Will applying for a credit card hurt my credit score?
- The short answer is no. However, having several inquiries in a short period of time can be a red flag. Here’s a quote from Experian on the matter: “Sometimes opening several credit accounts in a short period of time represents a greater risk to lenders—especially if there isn’t also an established credit history on record. This can be a sign of trying to overspend.” So, if you’re planning to have your credit pulled to buy a house or another major purchase, you might wait to apply for a credit card. Otherwise, the occasional credit card inquiry won’t negatively affect your credit.
Does having more than one credit card hurt my credit score?
- Actually, it can help your credit score. A portion of your score is based on the percentage of available credit that you’re using. So, if you have one credit card with a $5,000 limit and you’re using $4,000 of it every month, this signals a risk to the creditor. But, if you have three credit cards with $5,000 limits ($15,000 total) and you’re only use $4,000 of your available credit, you look like a lower risk.
Can I get good value out of credit card rewards if I can’t pay off my credit card each month?
- You can average as much as 10% on your purchases back in the form of credit card rewards on a single credit card. However, this doesn’t compare to the amount of interest you’re likely to pay if you carry a balance on your credit card. Bottom line, credit card rewards are quite valuable, but only if you’re paying off your credit card each month.
How long should I keep a credit card before cancelling it?
- Credit agencies view open credit lines with long histories positively because it shows continuity and dependability. So, if you have a credit card that you’ve had for a long time with no annual fee, keep it. If you have a credit card that has exceeded its usefulness and has an annual fee, cancel it. Many credit card rewards enthusiasts cancel cards they aren’t using before the next annual fee comes due. Just make sure you won’t lose your rewards before cancelling.
How do I check my credit report?
- The federal government gives you access to a free report every 12 months from each of the three major credit bureaus: Experian, Equifax, and TransUnion. The official site for requesting these is annualcreditreport.com. You can get a free report from all three at once to compare them or get one at a time and spread them out over the course of a year.
Should another adult in my household apply for a credit card?
- This can be a lucrative way to double up on rewards, either getting two of the same card to double up on points or getting two complementary cards (maybe one airline and one hotel for example). If you get the same card, most banks will let you transfer points to someone who shares your address. Warning: If you sign up for two cards at the same time, you’ve got two sign up bonuses to hit at the same time, which may be more spending than you want. If you can’t reach the spending requirements for two sign up bonuses at once, consider staggering your applications by a few months.
Is there a risk I won’t be able to use my points?
- Getting a credit card with multiple ways to redeem them is valuable. Not only does it help you make the best choice among several options, but it also helps ensure you don’t get stuck in a situation where you can’t redeem your points the week you wanted to travel. For instance, if you got a Marriott Rewards Premier card and wanted to visit Walt Disney World the week between Christmas and New Year’s, but you waited until Thanksgiving to book it, you might not find any hotel availability. But, if you get a credit card that also allows you to use it for airfare or redeem points for cash, you’ve got some back up plans you can rely on.
If I have to cancel my trip, are my points refundable?
- With the airlines, you’re usually subject to a fee of around $150 to cancel and get points back unless you have status with that airline in which case it may get waived. Southwest is the exception where there are no change fees. With hotels, your points reservation usually falls into the refundable category so you can cancel with more than 24 hours notice.
How long does the credit card application take before you find out if you’re approved?
- Usually you find out instantly if you’re approved. Sometimes they need to take a closer look and will let you know in a day or two.
Is there any disadvantage to applying for multiple credit cards at one time?
- We try to space out our applications by six months, but I’ve read many reports of people who apply for two credit cards at the same time because the inquiries won’t show up quickly enough for each bank to see the other. It’s probably not very risky based on the number of people that do it, but we take a more conservative approach ourselves.