Credit card application timing advice

[Anonymous]

When you get a new account 4 things happen possibly.

1. If you have a revolver under 12 months of age, then you won’t get a new account penalty, if you don’t then you will. So a lot of people when they get this card and see the new account penalty get scared and think if they get another card they’re gonna get another penalty like that, but they don’t because you don’t get those points back until your youngest revolver turns 12 months of age. So they’re not there to lose and they’re not there to help you get a higher SL or a lower APR.

So six months down the line when they get another card, they feel good because you don’t see as big of a drop, if any, but the reality is, you’re still under that 10-30 point penalty and now you extended it another six months. And thanks to that, you got lower SLs and APRs than you could have, had you just waited another six months for those points.

2. AAoA- Every time you add a new account it lowers this metric. The metric is an average of the opening dates of all your accounts. So the older these are, the higher the AAoA. So back to my previous example, would you rather be averaging in five accounts with 2 1/2 years age or one that‘s 2.5 years old, one that’s 2 years, one that’s 1.5 years, one that’s 1 year, 1 that’s 6 months and 1 that’s 0 months?

Which one do you think will have a better effect on your AAoA? How can you recover when you keep lowering your AAoA every 6 months? If you have five 2.5 year accounts, that means you’ve got some weight in your average pulling it towards 2.5. But if all these dates that are being averaged are staggered every six months, you don’t have a counterbalance.

Think of 10 years from now, would you rather have 10 accounts that are 10 years old or would you rather have 10 accounts ranging from 5 to 10 years old? Which one do you think would be better for your AAoA?

And I’m not advocating going and getting 10 accounts but imagine 5 one year and 5 twelve months later compared to every six months over the past 10 years, calculate the difference.

Credit is a marathon on not a sprint so you gotta do what you gotta do to plan for the future and then let age do its thing. If instead you continually add accounts you’re gonna continually keep your AAoA low and also keep your score suppressed by continually being under new account penalty and by continuing to keep your AAoA low.

And like I said new accounts and inquiries are anathema to credit based insurance scores. You don’t want to keep getting new accounts and inquiries unless you don’t mind paying higher insurance rates or unless you are in one of the four states where it’s prohibited.

In my humble opinion get what you need and can according to your profile, then lock yourself in the garden and once you have two years with no inquiries or new accounts, credit based insurance scores will be a lot better and ficos will be better and every year they will get better because you will have all those accounts getting older, not staggered aged accounts that end up giving you half of what your AAoA could have been had you gotten them earlier, plus you won't continually be under the new account penalty.

3. AAoRA- Same principle just doesn't include loans.

4. Obviously there may be a small point loss from inquiry which is returned 365 days later.

Jmho 

[juanjunior99]

I want to target the chase...

the cards i want are chase freedom and chase sapphire preferred, in my signature you can see my details. I was thinking apply when my AoYA touch 6M, but really I am not sure.. Reading yours advice I get a better idea of when would be the best time to apply. In general, do you think that applying 6 months after opening my last account is a very short time? or do you think I have a chance?

[juanjunior99]

How much cards i can apply in a year with a good rate approval and good SL? is good idean wait 1 year and apply for 5 or 4 or 3 or 2 or 1 cards after 1 year mark?

[ccquest]

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@juanjunior99 wrote:

How much cards i can apply in a year with a good rate approval and good SL? is good idean wait 1 year and apply for 5 or 4 or 3 or 2 or 1 cards after 1 year mark?

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I got 4 without an issue, but it all varies by your profile. If you're going for Chase though, you can't get multiple in the same day. You'll want time between each one (I think at least 6 months but could be wrong, not a Chase guy).

[Anonymous]

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@juanjunior99 wrote:

How much cards i can apply in a year with a good rate approval and good SL? is good idean wait 1 year and apply for 5 or 4 or 3 or 2 or 1 cards after 1 year mark?

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@juanjunior99 The problem is your oldest account is very young and Chase likes to see a little bit of track record and with the current economic climate that compounds that. 

Each issuer has idiosyncrasies and propensities and Chase has a 5/24 rule. You will not be granted an account if you have opened 5 in the last 24 months.

If it were I, I would wait until my youngest card reached one year of age and then, if you like, try Chase first and see if you get lucky. Do not go for a second card with Chase yet, if you do get lucky.

Then maybe get one or two other cards within a few days, keeping in mind which CCCs pull which bureaus. Then go to the garden and don't do anything until those cards turn one year old and then repeat the cycle until you have what you want and then permanently lock in the garden unless necessary. 

No more than 3 once every 12 months until you get some age in this climate. Just my humble opinion and you should also read the thread linked in post 7 of the Primer regarding reaching 800 I think with a 2 year credit file!

@Anonymous has some very detailed and awesome data regarding young credit files. Good luck and research your cards before you get them and avoid retail cards, unless they're really gonna save you money.

[Anonymous]

And don’t expect monster limits off the bat, they will grow, that’s another thing you can research when you research different CCCs.

[juanjunior99]

Thank you so much, I really appreciate your time and advice @Anonymous .

I will reorder myself and wait for the one-year mark, since it is very true that cards with limits of $ 300-$ 500 SL seem to make it more difficult to grow than one that has at least $ 1500 or more of SL, taking into account consider my young credit file

[juanjunior99]

After touch the one-year mark, if I want apply for 3 new cards, what is the best way? apply for all cards the same day? week? month?, what period of time is recommended to leave between applications

[Anonymous]

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@juanjunior99 wrote:

After touch the one-year mark, if I want apply for 3 new cards, what is the best way? apply for all cards the same day? week? month?, what period of time is recommended to leave between applications

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The most desired one first or the hardest one first

Can search up how each lender treats applications (their own rules)

Most people will say 6-12 months between applications for the highest approval odds, especially if you have new/young credit file

[ccquest]

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@juanjunior99 wrote:

After touch the one-year mark, if I want apply for 3 new cards, what is the best way? apply for all cards the same day? week? month?, what period of time is recommended to leave between applications

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I'd say research which bureau they each check. If they aren't all the same, go for the same day that way the new accounts don't show up when the other checks. If any issues, wait 6 months to try again.