Author Topic: How many credit cards to open/1 year  (Read 10085 times)

wealthviahealth

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How many credit cards to open/1 year
« on: September 05, 2014, 12:02:25 PM »
I opened my first cc this past October and have since opened two more, ( November, March).
I have no trouble paying off these cards each month on time and never carry a balance on a non 0% apr promotion.

I would like to open another card within the next month or two for promotional and business travel purposes but want to make sure that
I would not raise any red flags to credit companies for establishing all of these accounts within on years time.
Other background- I have student loans and  car payment all of which I pay down aggressively and I have a credit score of 730.

Do you think opening another card would likely be a cause of concern to credit companies / significantly impact my score?

I read all of the posts about people with 20+ cards and have never been sure how many accounts per year they are usually opening.

g3

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Re: How many credit cards to open/1 year
« Reply #1 on: September 05, 2014, 01:02:35 PM »
We're in a remarkably similar boat.  Three new credit cards (December, April, June), my current credit score is 719.

I actually asked on Bogleheads two months ago about having three credit cards in the last year and the impact of a fourth: http://www.bogleheads.org/forum/viewtopic.php?f=2&t=143295

The consensus for my situation was that opening many lines of credit in a short time frame would be a red flag for qualifying for a mortgage in the near future.  This aligned with my DiscoverIT Fico report: my score is being impacted most by age of accounts.

If you're not in my situation, which is looking to take out a large loan in the next few years (mortgage), I'd go for it!  Personally, I held off on the fourth one.

nawhite

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Re: How many credit cards to open/1 year
« Reply #2 on: September 05, 2014, 01:40:34 PM »
Now that I have a mortgage and don't anticipate needing another one anytime soon, I've gone with the "Apply for one card per quarter" rule of thumb. That hasn't stopped the credit card companies from throwing astronomical credit limits my way or increasing my credit score though. 4 new cards and counting, (July 2013, Mortgage in August 2013, 2 cards in January 2014, and again in July 2014) never gotten any flak from applications. Current credit limit ~70% of my annual salary, credit score ~790.

I'll let you know how card number 5 goes in November.

Jags4186

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Re: How many credit cards to open/1 year
« Reply #3 on: September 05, 2014, 01:52:30 PM »
If you're looking for most points etc and you DO NOT need to get a mortgage anytime soon the "app-o-rama" seems to be the most effective way to go about.

The strategy is to sign up for a bunch (5,6,7 etc.) credit cards all on the same day.  If done this way none of the sign ups will see the others on your credit report.

Problems with things like this I find is most of these sign up bonuses come with heavy spend requirements.  If you sign up for 5 credit cards each with a 3k in 3 month spend requirement you're going to be buying an awful lot of visa gift cards and trying to liquidate them.

There's a blogger called "the frequent miler" who writes heavily about these types of things.  I would check that out.

wealthviahealth

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Re: How many credit cards to open/1 year
« Reply #4 on: September 06, 2014, 05:29:04 AM »
Thanks for the input. The mortgage concern certainly is what I would be most worried about; I'd hate to screw my self over when its time to
buy a house do to credit card sign ups. That being said, I am likely 2 years out from really being in that time frame, would this still be a cause of concern? Does anyone know what happens when a "red flag" is raised? Would you simply just not get the new card you are applying for is it possible that its your current card lenders who you might have to worry about?

johnny847

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Re: How many credit cards to open/1 year
« Reply #5 on: September 06, 2014, 06:52:02 AM »
Thanks for the input. The mortgage concern certainly is what I would be most worried about; I'd hate to screw my self over when its time to
buy a house do to credit card sign ups. That being said, I am likely 2 years out from really being in that time frame, would this still be a cause of concern? Does anyone know what happens when a "red flag" is raised? Would you simply just not get the new card you are applying for is it possible that its your current card lenders who you might have to worry about?

