by Maurie Backman | Jan. 8, 2021
The quick answer? It depends.
There are plenty of good reasons to apply for a new credit card this year. Maybe you want to increase your credit limit, or maybe there's a great bonus offer you want to capitalize on. You can apply for new credit cards as your needs change. For example, if you expect to do more traveling this year, it could pay to sign up for a travel rewards card.
But how many new credit cards should you apply for this year? There's no hard-and-fast rule, but, as a general guideline, limiting yourself to a couple of new cards is a wise idea -- though there are exceptions.
Each time you apply for a new credit card, it counts as a hard inquiry on your credit record. The occasional hard inquiry will drop your credit score by a few points -- nothing major. But multiple hard inquiries could cause more credit score damage, making it harder for you to get those applications approved.
Plus, too many new credit card applications within a narrow time frame could serve as a red flag that you're borrowing too aggressively and are a higher risk. That's why it's often smart to wait about six months between credit card applications. If you apply more frequently than that, issuers may reject you.
Keep in mind that when it comes to your credit score, it doesn't matter whether you're ultimately approved for a new credit card or rejected. Each application you submit will still result in a hard inquiry on your credit record and tug at your score, so it's important to be cautious when seeking out new cards.
Of course, if you're starting out with a strong credit score, you get a little more leeway when it comes to submitting those credit card applications. Even if a credit card issuer sees that you've recently applied for one or two other cards, if your score is, say, an 820 (which is excellent), you'll likely get approved regardless. But if your score is in the low 600s, which is only considered fair, one recent application could cause another to get rejected.
If you're planning to get one or more new credit cards in 2021, it's important to time your applications accordingly. Here are some specific situations to look out for:
No matter what your situation looks like, be mindful when applying for new credit cards this year. You don't want to go overboard, because you could not only hurt your credit initially, but also increase the temptation to spend. And that can be a dangerous thing in itself.
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.
But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases into 2022, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.
That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.
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