If I get another credit card, will it hurt my credit score?

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By the numbers

93%

Canadians with at least one credit card.

32%

Canadians who have a credit card balance beyond the bill cycle.

Source: 2021 CANADIAN PAYMENT TRENDS AND METHODS REPORT

It seems like there is a credit card for everything these days. Whether you want cash back, travel points, or just a little more leeway, it’s easy to think that you should have a card for every occasion.

But could getting a second or third credit card impact your credit score?

Andre Bolduc, Senior Vice President of BDO Canada based in Ottawa, said a credit application always affects your score, but it’s usually a short-term success.

So while applying for a credit card isn’t a big deal, asking for several and being turned down will definitely have a negative impact on your credit score, he said.

But the real danger to your score isn’t in applying for a new credit card, but in how you use it. Don’t rack up a bunch of purchases and then just make minimum payments, Bolduc said, or you’re heading into dangerous waters.

About a third of your credit score is based on how you use that credit, Bolduc said. Ideally, you want to use less than 30 percent of your available credit, he said.

“If you use a high percentage of what is available to you, it negatively impacts your score. “

But used responsibly, extra credit can actually improve your score. For example, if you increase your line of credit and keep the usage percentage below 30%.

For people trying to rebuild their credit rating, Bolduc recommends having two low limit credit cards, paying them off every month, and slowly recovering their rating over a few years.

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