The "red flag" comes in the form of a hard credit inquiry whenever you apply for credit or a loan. The hard inquiries affect your credit score for one year but stay on your report for two years. Just because it stops affecting your credit score, it doesn't mean a lender can't take it into account - they may choose to give a higher rate based on the credit inquiries that are between 1-2 years old. Do they actually do this? No idea.

I don't know how much a credit inquiry will affect the interest rate you get from a lender. However, the potential benefit from credit card rewards can easily be dwarfed by a higher interest rate (particularly because we're talking about Mustachians here that don't charge that much money to their credit cards to begin with). So if you're looking to get a mortgage two years from now, I probably wouldn't apply for new cards (or request credit card limit increases either), as they will generate new hard inquiries.

marty998

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Re: How many credit cards to open/1 year
« Reply #6 on: September 06, 2014, 06:52:01 PM »
I don't understand why you need so many credit cards?

I find it exhausting reconciling spending on one card!

johnny847

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Re: How many credit cards to open/1 year
« Reply #7 on: September 06, 2014, 07:17:24 PM »
I don't understand why you need so many credit cards?

I find it exhausting reconciling spending on one card!

Well it's all about effort vs reward. The more cards you get, you can cover more categories of spending with better than 2% cashback (the best flat rate rewards on either the Fidelity Amex or the new Citi Double cash). For some people the rewards are worth the extra effort. For some it is not.

I currently use three cards, two of which actually reside in my wallet. For me, managing three cards is easy, so I'm planning to get more cards to cover more categories. Eventually, I'll reach a point where it will be too much to manage, but I'm not there yet.

Will

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Re: How many credit cards to open/1 year
« Reply #8 on: September 06, 2014, 08:14:29 PM »
I don't understand why you need so many credit cards?

I find it exhausting reconciling spending on one card!

Well it's all about effort vs reward. The more cards you get, you can cover more categories of spending with better than 2% cashback (the best flat rate rewards on either the Fidelity Amex or the new Citi Double cash). For some people the rewards are worth the extra effort. For some it is not.

I currently use three cards, two of which actually reside in my wallet. For me, managing three cards is easy, so I'm planning to get more cards to cover more categories. Eventually, I'll reach a point where it will be too much to manage, but I'm not there yet.

One thing that I found out about 2 years ago was the wallaby "cloud" credit card, which essentially was one card that you took with you everywhere and left all the rest at home.  How or why, you ask?  Because the wallaby card wasn't an actual credit card itself, but a link to all your cards, and when you went to use it it would figure out which card to apply the charges to so you get the most rewards.  Great idea, just hasn't come to fruition yet.  Two years ago I got on the waitlist for the card and am still waiting (as I think every single person is, as I don't think it has rolled out to anyone yet).  But anyhow, if you think you might want to get on the waitlist too, if you use my referral link (www.walla.by/sign-up/?ref=eelly6) then supposedly it moves me up the list.  And here is a link to their video explaining things more clearly (and with helpful graphics).  https://www.walla.by/the-wallaby-card

johnny847

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Re: How many credit cards to open/1 year
« Reply #9 on: September 06, 2014, 08:33:38 PM »
I don't understand why you need so many credit cards?

I find it exhausting reconciling spending on one card!

Well it's all about effort vs reward. The more cards you get, you can cover more categories of spending with better than 2% cashback (the best flat rate rewards on either the Fidelity Amex or the new Citi Double cash). For some people the rewards are worth the extra effort. For some it is not.

I currently use three cards, two of which actually reside in my wallet. For me, managing three cards is easy, so I'm planning to get more cards to cover more categories. Eventually, I'll reach a point where it will be too much to manage, but I'm not there yet.

