Lindsay Smith

People open credit cards for a number of reasons. A frequent traveler may decide it's worth it to open a credit card that offers reward miles, for instance. Or, a person with an average credit score may try opening a new card to raise his or her credit limit. But no matter why you're opening a new card, it's not something that should be done without a little forethought.

Building good credit is crucial for things like applying for jobs, loans or apartments (you know, the little things in life), so you never want to do anything that could affect your score negatively. Here are a few do's and don'ts to keep in mind when opening a new credit card:

Do Open One if You Want to Raise Your Limit

The amount of credit you use is one of the factors that can affect your overall score. So, if you have a $2,000 credit limit on your current card, and you're using $1,500, your credit usage is very high, which could cause your score to drop. Some people open new credit cards to raise their limit, thus lowering their usage. Open a new card with another limit of $2,000 and your total usage is all of a sudden much lower – $1,500 out of $4,000, or about 38%.

Don't Open Multiple Cards at Once

You may get excited when you start seeing all of the amazing rewards cards out there, but it's important that you don't overdo it and start applying for multiple cards. Every time you fill out a credit card application, the company places a hard inquiry on your account, which dings your score a bit. One inquiry isn't a big deal, but more than one can start making a noticeable difference. If you want a few new cards, make sure you apply for them one at a time.

Do Calculate Your Approval Odds

Before applying for a new credit card, it's a good idea to do some research and figure out which cards you're most likely to be approved for – not necessarily the one you most want. Believe it or not, being approved for a new credit card often requires already having good credit built up (it's a little counterintuitive), but there are some options out there for young people who don't have much credit to speak of. Do some comparison shopping to figure out which cards will be best for you based on your credit score and history.

Don't Open a Credit Card with Fees

Of all the do's and don'ts of opening a new credit card, this should be the most obvious: Say no to annual fees. There are so many credit cards with no fees that you should easily be able to find one that suits you. You should also look for options with low interest rates.

Do Check Out Online Reviews

If you're an online shopper, you know that you never buy something big online without checking out the reviews first. The same is true for credit cards. Narrow your options down to a few prospective ones, then check out some reviews online to see what people like and don't like about them. That first-hand information can be really valuable when making the decision.

Don't Lose Control

Even if you already have a credit card or two, a new one can be just exciting enough to make you feel comfortable spending a little more than you normally would. Resist that impulse. Make sure you're keeping your spending under control – just because your credit limit is higher doesn't mean you should get into more debt than you can easily pay off. And don't forget: Multiple credit cards means having to keep track of more statements. Consider setting up automatic payments so you don't accidentally forget one month.



About The Author

Lindsay Smith is a Chicago-based freelance writer who uses her deadline-oriented writing skills for clients like Apartment Guide,, Womensforum Media Group and Brafton.