Why Applying for Multiple Credit Cards at Once Is a Bad Idea

Two men smile as they look a computer. One is holding a credit card.

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Here's why you may want to apply for one credit card at a time.

There are times when you may be tempted to sign up for multiple credit cards at once. It could be that several cards offer great sign-up bonuses and you want to take advantage of them. Or you may just want to secure more purchasing power. As tempting as it may be to fill out multiple credit card applications, here's why you're better off applying for new cards one at a time -- and, ideally, spacing out applications by at least 90 days.

1. It could drag down your credit score

One factor in calculating your credit score is new credit accounts. Too many new accounts opened at once could hurt your score. Plus, every time you apply for a credit card, it counts as a hard inquiry on your credit report. A single hard inquiry usually results in a credit score drop of 5 to 10 points, and that's not so significant by itself. But if you apply for, say, three cards at once, that's a much bigger hit when you add up those points.

2. It could open the door to too much spending

The more credit cards you get, the higher your total spending limit. And while a more generous spending limit may be nice in theory, it can also open the door to too much spending.

If you open multiple credit cards at once to chase sign-up bonuses, you may find yourself unable to pay off all your balances on time. That could mean accruing interest on your debt, making your purchases cost more. Also, too high a total balance across your credit cards could drag down your credit score a lot more than a few hard inquiries.

3. It could be a red flag if you apply to borrow money or rent a home

You may apply for a few credit cards at once and still manage to maintain a high credit score. Say a series of hard inquiries drags your score down by 20 points, but you had a score of 825 to begin with. That still leaves you with an 805, which is considered excellent.

That said, anyone who checks your credit report may find it alarming that you've suddenly added so many credit cards. If you're applying to rent an apartment, a landlord might see that activity and wonder why you suddenly need access to more credit -- and potentially deny you a rental. The same thing could happen if you apply for a loan.

There's nothing wrong with slowly building a collection of credit cards. But be careful about applying for too many at the same time. Doing so could really backfire.

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