One thing that I found out about 2 years ago was the wallaby "cloud" credit card, which essentially was one card that you took with you everywhere and left all the rest at home.  How or why, you ask?  Because the wallaby card wasn't an actual credit card itself, but a link to all your cards, and when you went to use it it would figure out which card to apply the charges to so you get the most rewards.  Great idea, just hasn't come to fruition yet.  Two years ago I got on the waitlist for the card and am still waiting (as I think every single person is, as I don't think it has rolled out to anyone yet).  But anyhow, if you think you might want to get on the waitlist too, if you use my referral link (www.walla.by/sign-up/?ref=eelly6) then supposedly it moves me up the list.  And here is a link to their video explaining things more clearly (and with helpful graphics).  https://www.walla.by/the-wallaby-card

It sounds interesting, but it would appear that I would have to tell Wallaby all of my credit card numbers for it to be effective, which I am not comfortable doing. Of course, whenever I complete an online transaction, the merchant could decide to store the credit card number indefinitely (or maybe they all do this? Not quite sure about that). But, I only use one credit card per online merchant. If any single merchant were ever hacked, I could get that card cancelled and have a new one sent. I would still have other credit cards that I could use during that time. However, if I used Wallaby and they were ever hacked, I'd have to cancel all of my cards, and hence I'd be without any credit cards until one of them gets mailed to me.
For me, I'd rather put up with the extra inconvenience of having to manage the cards myself. But I'm sure for other people the security risk would be worth the ease of use that comes from Wallaby.

kite

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Re: How many credit cards to open/1 year
« Reply #10 on: September 07, 2014, 02:15:02 PM »
Our spending is so low, that chasing rewards cards doesn't do anything for me.  One of my inlaws bought a car with one, and I suppose I'll get one when I'm in the market for a car.   I suppose if you don't need credit in the near future,  it's a good idea, but I haven't opened a new line of credit in over a decade.   

Jags4186

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Re: How many credit cards to open/1 year
« Reply #11 on: September 08, 2014, 06:28:08 AM »
Yea I mean it's ALL about effort. The blogger "frequentmiler" earned 1,000,000 points and a few $100s in 1 month through various sign up bonuses and spend. But, like him, some people get completely consumed.

I tend to care as much about credit card bonuses as it requires me to get 2 free international flights a year which is 120k-180k united points depending in destination.  Anything more than that and I'm chasing things I don't care about--upgrades, luxury hotels etc.

The other problem is if you start getting crazy with all these cards and make a mistake 1 big late fee or interest charge will wipe out much of your gains.


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arebelspy

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Re: How many credit cards to open/1 year
« Reply #12 on: September 08, 2014, 04:11:51 PM »
The wife and I opened 21 cards over the last 2 months.  We'll earn about 1MM miles (which will be cashed out as $3000 cash to our bank and about 700k miles).

The other problem is if you start getting crazy with all these cards and make a mistake 1 big late fee or interest charge will wipe out much of your gains.

I doubt it; a $25 late fee would barely put a dent in the $3000 (and, of course, not affect the miles.

I also only give there about a 5% chance of that happening, I'm tracking everything with a spreadsheet.  I expect the total hours of work (counting the manufactured spending) to be around 20.

We'll see how much it affects our credit score.  The inquiries will stop affecting the score after a year, so I'm not too worried about it.  Average age of accounts will be lowered somewhat, but I think that's about 15% of your score?

All in all, I'm temporarily selling maybe 30 points of credit score to make about $15,000, and I expect to get those points back within a year.

It's definitely worth it for us, but YMMV.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

elaine amj

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Re: How many credit cards to open/1 year
« Reply #13 on: September 08, 2014, 04:23:51 PM »
The wife and I opened 21 cards over the last 2 months.  We'll earn about 1MM miles (which will be cashed out as $3000 cash to our bank and about 700k miles).

The other problem is if you start getting crazy with all these cards and make a mistake 1 big late fee or interest charge will wipe out much of your gains.

I doubt it; a $25 late fee would barely put a dent in the $3000 (and, of course, not affect the miles.

I also only give there about a 5% chance of that happening, I'm tracking everything with a spreadsheet.  I expect the total hours of work (counting the manufactured spending) to be around 20.

We'll see how much it affects our credit score.  The inquiries will stop affecting the score after a year, so I'm not too worried about it.  Average age of accounts will be lowered somewhat, but I think that's about 15% of your score?

