What the Heck is The Larry Rule
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Understanding "The Larry Rule": Credit Card Insights
Summary
Larry Lindsey might not be a household name, but his contribution to personal finance is noteworthy. Currently serving as President Bush's chief domestic economic advisor and a former Federal Reserve Board Governor, Lindsey's claim to fame comes from an unexpected incident at Toys 'R Us, leading to what’s now known as "The Larry Rule."
The Story Behind The Larry Rule
In 1996, during his tenure as a Federal Reserve Board Governor, Larry Lindsey discovered a flaw in the credit scoring system. Despite his impeccable financial standing, Lindsey was denied a store credit card at Toys 'R Us due to "too many recent inquiries."
His experiment involved accepting every store credit card offer to demonstrate that applying for multiple retail charge accounts could harm one’s credit score and hinder approval for significant credit cards like Visa or Mastercard.
To Apply or Not to Apply?
While "The Larry Rule" highlights an important truth?"applying for numerous credit accounts can signal financial distress?"it raises essential questions about necessity versus convenience. Retail clerks often receive incentives for driving credit card applications, which can negatively impact your credit score if you're not careful.
Considerations Before Applying
1. Evaluate the Need: Do you genuinely need the store card, or are you succumbing to pressure? Consider the implications on your credit score.
2. Weigh Discounts Against Credit Impact: Is the in-store discount worth the potential drop in your credit score due to a new inquiry?
3. Future Credit Needs: If you anticipate needing a loan for a car, home, or another significant purpose, rethink the retail application to avoid jeopardizing your financial future.
Making Smart Credit Choices
It's wise to research credit card options thoroughly before applying. Opt for one or two dependable cards you intend to keep long-term. This strategic approach will set you on the path to a sound financial future.
By understanding the principles of "The Larry Rule," you can make informed decisions and maintain a healthy credit profile. For more insights and options, consider exploring directories like http://www.cc-yes.com.
Best wishes for your financial journey,
James Marshall
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