For those skeptics in the crowd, I thought you’d be interested in Scott’s email regarding the change to his credit score after applying for credit cards.
I have been reading your blog for a while and have been able to take advantage of a few of your mileage deals. The Citi AA credit cards (x2 for me and x2 for my wife), US Mint (just a few thousand to cover the required spending on the Citi AA Cards), and the Chase British Airways Visa 100k mile offer (again, 1 for me and 1 for my wife). Thanks for the tips! FYI, all of this was in the past 5 months or so, I started out with a credit score of 787, and my wife was very worried that “scamming the system” (as she called it) by applying for several cards in a short time span would really hurt our credit scores.
Recently I received an email from Citi offering 4,000 miles if I open a Citi savings account. I filled out the application and, to my surprise, I was REJECTED. When I requested my free credit report I paid the extra fee to get the current score, which turned out to be 768 – still very good. So after 3 credit cards opened, plus a new car loan last summer, my score only went down by 19 points. I guess my point is – as you have said on the blog – that if you’re being responsible with your credit, taking advantage of these offers won’t put a significant or lasting dent in your credit score.
By the way, my guess is that I was rejected because I have one credit card with a high limit that is nearly maxed out, as I took advantage of a 0% APR+$0 fee balance transfer offer and put the cash in an ING savings account. That cash is earning a (low but better than nothing) 1.25%, and I don’t need any more AA miles now anyway, so in the end it doesn’t matter that I was rejected. Maybe I’ll use it as a handy excuse to cancel my two Citi AA credit cards. When my wife canceled hers after they didn’t offer the retention bonus, they flat-out accused her of just signing up to get the miles (which she denied!).
Anyway, I just wanted to say thanks for the tips and keep them coming! And feel free to share my letter with your readers – just please omit my name and email.
And my reply:
Thanks Scott. Glad to see your minimal score change was confirmed.
I’m surprised you received a denial for a new deposit account even with the extremely high balance to credit limit you reported. I would contact them for reconsideration.
In the future when you do balance transfers for an interest income play, only do 49% of your personal card limits and 89% of your business card limits and you’ll have better success with your future applications.
Congrats on your miles and points successes.
A 19 point drop for 3 card approvals and a new car loan is about what to expect. If you pay your bills on time, do not extend your balances past about 50% of your credit limit (35% is better) and keep an eye on your credit scores (free trials on the right hand blog column), the number of approvals you can get and miles you can earn will keep you in free flights for years to come.
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