When to apply for a credit card

August 1, 2015

by — Posted in Guide to Credit Hacking

Great question! There are two schools of thought here: either you apply for cards as you go, or you wait to do it all at once, in an epic credit-card-application-marathon known as the App-o-Rama.

There are still adherents to the App-o-Rama, but long story short: you should probably apply for credit cards whenever the bonus is highest on that card, and whenever it’s personally most convenient and profitable for you to do so.

The theory behind the App-o-Rama is that every time you apply for a credit card, it temporarily decreases your credit score by a couple points. By applying for several cards back to back immediately, you’re able to get your credit applications approved before any of the credit card applications are reflected on your credit score, thereby increasing your chances of being approved for each card.

There are a couple reasons this isn’t the best strategy. For one, apparently credit scores are updated a lot more quickly these days than they used to, so you may not even receive any benefit from this strategy.

More importantly, a credit score is only very minorly affected by each individual credit application, and so you can easily do double digits in applications every year without being rejected on the basis of excessive inquiries. And even if you are initially rejected on that basis, a simple reconsideration line call can usually fix that problem.

And so you should almost never, ever, sacrifice a higher bonus for a lower one just to do an App-o-Rama. This is especially important as credit card issuers have begun tightening their rules on ‘churning’, or repeatedly signing up for the same card to get the same signup bonus. As such, many credit cards┬áhave stipulations now that you can only ever receive one signup bonus from them, and even for the rest, you can typically only do so once every year or two (business cards, however, are generally a welcome oasis of exception to this rule, so long as you have a different EIN/SSN for each business).

So what’s my advice here? Apply for a card whenever the bonus is at or near its all-time high, or when you need to use those miles the most, and have a specific points or miles redemption in mind. Don’t worry about the impact of the application on your credit score unless you’ve opened something like ten or more credit cards in that past year, and your score is on the edge of the acceptable range for the card[s] you’re going for.

Hope that helps!

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