Credit cards can be a game changer when it comes to building credit history and reaping rewards. And when the urge to apply for multiple cards strikes, a natural question arises: should you apply for multiple credit cards at once? Redditors have been on this journey before, and they have shared their experiences and advice on this topic. So let's dive into the world of multiple credit card applications and see if it's the right strategy for you.
Applying For Multiple Credit Cards At Once Reddit Table of Contents
Understanding the Impact of Multiple Applications
Applying for multiple credit cards at once can potentially have negative consequences on your credit score. Here's why:
- Hard Inquiries: When you apply for a credit card, the issuer typically does a hard inquiry on your credit report. This can temporarily lower your credit score by a few points. So, if you apply for multiple cards at once, you can expect a higher number of hard inquiries, which could multiply the negative impact on your score.
- New Accounts: Opening new accounts in a short period of time can further impact your score. Lenders may perceive you as a risk, making it difficult for you to secure other types of loans or lines of credit.
Considering the 5/24 Rule
Before applying for multiple credit cards, you should take note of the 5/24 rule, which refers to a policy that some card issuers - like Chase - have in place. According to this rule, if you've opened five or more personal credit cards across all banks in the past 24 months, you'll likely be denied for any new Chase card applications.
While the 5/24 rule doesn't apply to all credit card issuers, it's essential to be aware of it when applying for multiple cards at once. You don't want all your efforts to go to waste by hitting this limitation.
Spacing Out Applications
It's usually a better idea to space out credit card applications, rather than applying for multiple cards at once. This approach can have several benefits:
- Reduced impact on credit score: Spacing out applications will give your credit score time to recover between hard inquiries and new account openings.
- Better approval odds: By waiting, you may increase your chances of approval for credit cards with attractive rewards or low interest rates.
- Sign-up bonuses: Many credit cards offer sign-up bonuses if you meet certain spending requirements within a specified timeframe. By spacing out applications, you can focus on maximizing the rewards for each card before opening a new one.
Applying For Multiple Credit Cards At Once Reddit Example:
Imagine you want to apply for three new credit cards: one for travel rewards, one for cash back, and one for balance transfers. Instead of applying for all three at once, you could follow this timeline:
1. Apply for the travel rewards card first and spend the next three months focusing on meeting the sign-up bonus requirements.
2. Apply for the cash back card and repeat the process to maximize its rewards.
3. Finally, apply for the balance transfer card. By this time, your credit score may have recovered enough to secure a better offer, and you can focus on paying down your balance.
Applying for multiple credit cards at once may sound appealing, but it's important to weigh the potential impact on your credit score and approval odds. Spacing out your applications and focusing on maximizing rewards for each card can help you build your credit history, reap great benefits, and stay within the guidelines of certain issuer limitations. Don't forget to share this article with friends who might find it helpful, and be sure to explore other Flik Eco guides for more personal finance and investment tips.
