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How can I use about $2000 to increase my wealth?

New credit card or credit line increase?

  • I currently have 2 credit cards both from chase. My oldest one has a limit of $4000 and my newer one has a limit of $9000. I primarily use my newer credit card for pretty much everything from bills, rent and food. I'm normally spend around $2000~3000 a month and occasionally up to 4000. Because I use my CC for all my purchases, I'm interested in raising my entire credit limit as to lower my debt-credit ratio. I've been reading around and it seems like a request for a credit line increase will usually result in a hard pull. Would it be better to open a 3rd CC or get hard pulled for a credit line increase? It's been at least a couple years since I got a credit line increase for my old card. It normally has a balance of no more than several hundred dollars. I pay both my credit card bills in full. I also have a student loan of $4500 which I'm not required to start paying until 2014. Does that loan on my record increase my debt to credit ratio? Would it be better to just pay it all back in full right now or just start the repayment plan earlier?

  • Answer:

    You can possibly get an increase on the $4k Chase card, but I do want you to know that it will be a hard inquiry. I have a Chase card & my increase request was a hard one. But...keep this in mind, high limits beget higher limits. You can request the increase & check your reports (if you don't already know) to see which report Chase pulls. For my card, Chase pulled Equifax only. For you, depending on the State you live in, they may pull another report. One thing I learned years ago, never app for anything without checking who pulls what. I use a site called Creditboards. They have a section called the "credit pulls database". To see this section you have to sign up with a username & PW. Once you do this & go to that section, just punch in the card name & leave the other sections blank. You can see all over the country, who got what limit, what is the apr, what FICO score they had & other info too. That site is invaluable & I never app for anything without checking there first. Of course, it helps to know what is on your reports & what your FICO scores are as well. If you go for the increase, wait at least 6 months until you apply for anything else.

Steven Ham at Yahoo! Answers Visit the source

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Other answers

Your current debt limit is $13000. It sounds like the most you spend is $4000 That's a debt to credit ratio of 30% Why bother doing anything. Your student loan causes a debt to income ratio. What are your credit goals - do you want to purchase a house or car in the next year or so? If not, there you don't need to do anything. Paying your student loan off each month will increase your credit score because it lengthen your credit history.

A Hunch

Just call Chase and ask for a credit limit increase. With your usage (paying in full each month) they are very likely to do this. It will be treated as a soft inquiry since you already have an account established. Soft inquiries do not affect your credit score. Even when hard inquiries affect your score, the damage is only 1 or 2 points out of a possible 850 score. The damage is temporary to the fico (1 year), although it stays on reports for 2 years. A new credit card will definitively be a hard inquiry. I would seriously pay off that student loan. After pay off, it will report positively for 10 years on your credit reports. Remember that the loan is probably accruing interest. * Please have a 6 month emergency fund set aside before paying down debt.

Go with the flow

I would open a new card that offers 0% with a balance transfer check. Then use the check to pay off your student loan. This is a two fold advantage. One, you save the interest charges on the student loan. Two, if you lose your job or have other issues you can file bankruptcy and have the debt charged off. Student loan debt can not be charged off in bankruptcy. Just be sure to pay off the cc before the balance transfer promotion ends.

Billy

you are over thinking as long as you are under 30% it does not matter if you use 1% or 29% from a practical standpoint. Having to much available can be a problem when you go for a car or home loan. You student loan has no affect unless you fail to pay on your credit or your ratios.

Calvin C

visit dave ramsey.com to learn from others expensive hard lessons b4 u get hard lessons. Learn to use cash b4 u become a debt slave.

Rob

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