Dear
Dr. Don, I am trying to improve my credit rating and get
better credit cards. I have had two credit cards for seven to eight
years. They are high interest (18 percent to 24 percent). I have
recently received a third credit card at 15-percent interest. When
applying for credit cards with better terms, should I drop the old
cards so that I don't have too much available credit, or should
I keep them because of the age of the accounts? -- David Debt-Terms
- advertisement -
Dear
David, Keep the old cards. The age of the accounts helps
your credit score. So does reducing the ratio of credit used to credit
available, but continuing to apply for additional credit cards can
actually hurt your credit score.
Odds are you don't need better
credit cards; you just need your existing credit cards to be at
a better interest rate. Improve your credit score and you'll have
the leverage you need to negotiate with the credit card companies
to get a lower interest rate. Then, if they balk at reducing your
interest rate, you can vote with your feet and open a new account
with another firm. Start out by paying down your balances over time.
You'll be amazed at how this will improve your credit score.
