Credit is a good thing – if you ask the experts in the credit industry. Credit card companies begin luring in new customers with the promise that building a credit history will help their financial future. It may be beneficial to have some credit, but there comes a point when the amount of credit hurts more than it helps.
Consumers that have a large amount of credit available become a risk to potential lenders. It is important for you to know just how much credit is enough so you avoid reaching the point where you have too much credit.
Credit lines should not be more than 25% of the income that a household produces. If the credit expense is any higher, it may be time to start reducing the amount of available credit
Answer the following questions to discover if the amount of credit you are carrying today is too much credit.
The more credit you have, the more possibility there is for debt problems in the future. Companies will review the available credit when considering new credit ventures or other business ventures. Some companies will consider a high credit amount as a positive, while others may see the potential for troubles.
Determining how much credit is too much credit is an individual decision. You must look at all of the different factors and find the balance that works best for your own needs. Answering a few questions will help you begin to determine the level of credit that will meet your needs without putting a dent in your credit rating in the future.