topic Re: New Card application during temporary score boost? in Credit Cards

New Card application during temporary score boost?

Anonymous — Sat, 02 Feb 2019 14:54:56 GMT

This is my first time posting so please let me know if I miss important background info.

I recently consolodated my credit card debt (15k) into a discover personal loan and noticed today that the payoffs to all of my cards have posted on my report. The personal loan is not showing up yet, resulting in a credit score boost to 760. Long story short I have a plan to pay off the personal loan in 2 years and would like a card to put my daily expenses on and PIF each month than earns decent cash back or rewards. Should I use this temporary score boost to apply for a new rewards card? My existing cards all have some rewards, but it seems like the BofA Cash rewards card would be more beneficial.

My current cards include:

Discover IT 17.99%, $6,500 limit

PNC Points 15.99%, $8,000 limit

Capital One QuickSilver 22.24%, $2,250 limit

3 department store cards that I am just keeping open for perks and credit age.

Thanks in advance for your help!

Re: New Card application during temporary score boost?

Priory_Man — Sat, 02 Feb 2019 15:00:40 GMT

TBH, No.
I would pick one of the 3 cards you have that has the most benefit to you and use it. Or PC one of them into a more beneficial card.
If you app for a new card you are going to ping your score with a hard pull, drop your AAoA and then the loan will hit dropping you again.

Re: New Card application during temporary score boost?

HeavenOhio — Sat, 02 Feb 2019 15:21:32 GMT

Welcome, @Anonymous.

From the perspective of your credit report, scores, and optimization of rewards, I think it definitely makes sense to apply for a card. The more important part is budgetary. You definitely want to follow through on your commitment to pay in full.

Re: New Card application during temporary score boost?

Anonymous — Sat, 02 Feb 2019 16:09:46 GMT

@Anonymous wrote:

Discover IT 17.99%, $6,500 limit
PNC Points 15.99%, $8,000 limit
Capital One QuickSilver 22.24%, $2,250 limit

I'm assuming those are interest rates? If so, give those a couple of months of 0 balance/PiF to restore your grace period then start using one of them.

Personally, I would only apply for a new card if I had addressed what lead to the accumulation of two years of debt.

Re: New Card application during temporary score boost?

Anonymous — Sat, 02 Feb 2019 18:18:07 GMT

IT is a decent category reward card, QS is a decent baseline non-cat reward card. They should cover you well right now.

Now, if you have particular large spending category you want to get better reward for, do let us know what is your monthly/annual spending break down.

@Anonymous wrote:
This is my first time posting so please let me know if I miss important background info.
I recently consolodated my credit card debt (15k) into a discover personal loan and noticed today that the payoffs to all of my cards have posted on my report. The personal loan is not showing up yet, resulting in a credit score boost to 760. Long story short I have a plan to pay off the personal loan in 2 years and would like a card to put my daily expenses on and PIF each month than earns decent cash back or rewards. Should I use this temporary score boost to apply for a new rewards card? My existing cards all have some rewards, but it seems like the BofA Cash rewards card would be more beneficial.
My current cards include:
Discover IT 17.99%, $6,500 limit
PNC Points 15.99%, $8,000 limit
Capital One QuickSilver 22.24%, $2,250 limit
3 department store cards that I am just keeping open for perks and credit age.
Thanks in advance for your help!

Re: New Card application during temporary score boost?

Anonymous — Sat, 02 Feb 2019 19:36:45 GMT

@Ally100500: welcome to MF!
As to your question, it depends. If you have adequate willpower to control your spending and you know that you can handle another card and PIF as you said, then I believe taking advantage of the increased score to be able to get a helpful card at a better rate makes sense.
Why have to fight to get to the score for years to get the card when you can take advantage of the opportunity now?
And I wouldn’t worry about a ding to your score from 1 app and 1 account either, because what’s the point of having a higher score if you don’t use it at appropriate times anyway? Right now is your opportunity to use a higher score and get a better card at a better interest-rate. If you use that card wisely it will also help you to increase your score. (It can also help bury you if you let it by mismanagement.)
And I’m sure that you’ll receive much more advice and we look forward to your future posts.

Re: New Card application during temporary score boost?

AverageJoesCredit — Sat, 02 Feb 2019 18:54:16 GMT

If you reports are showing 0 across the boards in debt and the pl hasnt shown up yet, i would take advantage of that small window for 1 card. Your score is going to take a hit anyway when the loan reports. One card app isnt the end of the world

Re: New Card application during temporary score boost?

Anonymous — Sat, 02 Feb 2019 20:26:15 GMT

Congratulations on your personal loan from Disco, OP 👏🏾

Here is my perspective. The TLs mentioned are just over $15K. The previous debt burden is nearly equal to that. Aside from the store cards, I'm assuming you were near max on some or all of the TLs mentioned...might be a bad assumption. This, along with the personal loan bailout appears to be signs of financial distress. There are always other circumstances, but solely basing this on the info provided.

