signing up solely for credit card bonuses

Since I don't intend to ever borrow money again, I've been opening any account that gives more than $200 in bonuses and closing the ones with annual fees. I've even had to close others or reduce the credit lines significantly in order to be eligible for new offers.

My credit score has taken a good hit, I'm sure, but oh well.

It'll go back up over time.

Thanks for responding... I wonder how much each cancellation affects the score.

from what I've read, each cancellation costs you 5-10 pts off your credit score. It really depends on what your situation is and whether you will be needing loans to buy a house, car, etc. I will not be taking out loans any time soon so I'm ok with taking a hit for a good bonus. Loans and securing good interest rates are (to me) the only reason to keep your credit score high and not have too many new lines of credit. If an employer or landlord needs to check your credit, I do not think it will matter if your score is 770 vs. 730 for example.

i want to piggyback off this question....

I have 10 accounts shown on my credit report and 5 are activate. Now when i go to some sites like creditkarma and some of those free trial sites. They tell me i dont have enough accounts open and that the average is about 15-20 accounts open.

It is hurting my score that i'm not having 20 accounts? I seem to be stuck at 760 range. But i have 5 cards because 1 is my oldest, 2 is AMEX that i use for warranty purchases, 3 is my cashback card. 4-5 i can do w/o and was planning to but it could hurt me credit limit going down. I was thinking about doing what the OP was doing, open up one every year for bonuses, i dont care for the 0% stuff.

I do however plan to buy a house in the next 10 years.

Quote from bowlofturtle : I have 10 accounts shown on my credit report and 5 are activate. Now when i go to some sites like creditkarma and some of those free trial sites. They tell me i dont have enough accounts open and that the average is about 15-20 accounts open. It is hurting my score that i'm not having 20 accounts?

Creditkarma has an incentive to tell you that you need more credit. That site is filled with affiliated credit card banner ads for a reason. It is ridiculous to suggest you need 20+ credit accounts for a good score. I have 3 credit cards and have fico scores above 810. Creditkarma is 30 points lower than my actual fico scores because their algorithm penalizes me for not having enough accounts.

It's possible to have excellent credit scores with many credit accounts, but it is not a necessity.

It's all cost/benefit. Unfortunately for the consumer, the formulae behind FICO scores aren't straightforward, so while we can make generalizations about the number of credit lines you have, quantification is difficult. Too few is bad, just as is too many. There are too many variables to really quantify it for you.

My best advice would be - if you don't plan on making any big financial decisions soon - mortgage, car loan, etc - you could apply for these offers, provided you give your score time to "heal" before a large purchase.

I agree with the above posters but would add that your credit score is a tool, nothing more, nothing less. Once you understand it you can use it to your advantage more effectively - when you are going to buy something you have to finance, lay off opening cards for perhaps the year before you do it. Buying a house shouldn't be something that you are surprised to be doing.

In the in-between times between financed purchases (which should themselves be few and far between) using the score to secure good reward or bonus CCs should be done. Note that I say should. You also should have the discipline to fulfill the requirements, never pay any interest, and immediately afterwards cancel the card. If you cannot do that, then credit is using you.

Go to f l y e r t a l k.com for rewards on airline miles. I recently did the AA 75,000 Amex/Visa spend 4000 w/in 6 months. so did my wife. That'll add up to 300,000 miles (75000*2 cards*2 people) and we won't pay for airfare for awhile. But right after we're done fulfilling the requirements to get those 75k bonuses, the card will be canceled due to the annual fees. Our two main cards (Amex Blue and Chase Freedom Visa) have no annual fee and are cashback.

Ye, I got 80 cards to my name...great idea