When Can I Apply for Another Credit Card?

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Did you know that applying for a bunch of different credit cards in a short time can be bad for your credit? That’s because each time you apply, your credit report gets hit with a hard inquiry, and that can bring your score down a bit. Plus, a lot of inquiries can make you look desperate for credit, which doesn’t sit well with lenders.

So if you’re worried, keep reading to find out how long you should wait before completing your next credit card application.

How Long Should I Wait Between Credit Card Applications?

Usually, it’s a good idea to wait at least 90 days between credit card applications. Ideally, you might wait six or more months to give time for your credit to improve or for better offers to come along.

However, if your credit is good or excellent, you can probably afford a few more applications in a short period of time. The hard inquiries that are placed on your credit because of these applications typically only bring your score down a small amount.

If you have a high score and plenty of credit history, that small of a change doesn’t usually bump you into a lower credit score range or hurt your chances when applying for future loans.

Why Does It Matter How Long I Wait Between Applications?

When a lender pulls your credit report for the purposes of evaluating you for a loan or account, a hard inquiry is placed on your file. That hard inquiry is considered a negative item because, for the first year, it does drop your score slightly.

If you’re constantly applying for credit cards, you could be dinging your credit score with small hits. Add up enough of those hits and your score could drop by a large enough amount to drag you from good credit to only fair credit, making it harder for you to get loans or accounts with favorable rates.

Some creditors also look at how many inquiries you’ve made recently because it helps them evaluate your risk level as a borrower. If you’ve been applying for every loan or credit card available, it looks like you really need the funds. And, unfortunately, if you’re that desperate for credit, many lenders will consider you a higher-risk borrower.

When Is It a Good Idea to Consider Applying for a New Credit Card?

Applying for a credit card is a serious financial consideration. It’s not something you should do on a whim or simply because you’re curious about whether you might qualify. Make sure that when you apply for a new credit card, you’re doing so with a good financial reason. Here are a few reasons you might apply for a new credit card.

When Your Credit Score Has Increased

Maybe your score has increased, and you believe you’ll be able to get approved for a card with a better interest rate or better perks. This is a good option because it helps you lower the overall cost of debt and credit in the future.

When You Want to Improve Your Credit Utilization Ratio

If you have one credit card with a credit limit of $5,000 and a balance of $2,500, that’s a credit utilization ratio of 50 percent. That can hurt your overall credit score.

But if you can get approved for another credit card with a limit of $5,000 and you don’t carry a balance on it, you now have a $10,000 total credit limit and a balance of $2,500. You cut your credit utilization ratio in half, which can be a big benefit to your credit score.

When You Want to Take Advantage of Promotions or Benefits

In some cases, you might get an offer that’s simply too good to pass up. For example, you might get a cashback credit card offer with a sign-up bonus of $300 cash back. If you know you can easily get approved for the offer and make the sign-up requirements without carrying over large balances on the card, it could be beneficial to apply.

Other promotions or benefits that might make applying for a new credit card worth it include balance transfer offers that can save you a lot on interest or travel rewards that you can use for trips you’re already planning to take.

When Is It a Good Idea to Consider Waiting to Apply for a New Credit Card?

In some cases, it’s often the best idea to wait to apply for a new credit card. It’s a personal decision, but you might want to hold off on applying in the situations described below.

When You Need to Apply for a Loan

If you know you need to apply for a loan, it’s best to avoid applying for a credit card in the weeks or months just prior to that. This is especially true when applying for a mortgage.

If you apply for or open new credit accounts between the time you’re preapproved and closing on a home, for example, underwriting requirements may change and you may not get approved for the mortgage after all.

When You’ve Recently Been Rejected

If you’ve been recently rejected on a credit card application, it’s usually best to give it some time and work on improving your credit before you apply for another. The exception to this might be if you find out your credit is lackluster, so you change tactics to apply for a credit-building or secured credit card to help improve it.

When You’re Struggling to Keep Up With Your Existing Credit Bills

If you’re already struggling with credit card payments, adding another piece of plastic to the fold is typically not a great idea. And if you’re having a hard time paying your credit cards and you’ve been late with any payments, your credit might not be good enough anyway.

One exception to this is if you can qualify for a balance transfer card that lets you consolidate your credit card debt at zero-percent interest for a short period of time so you can pay it off faster.

What Should I Do If My Credit Card Application Is Rejected?

If you’re rejected for a credit card, don’t keep applying until someone says yes—you’d run the risk of hurting your credit even more. Instead, ask the credit card issuer for a detailed explanation of why you were rejected so you have an idea of what to improve.

Check your credit report to see where you stand and if there are any negative items dragging your score down that shouldn’t be on your report. If you find inaccurate or unfair information, consider working with to dispute it and have it removed to help positively impact your score.

Then, make responsible decisions for at least six months, paying all your bills on time and keeping your credit utilization as low as possible. Don’t close accounts so you can benefit from the age of your credit, and keep an eye on your credit reports to ensure all information is accurate.

When you see your credit score start to rise, carefully consider your options before applying for an appropriate credit card again.

Posted in Credit 101
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