RUMOR: That Chase and British Airways are extending their 100,000 mile card offer for another month. Will try to confirm ASAP.
On Saturday I wrote about the first steps needed to successfully apply for travel rewards cards. The steps include obtaining your current credit score and checking your credit report for accuracy. Now the decision on which cards and how many to apply for.
Step 1: Realize that each and everyone of us has a unique credit file and credit history. I’ve been applying for credit cards for years, have a very long and successful history, and can push the limits far more than a rookie with credit card applications. The reason we offer to go through your basic information with you by email is because your situation is unique and we want you to be successful with your applications. We won’t dig into your personal information other than wanting to know your credit score, depth of your credit file, and current card holdings. We never ask for social security numbers or any other identifying personal information. If you want help, drop me an email at email@example.com
Step 2: Knowing that your credit file is unique, you can also determine your comfort level in applying for multiple cards at the same time. It would be fantastic if we were all comfortable applying for 5-10 cards per 90 days and just loading up on miles and points, but many of you just aren’t sold on that idea yet. I get it. Realizing that each credit inquiry will effect your score 2-5 points to the negative in the beginning, what are you comfortable with? There absolutely nothing wrong with going slow.
Step 3: The score you have may limit the number of cards you can apply for. We always want your score to stay over 700 on the FICO scale and in some cases (if you have a major purchase in your near future even higher). If you have a score of 710 and you want 4 cards, I’m going to suggest that you back down on your applications. Four applications at a 5 point hit for each inquiry could lower your score below 700. That is a no no in my book. The higher your score the more flexibility we have. Do you stand a chance to be approved; sure? We want to always keep you over 700 so that if you need to apply for a loan, or refinance, or a great new card comes out you can get approved. I always say take one less instead of one more … in the long run, it pays off.
Katy and I have had most, if not all, the current cards available to consumers now. We are limited in that many of them are available to “first time cardholders only”. As newbies, you have a multitude of options and my directions is almost always to:
1. Choose the current offerings that provide the highest value in travel dollars for your credit inquiry. I want you to get at least $500 of value for your application and will try to direct you to cards that offer the biggest bang. In some cases that is limited by the amount of spending you can do on a credit card each month. Some of the bigger offers require a hefty minimum spend within a three to six month time frame. If we can’t meet that spending requirement then my recommendations are going to change. The approach will be tailored made to your situation. There are still great offers available where you qualify on the first use of your credit card. The US Airways card is a perfect example. But don’t apply for it now. Lets finish the story first and make sure we have whats best for you.
2. If you have room for more than one credit card I recommend that you apply for as many as you are comfortable with and keep in mind this suggestion: no more than one personal card from each of the card issuers (American Express, Bank of America, Chase, Citi, etc) in any one batch of applications. Yea, I know, others have been lucky at times and gotten more than one approval, but as a newbie I wouldn’t risk it. So if you have the room on your credit score try one personal card from Chase, Citi, Barclays, Bank of America, and American Express. To do that I would recommend a score over 725 to try for five in one day (At 2-5 points per inquiry we’re still keeping your score at 700 or above post inquiries). Don’t be greedy and do only what you are comfortable with. If it is only one card then just do one card and don’t feel bad about it. You are dealing with a very valuable asset and until you are comfortable: Go Slow. Deals come and go, there are always new ones on the horizon.
3. On the other hand if you have a great score and can find five business cards as well as five personal, you could do up to ten cards in one sitting. Five personal and five business, with one each from each issuer. To me, that would be the max for someone with a terrific score, low inquiries, and is willing to take the hit to their credit score.
There are lots of great products out there and if you have the excess credit to try more than one out, go for it … but only if you’re comfortable. And make sure that the bonus offered is worth the hit to your credit score. I currently like to get a minimum of $500 of free travel per application. Figure 2-5 points per inquiry that will stay on your credit file for two years with diminishing negative effect as time goes on. And remember the aggregate total of the minimum spend requirements. That too may limit your number of applications.
Don’t forget you can email me with questions at firstname.lastname@example.org
Deal of the Day
For today’s Deal of the Day American Airlines AAdvantage® has provided 2500 AAdvantage® miles for the best deals, fares, promotions, anything related to American Airlines, their oneworld partners or AAdvantage® partners. Add it to the comments section of this post or this afternoon’s Deal of the Day post (with your first name, last initial, and home airport) to be eligible to win.