Why it’s a bad idea to apply for multiple credit cards at once
There may be times when you may be tempted to take out more than one credit card at the same time. There may be several cards offering great signup bonuses that you want to take advantage of. Or you may just want to get more purchasing power. As tempting as it may be to fill out multiple credit card applications, here’s why you’re better off applying for new cards one at a time, and ideally space the applications by at least 90 days.
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1. It could lower your credit score
New credit accounts are a factor in calculating your credit score. Too many new accounts opened at once could hurt your score. Plus, every time you apply for a credit card, it counts as a serious investigation of your credit report. One serious request usually results in a 5-10 point drop in your credit score, and that’s not that important in and of itself. But if you’re applying for, say, three cards at a time, it’s a much bigger hit when you add up those points.
2. It could open the door to too much spending
The more credit cards you get, the higher your total spending limit. And while a more generous spending limit might be nice in theory, it can also open the door to overspending.
If you open multiple credit cards at once to chase signup bonuses, you might not be able to pay all of your balances on time. It could mean accumulating interest on your debt, making your purchases more expensive. Plus, having too high a total balance on your credit cards could lower your credit score more than just a few inquiries.
3. It could be a red flag if you apply to borrow money or rent a house.
You can apply for a few credit cards at a time while still managing to maintain a high credit rating. Suppose a series of serious investigations lower your score by 20 points, but you got a score of 825 to begin with. That still leaves you with an 805, which is considered excellent.
That said, anyone who checks your credit report may find it alarming that you’ve suddenly added so many credit cards. If you are applying to rent an apartment, a landlord may see this activity and wonder why you suddenly need access to more credit – and possibly deny you a rental. The same could happen if you apply for a loan.
There is nothing wrong with slowly building a credit card collection. But be careful not to apply too many at the same time. It could really backfire on you.