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I’m not going to tell you opening five credit cards in one year is always a bad idea. Plenty of savvy card lovers do exactly that — and come out way ahead.
But there’s a real difference between doing it strategically and doing it carelessly. And there are real downsides to doing it the wrong way. Here’s what to expect.
Your credit score will drop — temporarily
Every time you apply for a new credit card, the issuer runs a hard inquiry on your credit report. One inquiry typically shaves a few points off your score.
Five in one year, though? You’re looking at a more noticeable dip, often in the range of 20-30 points.
The good news: Hard inquiries stop affecting your score after 12 months and fall off your report entirely after two years. If you start with strong credit and aren’t planning to apply for a mortgage or auto loan anytime soon, the temporary hit is usually manageable.
Your average account age takes a hit
This one lingers longer. Credit scoring models factor in the average age of all your open accounts, and five new cards drag that average down significantly.
If you’ve spent years building up account history, five new accounts can undo some of that progress for a while. It recovers over time — but a lower average age can hurt your credit score, too, or at least limit growth.
Your total available credit goes up
Here’s where things swing in your favor. More open credit lines means a higher total credit limit, which — if spending remains steady — will lower your overall credit utilization ratio.
Credit utilization is one of the biggest factors in your score, so this can actually offset some of the damage from the hard inquiries. A 20%-30% utilization ratio is a good target — and lower is even better.
You could earn thousands in welcome bonuses
This is usually the whole point. Many of the best credit cards offer welcome bonuses worth hundreds, or even thousands, when you hit a spending requirement in the first few months.
Open five cards back to back, and earn all their bonuses, and you could easily be looking at thousands in cash back or travel rewards.
The catch: Meeting five different spending requirements in one year requires a lot of planning. It can also tempt you to overspend. For this reason, only apply for a card — or cards — if you think you can actually, reasonably land a bonus.
Want to see how much you can earn with the right card? See our list of the best credit card welcome bonuses available now to get started.
Issuers may start paying closer attention
Banks are very aware that some people get credit cards purely to land their bonuses. A lot of them have rules to help prevent it.
For example, Chase’s infamous “5/24 rule” automatically disqualifies applicants who’ve opened five or more cards across all issuers in the past 24 months. Other banks have their own limits, but Chase’s is probably the most stringent and well-known.
Here, again, planning is key. Open five cards in quick succession, and you could find yourself frozen out of the cards you actually want later.
You’ll have a lot more to manage
Five credit cards means five statements, five due dates, and, potentially, five annual fees.
If you’re organized, that’s all manageable. If you’re not, that’s a recipe for a missed payment or an annual fee you can’t cover.
For this reason, it’s helpful to have a system for tracking everything. You might also want to limit your card lineup to two or three issuers. That way, you don’t have to track a bunch of different apps and accounts on top of everything else.
Opening five cards: Difficult, but not impossible
Landing five credit cards in one year isn’t reckless by definition — but it’s only smart if you go in with a plan.
Know your credit score going in, space out applications when possible, and have a clear idea of what bonuses you’re chasing and why.
If you do it right, the upside — and rewards — can be substantial. If you do it wrong, you could be left with a lower credit score, a stack of annual fees, and not much to show for it.
Ready to get started? Check out our list of the best credit cards available now and find the right one(s) for you.
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