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Having Extra Store Cards Makes You Less Creditworthy

By Karen Anderson
Published: Monday, September 7th, 2009

One of the basic reasons why many people still prefer to spend using their credit card is because of one word. This word is convenience. Consumers find spending by the credit far more convenient than spending on cash. One thing is because they are able to spend on consumption goods without greenback limitations. Another thing is because many commercial establishments have adopted this credit norm. Looking at the facts show us that majority of Americans actually prefer credit rather than cash. Whether you will go to the grocery to fill up the fridge, you can use your credit. This fact is also true even to going to the convenience store and refreshing yourself, or paying your mortgages. However, credit spending also has one major disadvantage for American consumers. This disadvantage is called overspending. Many a consumer even requires credit report tips whenever they feel the after effects of overspending.

Overspending problems for consumers is even worsened by the proliferation of store credit cards. Many commercial establishments are now offering different kinds of store credit cards. These types of cards often bring additional credit to your credit account. However, many consumers still choose to avail of such cards. This is because these cards often have incredible discounts. Aside from convenience, many consumers choose to buy additional credit cards because they want to avail as much as possible all the available discounts. This practice often leads to excessive spending and lower credit rates. In addition, having too many credit cards may also lead agencies to rate you as a less creditworthy consumer. This is the reason why cutting your store cards is actually one of the best credit report tips available.

Remember that one of the most common measures of creditworthiness is your propensity to accumulate a huge amount of debt. The interest rate that you must pay when paying this debt is also plays a major role to credit ratings. When you have a lot of store credit cards, you are likely to have many credit accounts. This leads to a larger propensity to accumulate debt. In addition, store cards usually bring with them relatively higher interest rates. All these factors would naturally cause your credit rating to fall. This would mean financial instability on your part. This situation would therefore require following effective credit report tips. One of which is cutting your store cards.

It is a very good thing when your store cards do not have an outstanding balance. In this case, it is very simple to cancel out your store cards. Cancelling this in such a situation would not cost you a great amount. However, when you do have an outstanding balance on this account, then it would be best for you to consolidate your debt. It is far cheaper for you to pay this outstanding debt at 12% when consolidated in your personal loan, as compared to paying almost 20% that most commercial establishments require. Following these simple credit report tips may mean the difference on saving your credit account.

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