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Any drawbacks to my credit card plan?

sard 522 19 February 8, 2016 at 10:01 AM
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My wife and I just paid off the mortgage on our tiny apartment and according to my latest Discover Card "Fico" score, it is 843.
We're not planning on moving for another year at least.

Based on this, I want to apply for a bunch of credit cards and use their initial offers then either keep them or cancel them. (I currently have 6 cards, but mainly use my Discover and 1 visa)
For example, I just got in the mail an application for Amex Gold with the offer of spend 1k in the first 3 months and get 50k points and the annual fee is waived for the first year.
So I would get the card and the points then cancel it before the year is over so I won't have to pay the annual fee in the second year.

I have the discipline not to spend more than I can pay
I will also pay off the bill every month and not carry a balance

Are there any potential drawbacks to my plan?

The only issue I can think of is the hit to my FICO score due to all the inquiries. But I'm hoping that after a year or so it will go back up when we decide to apply for a mortgage/if we move.

Thank you all for any replies

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#2
Seems like a lot of work to setup and close & potential hit to your credit, not sure if it would be worth it to me depending on what the rewards were. I would read the fine print. I know some have penalty if you cancel early etc in regards to rewards.
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Last edited by LiquidRetro February 8, 2016 at 10:22 AM
Vague questions receive vague answers . . . . . .
#3
Not a bad plan, but as Liquid mentioned be sure to read that fine print to make sure there's no penalties as far as paying back the rewards go.

Also, your FICO will not only take a hit because of all the inq's, but also because of the decrease in your AAoA (Average Age of Accounts).
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#4
But it could also potentially raise my score because of the increase of the "total debt vs potential debt" ratio.

But good points on the penalties. Never thought about that. Maybe I'll keep the cards open (except for the ones that have an annual fee)
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#5
Not a bad plan although the very fruitful "app-o-rama" days are over.

I would suggest using a site like Mint.com to keep track of all of your new accounts.
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#6
In my opinion, the bonus chase game is not worth the time. If you need another card and the bonus is just a plus then go for it. I fail to see the value in going through a bunch of cards to reap the bonuses and then cancel.

Your average age of accounts metric is going to take a hit and that is likely your biggest draw-back. I think it's important to remember that credit score is not the only criteria for loan underwriting.

Can't say I recommend or see a worthwhile benefit. To each their own.
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#7
Quote from Slurpee23 View Post :
Not a bad plan although the very fruitful "app-o-rama" days are over.

I would suggest using a site like Mint.com to keep track of all of your new accounts.
What do you mean by app o rama?

Thank you
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#8
Quote from sard View Post :
What do you mean by app o rama?

Thank you
Older strategy by applying to a zillion (exaggeration) cards or services all at once to benefit from the bonuses without triggering too much credit impact.

There are lots of little ways people try to turn small margins into more so they chase after bonuses or perform some manufactured spend. IMO these are not fruitful strategies and you are better off performing proper budgeting/saving/investing to maximize monies rather than hunting for bonus programs.
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#9
got it.

thanks
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#10
21000 points for 100$ amazon gift card with my amex.
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for those that hate spelling mistakes www.walmarts.comCool

bulb save money by checking your insurance every 2 years (and not every 20)
#11
Quote from eekthecat View Post :
Older strategy by applying to a zillion (exaggeration) cards or services all at once to benefit from the bonuses without triggering too much credit impact.

There are lots of little ways people try to turn small margins into more so they chase after bonuses or perform some manufactured spend. IMO these are not fruitful strategies and you are better off performing proper budgeting/saving/investing to maximize monies rather than hunting for bonus programs.
I am flying First class US to Tokyo and then Thailand, all flights and hotels paid for with bonus chased points. THis would easily cost 25k if you paid cash. Not worth it still?
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#12
There are a lot of people that are into churning credit cards. I do it a little, but nothing significant. I don't play the MS game or any of that sort. If I truly wanted to bring in more income I have other avenues doing per diem contract work in relation to my profession or doing more freelance photography work again...
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#13
Quote from sard View Post :
But it could also potentially raise my score because of the increase of the "total debt vs potential debt" ratio.

But good points on the penalties. Never thought about that. Maybe I'll keep the cards open (except for the ones that have an annual fee)
I believe, Average age of Accounts will hit your score hard.
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#14
I was shopping around for a mortgage last july. Speaking with a bunch of different lenders, they said that a 740+ score will qualify you for the best interest rates. Anything above that won't make the rate go down any lower. So for you with a 843 score you should be okay to apply for a couple cards for the sign up bonuses. Maybe you can try and be a little more conservative with the number you apply to at once so its not a huge number of inquiries and a big hit to AAoA

Also, from what I've heard opening accounts and then closing them right away may not be the best way to optimize your score, but leaving cards open and never using them doesn't help at all either. What I do with my older cards that I never use anymore is just setup one subscription service per card and have it autopay. For example I have netflix on one card, and a monthly charitable donation on another. That way I can set it and forget it, but the account still shows regular usage.
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#15
Quote from boingyman View Post :
There are a lot of people that are into churning credit cards. I do it a little, but nothing significant. I don't play the MS game or any of that sort. If I truly wanted to bring in more income I have other avenues doing per diem contract work in relation to my profession or doing more freelance photography work again...
I don't know how many people do it purely as an income source. People I know that do MS do it to "play the game" and see how much they can get out of it.
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