MSN has posted 9 big credit card myths. I figured I’d write a post about it because I’ve heard many of these rumors before and thought they were wrong.
1: Your credit card account isn’t opened until you activate it using the issuer’s toll-free number.…
Sorry, but the ding to your credit scores — typically 5 points or less — happens as soon as the issuer pulls your credit reports, which is usually within seconds of receiving your application. The account shows up as active on your credit reports shortly after the card is approved.
Myth No. 2: You can stop unsolicited credit card offers by sending them back in the postage-paid envelopes.
Myth No. 7: High credit card limits are bad for your credit scores.
I guess I should add that I did try to send back the offers in the pre-paid envelopes. Although, I read later, and perhaps it is another myth, that some credit card offerers measure their hit rate by how many replies of any kind they receive.
High limits don’t hurt your score but it will cause certain lenders who “ping” you to take a another look. High limits are essentially money you can spend whether you have a history of spending to those levels or not, much less a history of repaying if you do spend on the card. With this in mind, folks like mortgage companies can and will use this as an excuse to bump your rate up indicating you are a “higher risk” to them. Reality, though being able to tout a “No-limit” card is fun and could allow you to make a huge purchase, they are going to bite you more than help you out.