All in all, I'm temporarily selling maybe 30 points of credit score to make about $15,000, and I expect to get those points back within a year.

It's definitely worth it for us, but YMMV.

we are still new to the world of credit card churning. Even after a lot of study, we are still trying to find ways to manufacture spend that we are comfortable with. So I love this :)

We have done this about 3 years and now apply for about 2-3 cards every few months. We keep them for about 10 months then cancel.  We usually have one out of the lot that is our primary card - but this card does change every 6-12 months. Meeting min spends sometimes takes work - but we always make sure we have a plan before we apply. I think our credit score is higher now than when we started.

Love all our travelling for free :) Nice to splurge for fancy places once in a while although 90% of the time, we focus on maximizing our miles and happily stay in a 2.5 star place for a 1/4 of the points of a 4-5 star place.

This year, I got a Southwest Companion Pass and it was such a joy to offer a close friend going through a separation a free flight anywhere in the US for a girl's weekend. She chose Nashville and we had an amazing time. She got such a kick out of telling ppl she "Went to Nashville for 2 days" (it is not a place folks in our city typically visit except as part of a bigger vacation).

decembeir

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Re: How many credit cards to open/1 year
« Reply #14 on: September 08, 2014, 04:27:30 PM »
Quote
The wife and I opened 21 cards over the last 2 months.  We'll earn about 1MM miles (which will be cashed out as $3000 cash to our bank and about 700k miles).
What resources did you used to learn about the best available card offers and how to go about manufactured spending? I've done a few card offers over the years, but now that we are moving away from home, my husband and I would like to rack up some miles to be able to fly back once in a while. Also, are there enough new cards available that you'll be able to keep up that rate of opening new cards or will you open fewer next year?

arebelspy

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Re: How many credit cards to open/1 year
« Reply #15 on: September 08, 2014, 08:25:57 PM »
Quote
The wife and I opened 21 cards over the last 2 months.  We'll earn about 1MM miles (which will be cashed out as $3000 cash to our bank and about 700k miles).
What resources did you used to learn about the best available card offers and how to go about manufactured spending? I've done a few card offers over the years, but now that we are moving away from home, my husband and I would like to rack up some miles to be able to fly back once in a while. Also, are there enough new cards available that you'll be able to keep up that rate of opening new cards or will you open fewer next year?

We'll open fewer, but we'll get the SW companion pass, so I expect we'll actually travel more.

I highly recommend Brad over at www.richmondsavers.com - email him, he offers free coaching (no catch required, he just asks if you sign up for cards you do so with his affiliate links, but you don't have to, it's your call, he'll help you regardless).  Great dude.

The best cards right now are Chase Sapphire Preferred (net you $450), Chase Ink Bold and Ink Plus ($500-700 each), and then others depending on what airlines or other such (hotels, etc.) you wish to travel/do.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Bob W

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Re: How many credit cards to open/1 year
« Reply #16 on: September 08, 2014, 09:41:51 PM »
Thanks for the input. The mortgage concern certainly is what I would be most worried about; I'd hate to screw my self over when its time to
buy a house do to credit card sign ups. That being said, I am likely 2 years out from really being in that time frame, would this still be a cause of concern? Does anyone know what happens when a "red flag" is raised? Would you simply just not get the new card you are applying for is it possible that its your current card lenders who you might have to worry about?
.  One would hope within 2 years you would have 50 to 100 of the cost of your affordable home saved.  Your credit score wouldn't matter much.  Especially if you have no debt.

arebelspy

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Re: How many credit cards to open/1 year
« Reply #17 on: September 09, 2014, 07:53:32 AM »
Thanks for the input. The mortgage concern certainly is what I would be most worried about; I'd hate to screw my self over when its time to
buy a house do to credit card sign ups. That being said, I am likely 2 years out from really being in that time frame, would this still be a cause of concern? Does anyone know what happens when a "red flag" is raised? Would you simply just not get the new card you are applying for is it possible that its your current card lenders who you might have to worry about?
.  One would hope within 2 years you would have 50 to 100 of the cost of your affordable home saved.  Your credit score wouldn't matter much.  Especially if you have no debt.

