opening credit cards for the rewards?

[randp]

what do you think about opening multiple cc's for the rewards? i've opened 3 cards in the last 5 or 6 months. the first, i got 60,000 points which translated into $600 in gift cards. the next i got 30,000 pts (=$300) if i make just 1 purchase and the last i get 25k points to use toward hotel stays.

i feel like this is just free money that i would be passing up otherwise. i've been using the gift cards for walmart to buy necessities (diapers, paper products, etc) and for amazon for a bday gift for my kids.

i always pay off my balance and i'm not just spending to meet the requirements for rewards. we put everything on ccs - food, gas, etc.

there is only 1 card that i plan to close after 1st year (due to annual fee which was waived for 1st yr). i don't think this will really affect my credit score. what do you think of this? will it hurt my fico score in the long run? do you see any other bad effects from this? is it ok to keep doing it w/any new offers that come in?

last time i checked, my score was ~810.

thanks!!

[loislane23]

There was a recent article published that said closing a CC was the easiest way to lower your score a few points. I think it was yahoo, but now I can't find it.

[Susie]

Your score isn't going to stay at 810 if you keep opening cards at this rate. Every time there's an inquiry, which there is every time you apply for a new card, your score is lowered a little. Unfortunately it doesn't matter how long, how responsible, etc. your credit history is. It's just the way it is. So I would rein it in a little. No more than one a year maybe? And I'd cut it out and just stick with a single rewards card instead of chasing "sign up bonuses" if you have any thoughts of financing anything big in the next 1-2 years (like a car or a house).

[kellygreen]

When we refinanced our mortgage in December, both DH and I had a credit score avg of about 800. In January, I opened two credit cards in my name and two in DH's name to get airline miles. When we refinanced again this month, our credit scores were between 760-770. So, opening credit cards definitely does affect your score (we were still able to refinance). I woudln't open too many cards.

[phunluvin82]

3 cards in 5-6 months? I think it's safe to say that if you were to continue at that rate, it would start to hurt your credit score.

Then again, unless you're looking to buy or refi a house, car, etc...or take out any kind of major loan in the next few years, then maybe it's not really an issue.

[jinnifah]

I do this occasionally. I think I've opened 3 store CC total, each of them because I was making a large purchase and they had a deal on where you get 15% or so off if you use the card, and another 10% or so if you sign up for and use the cc or that purpose.

I'm pretty sure each of those cc's was only used the one time I should probably get off my lazy butt and cancel them.

I'm not terribly concerned about it impacting my credit score since it's already excellent and I have no need for any large purposes requiring loans.

ETA: I wonder why my iPod decided that " purchases" needed to be twice corrected to "purposes"

[Deleted]

We do what is called credit card churning. Basically using cards for points and then closing them when we're done. You have to be careful and make sure that you pay attention to all of the fine print. We also make sure to keep at least one long term card for credit history.
We have done a huge amount of travel that we otherwise would not be able to do.
It works for us, but be careful.

[niki]

I would recommend reading The Points Guy blog. He churns, and I am learning. 60,000 points is respectable, but 30....not so much. The 100K I got for British Air, now that is a deal (thank you forgotten MM Nestie person who pointed me there). Got to keep an eye on those annual fees, though.

Opening these does affect credit score. I believe it is around 1 point per hard inquiry, but if you aren't needing to have a stellar score for things like a mortgage or car, for example, and you already have a decent score to start, AND you pay your bill off every month, AND the annual fee/interest rates are good, I don't see the harm.