AboutGina Boykin Expertise Financial planning, debt management & credit cards, and money-saving tips for adults and teens. Saving vehicles such as CDs, treasuries, bonds, and money-market funds. I provide honest, objective and relevant information to help you made the best decision for your money.
Experience Over 10 years of combined experience in accounting, audit, investing, entrepreneurship, real estate.
I am the CEO of Atlanta Y.E.S., a nonprofit organization dedicated to financial literacy for youth.
Education/Credentials B.S. Accounting, 10 years of experience in accounting, audit, and investing
Question I did not make the best choices when I was 18 and first got a credit card and racked up about 2500 dollars on my Mastercard. My available credit line is only 200 dollars. I always pay on time and pay a little more than the minimum. I will be getting married soon and I am paying for most of the wedding expenses with the money I have been saving up but I may need to charge some of it to a credit card. Would it be better to request a increase on my credit limit or to apply for a different credit card? Would increasing my credit limit hurt my credit score at all? Thanks so much for your help!
Answer Getting a new card will temporarily hurt your score, because part of your score is determined by the age of your credit. New credit hurts your score, while having accounts open for several years helps your score.
Increasing your credit limit would actually be better for your score. Currently, you are hurting your score because you owe too much based on your limit. Part of your score is based on the amount you owe compared to your available credit. Any time you owe more than 1/2 of your limit, your score drops.
However, if you plan to increase your limit, then charge it to the max (or near max) again, your score will go back down, and it may go down even more. At that point, not only will you still owe more than 1/2 of your limit, but overall you owe more.
A great website to visit is www.creditkarma.com. From this website you can get your credit score (for FREE) and you can simulate your score - meaning you can put in different actions, like opening a new card, paying it down, or increasing your limit, and it will tell you the effect your score will have.
As a side note, I would also suggest finding ways to get the wedding costs down to an amount that you can pay for without using credit, or if possible, changing the date so that you can save up more. If you are only able to afford a little above the minimum payment now, you will most likely only be able to afford the mininum after the wedding...This is a recipe for disaster. You want to be able to start off your new life, with your new mate, afresh, without the heavy burdens of debt. If there is ANY possible way you can do this, I would make every effort.
