(Video) Sunday Reader Questions: What Is The Best Way To Apply For Multiple Credit Card Promotions?

Mar 25, 2012

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We all want to get in on as many lucrative credit card bonuses as possible, but in order to do so, you’ve got to be smart and strategic about your applications. You need to understand how multiple credit inquiries affect your FICO score, and how each major bank handles multiple credit card applications.

On this point, TPG reader Nick asks:

I was wondering if there are any tradeoffs to “credit card promotion hopping.”  I have good credit, so I think I could take advantage of this, but I do know that multiple applications can hurt your overall credit.  So my question is what is an optimal frequency for switching credit cards to take advantage of all the promotions they offer?

Great question, Nick, and for the quick answer, you can just watch this video.

For more detailed information on how applying for multiple credit cards affects your credit, and the policies of the three major credit card banks are on multiple applications, read on below.

Credit Inquiries

In its own words, FICO says “opening several credit accounts in a short period of time represents greater credit risk.” That’s because you’re applying for multiple lines of new credit rather than submitting several inquiries for a single new line, such as a mortgage.

So how much will credit inquiries affect your score? Generally a short term 2-5 point hit.This handy page on the FICO website shows how your credit score is calculated. In general, the impact on your score from multiple inquiries is small—and remember that new credit counts only 10% toward determining your overall FICO score. So as long as you are strong in the other areas like payment history and amounts owed, you should be fine to apply for new cards. That being said, I personally wouldn’t recommend applying for multiple cards from the same bank (ex. American Express, Chase, Citi) within the same month—and ideally you should space your applications at least three months apart.

Here is a handy rundown of the time frames for each of the major banks behind points-earning cards:

Amex is a little more flexible than the other two banks because they have two types of cards: charge cards (Platinum, Premier Rewards Gold Card from American Express , Gold and Green), and credit cards (Blue Sky, Gold Delta SkyMiles® Credit Card from American Express and Starwood Preferred Guest® Credit Card from American Express). It is absolutely possible to have multiple cards—I know people who carry Platinum, Gold and Delta cards, for instance. As with all card companies, however, American Express uses a lot of factors to decide how many cards you can have at one time, and there are ways to work within the system so you get the ones that make the most sense for your points strategy.

Just to note: if you have a charge card, your available credit reported from that card will only be the highest amount your balance has ever gotten up to. This can have a temporary negative effect on your credit if you charge $10,000 and once your statement closes, it looks like you have $10,000 in available credit and you are using up 100% of it until the bill is reported as paid in full. So, with charge cards, it may benefit you to have a huge month and pay the bill off so it reports your available credit as a large number, and then continue to pay your bill off monthly then apply for a new card.

Chase usually mandates that credit card applications come at least one month apart and even then you might get declined at first. However, in my experience, Chase has been very flexible with reconsiderations when you call them and there’s a handy trick where you can get them to swap or split your lines of credit. So, say you have The Hyatt Credit Card that you’re not using much, but you want the Chase Sapphire Preferred  (one of my personal favorites – and the 50,000 bonus is ending soon so I recommend applying ASAP if you’re interested in this card). If you get declined for the new card, you can call the reconsideration line and ask if it would make a difference to transfer your credit line to the new Sapphire Preferred card, or split your credit on your old card into two lines of credit and get the new card. It’s a bit tricky, but worth the extra effort…especially for 50,000 Ultimate Rewards points!

Citibank has a six-month limit between applications, meaning you shouldn’t apply for more than one card within a six-month period. However, you can usually apply for two cards on the same day without raising any red flags. I recently did that when I applied for a Mastercard and an American Express card that earned me 75,000 American Airlines miles each, and both were approved with identical credit limits.

The US Airways credit card can be “churned” may times.

Very flexible on getting the same card and bonus, like the Alaska Airlines Visa Signature credit card and Virgin Atlantic cards, over and over again.

I would never advise anyone with less than healthy credit to apply for multiple cards at once. For one thing, you probably won’t get approved. For another, you should first concentrate on fixing your credit so that you can then take full advantage of the lucrative credit card deals that are out there. For those with balances, I recommend the Chase Slate card with 0% interest and no balance transfer fees. That said, don’t be afraid to apply for multiple cards at once your credit is good since credit inquiries have a minimal effect on healthy credit reports, and if you stay within each major bank’s guidelines for application timeframes, you can really start raking in points. Heck, I got over 600k last year from 8 apps and my credit score is stronger than ever!


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