Applying for credit cards

Scott,

How often can you apply for credit cards? Does it look bad on your credit report if you apply for many credit cards? My husband and I have 5 credit cards. Our credit rating is good, so most of our interest on our cards are between 5 and 7%. We owe $19,000 and I am currently emptying one of our cards so that we can transfer the entire $19,000 using their 2.99% life-of-the balance rate.

Thanks to your many tips in your newsletter!

Maria

Maria,

Thanks for writing and thanks for reading DebtSmart!

You can apply for credit cards as much as you like! It’s true that there can be a short-term negative impact on your score but it’s quite negligible.

I have 80+ credit cards and my FICO score is 804 and I apply for new credit at least a few times each year. If having too many credit cards, and applying for new credit, can hurt your score, then I don’t see any proof of that in my records.

Getting new lines of credit may actually help your credit score.

How you ask?

By increasing your credit lines, you decrease the ratio of debt to available credit. Imagine that you’re maxed out at $5,000 in debt on one credit card. You have 100% of your credit line used. If you get another, new, $5,000 line of credit, you now have $10,000 of total credit and you’re only using 50%. So, in this case, your debt ratio was cut in half!

Keep up the great work transferring your balances to lower rates. That’s the way to save money on your debt. Use the banks against each other. Competition! That’s how it should be!

Cheers,
Scott