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Quick rundown of my situation: I have no balances on any CC, I don't pay a mortgage (I rent), and I only have about $1000 in student loan debt. I never carry a balance on anything that has interest (besides the student loan, which is only like 2%). I have an "excellent" credit score (700-ish I think, or higher)
That said, I have seen many CC's have great intro offers nowadays (like, spend $3000 in the first 3 months and get $400 cash back). I usually spend ~$1200 a month on my CC anyway, and always pay it off in full on time. What would be the effect on my credit score of signing up for one of these cards, getting the intro benefit, then cancelling the card, and doing it all again with a different card? I would not carry a balance. This has the potential to shave at least 10% off everything I buy. Thoughts?
@Anonymous wrote:Quick rundown of my situation: I have no balances on any CC, I don't pay a mortgage (I rent), and I only have about $1000 in student loan debt. I never carry a balance on anything that has interest (besides the student loan, which is only like 2%). I have an "excellent" credit score (700-ish I think, or higher)
That said, I have seen many CC's have great intro offers nowadays (like, spend $3000 in the first 3 months and get $400 cash back). I usually spend ~$1200 a month on my CC anyway, and always pay it off in full on time. What would be the effect on my credit score of signing up for one of these cards, getting the intro benefit, then cancelling the card, and doing it all again with a different card? I would not carry a balance. This has the potential to shave at least 10% off everything I buy. Thoughts?
Each time that you open a new card you will have inquiries on your credit reports. Also, once each card starts reporting it will reduce your average age of accounts ( AAoA ). Both of these will lower your score.
@Anonymous wrote:Quick rundown of my situation: I have no balances on any CC, I don't pay a mortgage (I rent), and I only have about $1000 in student loan debt. I never carry a balance on anything that has interest (besides the student loan, which is only like 2%). I have an "excellent" credit score (700-ish I think, or higher)
That said, I have seen many CC's have great intro offers nowadays (like, spend $3000 in the first 3 months and get $400 cash back). I usually spend ~$1200 a month on my CC anyway, and always pay it off in full on time. What would be the effect on my credit score of signing up for one of these cards, getting the intro benefit, then cancelling the card, and doing it all again with a different card? I would not carry a balance. This has the potential to shave at least 10% off everything I buy. Thoughts?
How many credit cards do you currently have? Banks and limits of these cards?
Any Auto Loan?
Looking to get an auto loan or mortgage in next year?
I have 5 cards total (from AmEx, Citi, Chase, BofA), combined credit line about $45k, $0 balance. The BofA and AmEx cards are 9 years old, chase is maybe 7 years, citi and other chase are pretty new. I paid off my car in 2009 and have not had any auto loans since. I may be looking into a mortgage maybe a year or 2 from now. How bad of a hit will this be to my score?
With the relative age of your other accounts applying for and taking advantage of one or two of these offers should not cause any damage to your credit profile. There may be some slight initial damage for the new accounts but that would fade and recover in 6 months to a years time. Just be careful of any annual fees that may be associated with the offers. It is OK to open and close a card if it suits your purpose to do that but my opinion is that I look for cards that will serve my purpose long term with rewards or interest rates and the opening offers are just an added bonus.
And since you mentioned mortgage shopping, the usual advice is to not have new account or derogatory activity for a year before applying. It is not an automatic denial reason but as on the old TV show the underwriter will say "Lucy you have some splaining to do" ![]()
It's hard to say how many points you might loose, but I don't think it would be terrible and I think you would see any losses come back in a year if that.
However I probably wouldn't go applying for a card and get the free money and close after 90 days and apply for another one.
If it comes with a bonus plus it's a better card after the promo then what you currently have or are using, then to me it makes sense.