If you apply for too many credit cards within a brief period, issuers might see you as a risky borrower. While you can apply for as many cards as you want, each card issuer has its own restrictions about the number of its cards you may own and how long you have to wait between applications.
You'll receive a hard inquiry on your credit report for every card application you submit, with each inquiry temporarily decreasing your FICO scores by around five points.
Some issuers will allow you to apply for the same credit card again even if you already have it — provided that you follow the issuer's guidance on the topic, as well as their waiting periods, if applicable.
Multiple hard inquiries over a short time could have an even more negativeof an impact on your credit scores. Applying for multiple credit cards at once can send negative signals about your finances to lenders. The Consumer Financial Protection Bureau (CFPB) recommends applying only for credit you need.
What is the 5/24 rule? Many card issuers have criteria for who can qualify for new accounts, but Chase is perhaps the most strict. Chase's 5/24 rule means that you can't be approved for most Chase cards if you've opened five or more personal credit cards (from any card issuer) within the past 24 months.
There's no such thing as “too many” hard credit inquiries, but multiple applications for new credit accounts within a short time frame may point to a risky borrower. Rate shopping for a particular loan, however, may be treated as a single inquiry and have minimal impact on your creditworthiness.
It's a good idea to wait three to six months between credit card applications.
Capital One also has a hard-and-fast rule when timing your applications. You're only able to get approved for one card every six months. This lumps personal and small-business cards together.
2/30 Rule. The 2/30 rule says that you can only have two applications every 30 days or else you'll automatically be rejected.
It can be a good rule of thumb to wait between applications when applying for new credit cards. Many borrowers typically wait between applications to avoid opening more than one or two new accounts every six months, more than two or three accounts per year, and more than four or five accounts every 24 months.
Keeping a low credit utilization ratio is good, but having too many credit cards with zero balance may negatively impact your credit score. If your credit cards have zero balance for several years due to inactivity, your credit card issuer might stop sending account updates to credit bureaus.
A hard credit inquiry could lower your credit score by as much as 10 points, though in many cases, the damage probably won't be that significant. As FICO explains, “For most people, one additional credit inquiry will take less than five points off their FICO Scores.”
Canceling a credit card is usually a bad idea, but there are a few exceptions. You don't want to close an account if it makes your credit utilization ratio go up, especially to more than 30%. Alternatives to closing a credit card include upgrading or downgrading the credit card in question to better suit your needs.
It's a good idea to wait at least six months between credit card applications to protect your credit score and avoid exceeding certain card issuers' restrictions. Several applications submitted within a short time frame could damage your credit score for a period of time.
FICO explains that a single hard credit inquiry often lowers your credit score by less than 5 points. However, several hard inquiries in a short period may do more damage. Applying for multiple credit cards at once can show financial instability, making you seem like a risky borrower.
Create a budget that works for you
I personally love using the 50/30/20 method, a popular technique where you break your budget into three categories –– 50% goes to needs (think: food, water, shelter), 30% goes to wants (fun things like travel, dining out, and hobbies), and 20% goes to savings and debt.
No one's going to make you wait a set time between credit card applications. But companies like Experian and Bankrate suggest waiting six months. One benefit of waiting between applications is that it could help protect your credit scores from the negative effects of multiple hard inquiries.
Capital One may automatically increase your credit limit if you use your credit card responsibly. Some Capital One cards, especially those geared toward consumers establishing or building credit, offer the opportunity for an increase after six months of on-time payments.
Multiple credit card applications result in multiple hard inquiries that may noticeably lower your credit score. Opening several accounts around the same time decreases the average age of your credit history, which can also impact your credit score.
Being denied for a credit card doesn't hurt your credit score.
Hard inquiries serve as a timeline of when you have applied for new credit and may stay on your credit report for two years, although they typically only affect your credit scores for one year. Depending on your unique credit history, hard inquiries could indicate different things to different lenders.
Although a single hard inquiry might only hurt your credit scores a little, multiple hard inquiries could increase the impact. And an application can lead to a hard inquiry even if the creditor denies your application.
Credit Karma allows you to check your credit report and score for free, without affecting your score. The service doesn't hurt your credit score because it counts as a self-initiated inquiry, which is a soft credit inquiry.
A soft pull on your credit shows basic personal information, a summary of your credit history, recent inquiries, any public records related to your credit, and sometimes a summary of your credit scores. It does not reveal detailed account-specific information and doesn't affect your credit score.