Credit cards

Is applying for several credit cards at once a good idea?

Reasons to Apply for Multiple Credit Cards at Once

The most common reasons for applying for multiple credit cards at once are:

  • To earn more sign-up bonuses
  • To earn more shopping rewards
  • To boost your available credit

All of this could be good reason, especially with how easy it is to apply for a credit card online. To see if any of them make sense to you, let’s learn more about each one.

Earn more sign-up bonuses

Sign-up bonuses are credit card introductory bonus offers available to new cardholders. For example, some cards offer a $200 cash bonus if you spend $500 in the first three months. This is one of the most valuable benefits of credit cards, but the best ones are often only available for a limited time.

Reward lovers sometimes decide to open several cards with bonuses simultaneously. Why limit yourself to one bonus if you can get two or more? It also guarantees you to get time-limited bonuses before they expire.

The key here is to make sure you can meet all of the bonus requirements. If each bonus has a separate minimum spend, add them up and see if your regular spend will be enough.

Earn more shopping rewards

Rewards credit cards allow you to earn some type of reward on your purchases. Depending on the card, the rewards can be cash back, points or miles.

Many of these cards earn a higher rewards rate in bonus categories, like groceries or dining. Others earn a flat rate, such as 2%, on purchases across all spend categories.

If you don’t mind which cards to use, combining rewards cards can be a great way to save more money. Instead of just applying for one type of credit card, you can get a grocery card, restaurant card, and flat rate card to use everywhere else.

Boost your available credit

Each time you’re approved for a credit card account, that’s a new line of credit you can use. If you get approved for two new cards, each with a $1,000 credit limit, you have $2,000 more in purchasing power.

It can be a good thing or a bad thing. On the one hand, you have to be careful not to overspend because of that extra credit. Otherwise, you risk ending up with credit card debt.

More credit can be helpful if you have a lot of monthly bills and are getting closer to your credit limit. Another benefit of more credit is that it can help your credit utilization rate, an important factor in your credit score.

READ MORE: What is a credit utilization ratio?

Risks of Applying for Multiple Credit Cards at Once

The biggest risks of applying for multiple credit cards at once are:

  • Apps will lower your credit score
  • This can lead to credit card debt
  • You might have trouble managing your credit cards

Here’s more information on each so you can decide if they’re worth worrying about.

Apps will lower your credit score

A credit card application has a small impact on your credit score. Each application puts a firm credit check (also known as a firm credit investigation) on your credit history. It usually only takes a few points at most, but multiple credit applications can add up to a larger amount.

Each new credit card also reduces the average age of your account. This is another factor that affects your credit score. If you have a credit card account that is five years old and then add three new cards, this will significantly reduce the average age of your accounts.

There may not be a big impact, especially if you already have good credit or excellent credit. For anecdotal evidence, I once requested six credit card offers in one day because of the cash bonuses they offered. My credit score only went down nine points.

READ MORE: Is applying for a credit card hurting your credit score?

This can lead to credit card debt

Some people are tempted to spend more when they have credit cards. Because you don’t need to pay them right away, it’s easier to convince yourself to make purchases you can’t afford. And when you have multiple credit cards, all with lots of available credit, it can be even more dangerous.

The best way to avoid problems here is to follow a budget. If you’re confident you can do this, the number of credit cards you have won’t be an issue. But if you think you might start spending more if you have too many credit cards, it’s best to stick with just one.

You might have trouble managing your credit cards

The more credit cards you have, the harder it is to manage them all. There’s a higher chance of missing a due date, not having enough in your bank account to cover a payout, or forgetting the terms of a bonus.

However, it is not impossible. Many people comfortably manage many different credit cards. There are also ways to simplify it, like setting up autopay and creating a spreadsheet with all the bonuses you’re working on. What’s important is finding the right number of cards for you.

READ MORE: How many credit cards should I have?

Should you apply for multiple credit cards at once?

Applying for multiple credit cards at once can be a good idea in some situations. Here are the most important requirements if you plan to do so:

  • You have a high credit score. Since applying for multiple cards can affect your credit, I recommend only doing this if you have a credit score of 720 or higher. That way, a small drop in your credit score won’t be a problem.
  • You pay your credit card bills in full. It is best not to carry balances on your credit cards. Only get multiple cards if you know you’ll pay the full balance each month.
  • You do not need to apply for a loan the following year. Lenders are more likely to deny your application or charge a higher interest rate if you have multiple credit card applications on your credit report. If you’re planning on getting a car loan or mortgage in the near future, be very selective about credit card applications.

If you can tick all of these boxes, you might want to apply for a few of the best credit cards instead of just one.

READ MORE: How to Apply for a Credit Card (and Get Approved)