If all or any of the above is true, I see no value in adding another TL, right now. I'd focus on the accounts that exist, and to echo the other poster, PC your existing accounts to meet needs. You're considering a B of A Cash Rewards which I believe is a choice category 3% card. But you already have a Capital One 1.5% every transaction card. As well as a Disco 5% category card. Understandably it's not a choice category card.

IMO, while the new account will only be a temporary drop in score, I'd focus on getting that loan balance down, and working on the discipline necessary to avoid a future debt consolidation - or worst.

Wishing you the best of luck!

Re: New Card application during temporary score boost?

Anonymous — Sat, 02 Feb 2019 20:33:38 GMT

@Anonymous wrote:
... Should I use this temporary score boost to apply for a new rewards card?

Yes. Maybe 2 or 3.

Re: New Card application during temporary score boost?

Priory_Man — Sat, 02 Feb 2019 21:17:40 GMT

@Anonymous wrote:
Congratulations on your personal loan from Disco, OP 👏🏾

Here is my perspective. The TLs mentioned are just over $15K. The previous debt burden is nearly equal to that. Aside from the store cards, I'm assuming you were near max on some or all of the TLs mentioned...might be a bad assumption. This, along with the personal loan bailout appears to be signs of financial distress. There are always other circumstances, but solely basing this on the info provided.

If all or any of the above is true, I see no value in adding another TL, right now. I'd focus on the accounts that exist, and to echo the other poster, PC your existing accounts to meet needs. You're considering a B of A Cash Rewards which I believe is a choice category 3% card. But you already have a Capital One 1.5% every transaction card. As well as a Disco 5% category card. Understandably it's not a choice category card.

IMO, while the new account will only be a temporary drop in score, I'd focus on getting that loan balance down, and working on the discipline necessary to avoid a future debt consolidation - or worst.

Wishing you the best of luck!

This was kind of my concern too.

The loan amount borrowed was similar to the TL the OP has, adding another card if they are struggling with debt would potentially only add to that.

Life happens and we can all run up debt if the need is there, but adding temptation with a 4th useable card this early on may not be the best thing.

Excuse me OP if you feel I am been judgemental as I do not mean to be, but, my own personal experience would stop me from adding any more TL's at this time until I was sure that I had things under control.

Re: New Card application during temporary score boost?

Anonymous — Sat, 02 Feb 2019 21:28:16 GMT

Wow! Thank you for all the consideration.

Yes, I was nearly maxed out on all cards prior to the personal loan. A few years back I took a 6k pay cut for job closer to home. At the time I thought I could scale back my spending, but instead had some unexpected expense creep up in addition to not actually being that great at decreasing my over all spend. About 6 months ago I received a sizable raise and make 4k more than I did before I took the pay cut. The gamble paid off in the long run, but I am left with the 15k in debt. I refinanced with the personal loan to force myself to pay it all off and will be sending in a 5k payment once my tax return arrives. If I am able to to that this year and next I will be paid off in what seems like a reasonable amount of time.

I do have decent cash back on the IT and the Quicksilver but have been fascinated reading through threads here. I am so impressed with the strategic use of category cards to maximize cash back. I really don't need any more cards, but thought this might be the time to really put together a plan into action with the temporary score bump.

Re: New Card application during temporary score boost?

Priory_Man — Sat, 02 Feb 2019 21:53:48 GMT

@Anonymous wrote:
Wow! Thank you for all the consideration.

Yes, I was nearly maxed out on all cards prior to the personal loan. A few years back I took a6kk pay cut for job closer to home. At the time I thought I could scale back my spending, but instead had some unexpected expense creep up in addition to not actually being that great at decreasing my over all spend. About 6 months ago I received a sizable raise and make4kk more than I did before I took the pay cut. The gamble paid off in the long run, but I am left with the15kk in debt. I refinanced with the personal loan to force myself to pay it all off and will be sending in a5kk payment once my tax return arrives. If I am able to to that this year and next I will be paid off in what seems like a reasonable amount of time.

I do have decent cash back on the IT and the Quicksilver but have been fascinated reading through threads here. I am so impressed with the strategic use of category cards to maximize cash back. I really don't need any more cards, but thought this might be the time to really put together a plan into action with the temporary score bump.

First off, congrats on getting things back on track, and your plan to help you pay down your loan is a good one.

With what you have stated above then maybe appingg for something else may be a good idea, though I am not sure your score will take a huge hit when your loan posts, maybe 10 points and if 750 is as low as you are going to go you will still be approved for most cards.

Adding a new TL will drop them a little too, but with the added SL it could also potentially raise them too.

BoA rewards very well maybe a good fit as it does include options to maximize it's 3% for daily living.

Please make sure that you do stick to your budget plan and best of luck with everything.