I'm tempted to take out a new credit card in order to get 40,000 frequent flyer miles. Would that adversely affect my credit score?
- My Equifax score is about 750
- 6 existing credit cards, 2 existing retail cards
- debt to credit ratio 2%
- total credit limit $120,000
- average account age 8 years
- no late payments, no collections, no negative information
- 3 inquiries on record
Second question: Would it make sense for me to close one of my credit cards that has only been open 4 months? Would that increase my average account age and help me boost my score? Note that closing that card would decrease my total credit limit a negligible amount.
Thanks, oh wise ones, for your advice!
It shouldn't hurt your score too much (assuming most of your current cards are closer to the 8 year mark rather than newly opened). If you aren't planning to get a mortgage or a car loan in the next year, I think you'll be OK.
As for closing the 4 month old card, even if you close it, it reports for 10 years, so it won't change your AAoA to close it!
Question one -
It will drop your score between 5-10 points temporarily. Your current score is high enough that it won't matter unless you intend to apply for a mortgage in the next year. There are plenty of people (like me) who regularly apply for cards just to get the bonuses. See FlyerTalk for more detailed discussion about "churning."
Question two -
The closed card will likely say on your report, contributing to average age of account, for ten years after being closed. An AAoA of 8 years is already pretty good.