3 Questions to Ask Yourself Before Applying for a New Credit Card This Summer

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  • You may want a new credit card to enjoy bonus cash or travel perks.
  • Before you apply for one, make sure that's really the right call.

Don't apply for a new card without thinking things through.

Summer is when a lot of people travel and spend more time outside the home. And so if you're thinking about applying for a new credit card this summer, that may be a wise choice.

Say you're planning some upcoming trips. A travel rewards card could come with money-saving perks, like free checked baggage on flights. And if you'll be taking a lot of road trips, you may want to apply for a new credit card this summer that offers extra cash back at the pump.

But applying for a new credit card could also have financial consequences. And so before you go that route, make sure to run through these important questions.

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1. Am I managing my existing credit cards well?

If you're largely able to pay your existing credit card bills in full and you aren't carrying a large balance, then you may be in a great position to apply for a new card. But if you're already struggling with credit card debt, and you have a tendency to max out your credit cards, then you may not want to put yourself in a position where you can rack up an even higher balance. Instead, it's best to work on getting your debt under control before adding to your spending limit.

2. Am I applying for a mortgage or another large loan soon?

When you apply for a new credit card, a hard inquiry is done on your credit report. A single hard inquiry should only result in about a five to 10 point drop in your credit score. But if you're applying for a large loan, like a mortgage, you may want to hold off until that loan is in place.

While a modest credit score hit generally won't spell the difference between qualifying for a mortgage or not, it takes a minimum credit score of 620 to be eligible for a conventional home loan. If your score is a 624, having that number drop by five to 10 points could end up being a bad thing.

Plus, mortgage lenders want reassurance that you're a trustworthy borrower. If you already have a number of credit cards and you add another one to your collection, it could result in a credit mix (meaning, a collection of various credit accounts) that lenders aren't thrilled about.

3. Is there a sign-up bonus to be had?

Credit card companies commonly offer sign-up bonuses that could put free cash in your pocket for using a new card. If you don't see any of those offers available, or you're not happy with the ones that hit your radar, then it could pay to sit tight for a couple of months and wait for more generous offers to come down the pike. Some sign-up bonuses are fairly easy to snag, so it doesn't make sense to not collect free money in the course of getting a new credit card.

Applying for a new credit card in the coming weeks could set you up to enjoy the rest of the summer (and beyond) to the fullest. Just make sure to address these important questions before submitting that application.

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