Is It Ever a Good Idea to Open More Than 1 Credit Card at Once?
We're often told to space out credit card applications. But what if multiple great offers present themselves simultaneously?
Applying for new credit cards is a great way to capitalize on different offers. But as a general rule, it's usually best to space out your credit card applications, waiting at least 90 days, and, ideally, more like six months, between one new card and the next.
The reason? If you apply for too many cards at the same time, it could serve as a red flag on your credit report, as lenders might see that activity and wonder why you need so much credit at once.
Also, each time you apply for a credit card, it counts as a hard inquiry on your credit report. A single hard inquiry will bring your score down a handful of points and cause minimal damage, but multiple hard inquiries will have a greater impact.
Finally, your credit mix -- meaning, the types of accounts you have open -- will help determine what your credit score looks like. If you apply for multiple credit cards at once, it could skew your personal mix more heavily toward credit cards, which is bad for your score. A more ideal mix is one with credit cards and other installment loans, like a mortgage or car loan.
Still, in certain cases, it could make sense to open more than one credit card at a time -- but only if you're staring at multiple offers you really can't refuse.
When sign-up bonuses call your name
From time to time, you may come across a sign-up bonus credit card that's just too good to pass up. For example, you may be eligible for a card that gives you $200 cash back for spending $500 within 90 days. That's a pretty easy threshold to meet, and one that could easily score you $200 with minimal effort.
But what if you come across two such offers at the same time? If you only apply for one card, you might miss out on the second offer, and so in that case, it could pay to apply for both.
That said, only open multiple cards at once if the deals are really outstanding. And if you're chasing sign-up bonuses, make sure you can meet the spending minimums on every offer you go after. Otherwise, there's no point in opening multiple cards at once.
Also, in pursuing that free cash back, make sure you won't land in a situation where you'll be spending more money than you normally would. If you usually charge $800 in expenses on a credit card each month and get two offers that cumulatively require you to spend $2,000 in three months, you should be all set. But if those offers require you to spend $3,000 in three months, that's more than what you'd normally charge. So those deals may not be worth it. In that case, you'd be better off applying for one card only unless you have larger one-off expenses you need to charge.
When it comes to applying for credit cards, there are certain rules it pays to follow. But sometimes, rules can be broken. It could pay for you to open more than one credit card at once, but if you do, make sure it's for the right reason, and also, understand that your credit score might take a temporary hit in the process.
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