just in case you want to throw a downpayment on a car like I have). I carry a Discover (which I try to use for everything) and a Capital one with me at all times.
Why are you so concerned about your credit score, or at least the very small amount it might be affected by closing or opening a new account?
I would ask yourself these questions - "Do I want to have XX amount of unsecured credit available to me for free, and have the opportunity to get cash-back bonuses on certain types of purchases? Am I responsible enough to not run up a huge debt?"
Only open it if you are planning to pay it off every month. Once the intro rate runs out, it will switch to a hefty APR. Also, keep in mind the 1% cash back only applies after a minimum purchase something in the range of $2000 or so. The initial purchase earns only 0.5 a percent. They do have 5% cash back specials that will apply to specific transactions in a 3 month span or so. For example, supermakets and gas charges will earn 5% from Oct-Dec. 2009, which is a nice perk. However, unless you plan on using it alot and pay it every month, don't bother. I wouldn't open it up just for your credit score.
^ on the 5% they cut you off at 200 in purchases. So in the first month Im always capped off.
No the 5% will apply to all purchases that qualify in that specific time period with no maximum. So, if you spend a ton of money in the time period on those specific transactions you can earn quite a bit. So, it is a nice perk.
The initial purchase I was mentioning works like this:
The first $1,500 you charge from each anniversary date earns .25% cashback. $1,500 to$2,999 earns 0.50% and anything after $3,000 you will earn 1 percent. Not so great if you don't spend a lot with the Discover Card.
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