I wouldn't assume that.  They may be buying in an expensive area, they may not be able to save up that much (might be maxing retirement accounts), they may want to have a mortgage and only put down 20% for inflation hedging reasons, etc.

We're at historically low interest rates.  Locking up a mortgage can be a very smart thing to do.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

decembeir

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Re: How many credit cards to open/1 year
« Reply #18 on: September 09, 2014, 10:04:22 AM »
Quote
The wife and I opened 21 cards over the last 2 months.  We'll earn about 1MM miles (which will be cashed out as $3000 cash to our bank and about 700k miles).
What resources did you used to learn about the best available card offers and how to go about manufactured spending? I've done a few card offers over the years, but now that we are moving away from home, my husband and I would like to rack up some miles to be able to fly back once in a while. Also, are there enough new cards available that you'll be able to keep up that rate of opening new cards or will you open fewer next year?

We'll open fewer, but we'll get the SW companion pass, so I expect we'll actually travel more.

I highly recommend Brad over at www.richmondsavers.com - email him, he offers free coaching (no catch required, he just asks if you sign up for cards you do so with his affiliate links, but you don't have to, it's your call, he'll help you regardless).  Great dude.

The best cards right now are Chase Sapphire Preferred (net you $450), Chase Ink Bold and Ink Plus ($500-700 each), and then others depending on what airlines or other such (hotels, etc.) you wish to travel/do.

Thank you for your help, Arebelspy! I appreciate it!

arebelspy

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Re: How many credit cards to open/1 year
« Reply #19 on: September 09, 2014, 10:38:14 AM »
Sure, happy to help.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

elaine amj

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Re: How many credit cards to open/1 year
« Reply #20 on: September 09, 2014, 05:03:52 PM »
I follow 4-5 bloggers to stay up to date.

Just keep in mind - this is a game. Despite how much research you do, sometimes you win and sometimes you lose.My DH is pretty risk averse so sometimes he gets annoyed when things don't work out. He's ok after I remind him this is all a game. I am pretty careful and analyse the risks of whatever we do. (Probably why we haven't figured a way to manufacture spend yet that we feel comfortable with).

My suggestion would be to start with a goal - say a trip you want to take, then figure out which CCs will get you there. I mostly only apply to get points I have plans  to use.

My faves right now are the Southwest companion pass (Easy with 2 southwest CCs). I got the Hyatt this year and plan to use my 2 free nights at an all inclusive in either Cancun or Jamaica. I also enjoyed all my Marriott CCs last year. SPG (sheraton hotels) is also well regarded. We just did a big round of Hilton cards and got 3 Hilton cards all at once.

daverobev

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Re: How many credit cards to open/1 year
« Reply #21 on: September 09, 2014, 06:04:52 PM »
Those opening loads of cards - how did it affect your credit scores? Assuming you have Discover/Barclays etc that tell you the score.

arebelspy

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Re: How many credit cards to open/1 year
« Reply #22 on: September 09, 2014, 08:18:33 PM »
Those opening loads of cards - how did it affect your credit scores? Assuming you have Discover/Barclays etc that tell you the score.

I only just started, but from what I've read over and over from a lot of people: Short term dip, long term (1-year+) help.

Tynan wrote about travel hacking today, actually: http://tynan.com/points
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

daverobev

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Re: How many credit cards to open/1 year
« Reply #23 on: September 10, 2014, 07:39:21 AM »
Those opening loads of cards - how did it affect your credit scores? Assuming you have Discover/Barclays etc that tell you the score.

I only just started, but from what I've read over and over from a lot of people: Short term dip, long term (1-year+) help.

Tynan wrote about travel hacking today, actually: http://tynan.com/points

Sorry, I meant more specifically; ie opened 5 cards, score dropped from 78x to 72x for example.