Should you apply for multiple credit cards at once?
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Updated 10:59 a.m. UTC Nov. 14, 2023
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When you’re searching for a good deal on financing, it sometimes makes sense to fill out applications with multiple lenders to make sure you find the best offers available. Credit and financial experts often recommend shopping around for the lowest interest rates on mortgages, auto loans, and even student loans (within a short window of time). But when it comes to credit cards, back-to-back credit applications can hurt you.
The good news is there are ways to compare offers from multiple credit card issuers that don’t involve applying for multiple credit cards at once. Here’s what you need to know about how to shop for the best credit card deals without jeopardizing your credit score in the process.
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Reasons why you shouldn’t apply for multiple credit cards at a time
Credit inquiries are a minor factor contributing to your credit score. But if you apply for a lot of new credit in a short period of time, there’s a risk that those actions could damage your credit score.
FICO scores — which are used by 90% of top lenders in the United States, according to the company — do allow for rate shopping if you’re applying for a mortgage, auto loan, or student loan. The scoring models will treat multiple credit inquiries in these categories as a single event if they occur within a 14-day window (or a 45-day window with newer scoring models).
However, this special treatment does not apply to credit card inquiries. So if you apply for multiple credit cards at the same time or close together, your credit score might take a hit.
“I recommend against applying for multiple credit cards at once unless you have a really good reason (i.e. two great expiring bonus offers) or it’s a one time thing. It’s not much different than applying over time, as each application will pull your credit (a hard inquiry than does affect your credit score) and the effects can be multiplied if you apply for multiple cards at once. Keep in mind that, increasingly, banks will take into account not only your recent new credit cards but also the number of inquiries you’ve had in the last six to 12 months,” says Dave Grossman, loyalty program consultant and author of ” MilesTalk: Live Your Wildest Travel Dreams Using Miles and Points”.
Wondering why your credit score matters so much? Consider these benefits of a good credit score.
What happens when you apply for a credit card?
When you apply for a credit card, the issuing bank will review a copy of your credit report from Equifax, Experian or TransUnion as part of your application. This credit check helps the lender assess the risk of doing business with you. If your credit and the other details on your application satisfy the card issuer’s minimum qualification standards, you should be eligible to open a new account.
The condition of your credit report and score, along with other factors, may also influence the terms of your new account. Credit card issuers typically offer their lowest APRs and most attractive benefits for applicants with good to excellent credit ratings.
After a credit bureau gives a creditor access to your credit information, it will add a record of the access to your credit report so you know someone has reviewed your information. This record is called a credit inquiry.
Credit inquiries that occur because you’re seeking financing are called “hard” credit inquiries. When credit scoring models like FICO or VantageScore see hard inquiries on your credit report, those inquiries have the potential to impact your credit score in a negative way.
Hard credit inquiries can remain on your credit report for up to 24 months. However, they can only factor into your FICO Score for up to 12 months. Furthermore, hard inquiries (along with other factors considered as what FICO terms “new credit”) make up only 10% of your credit score. So, they’re a minor credit score ingredient compared to other details like payment history which is worth 35% of your FICO Score.
It’s got nothing to do with texture: This is the difference between a hard and soft credit inquiry
How to secure credit without mass-applying
You can be strategic in your credit card search without putting your credit score on the line. Here’s what to do:
- Review your own credit details. Checking your own credit report results in a soft credit inquiry on your credit report. Credit scoring models don’t consider soft inquiries when they calculate your credit score. As you review your credit reports from Equifax, Experian and TransUnion, you can learn where your credit stands. Note that your credit reports don’t include your credit score, but there are ways to check your credit score for free, and checking your score won’t damage it.
- Research your credit card options. Once you know the condition of your credit report and score, you can begin to research available credit card options and select the features that appeal most to you. The best credit card offers are typically available to people with excellent credit. But even if you have credit challenges, there are credit cards for bad credit that you can explore.
- Check for preapproval. Some issuers allow you to check online if you’re preapproved or pre-qualified for any of their cards. If you are, it doesn’t mean you’ll be approved for sure when you apply, but it does mean you have a better chance than you would otherwise. And just checking for preapproval or pre-qualification won’t put a hard inquiry on your credit (though there will still be a hard inquiry if you actually apply).
If you’re not happy with the credit card options available to you, make a plan to fix and repair your credit problems. Improving credit can take time, but the benefits of a good credit score can be well worth the effort in the long run.
Frequently asked questions (FAQs)
There can be benefits to having multiple credit cards in your wallet. And while you probably shouldn’t make a habit of applying for more than one credit card at the same time, there could be situations where applying for two credit cards at once makes sense.
For example, if you’re interested in applying for two credit cards from the same bank on the same day, there’s a chance the issuing bank might use one report for both credit checks. The result? A single credit inquiry might show up on your credit report for two applications with the same credit card company. However, you shouldn’t count on that happening since there’s no guarantee it will.
There’s no universal rule to determine how long to wait in between credit card applications. Consumers with thin credit files (aka those with fewer accounts on their credit report) may see a bigger credit score impact from multiple hard credit inquiries compared to those who have multiple accounts and a lengthy credit history. As a result, those consumers may want to wait longer in between credit applications compared to consumers with more established credit files.
If you’re working to improve your credit, you may also want to wait longer before you apply for new financing of any kind — credit cards included. However, you can (and probably should) review your own credit reports and credit score before applying for another credit card to see how your credit improvement efforts are progressing before you fill out new applications.
Applying for more than one credit card at a time could have a negative impact on your credit score. When you apply for credit, a lender will access a copy of your credit report as part of the application process. The credit bureau that grants access to your credit information will add a record to your credit report called a credit inquiry.
A hard credit inquiry — the type that occurs when you apply for financing — will often have a small negative impact on your credit score. And if you have multiple hard inquiries on your credit report in a short span of time, the impact on your credit score might be more pronounced.
Individual credit card issuers can set their own guidelines where credit card applications are concerned. For example, American Express will only allow a consumer to open two new accounts with the credit card company every 90 days and up to five American Express cards total. (Note: the cap doesn’t apply to cards with no preset spending limit or small business credit cards)
Chase is another example of a credit card company that sets limitations on the number of credit cards it allows customers to open. The card issuer has an unwritten restriction known as the Chase 5/24 rule. If you’ve opened five or more credit cards from any bank in the last 24 months, you’re unlikely to qualify for any new Chase credit card.
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