Pros and Cons Of Applying To Multiple Cards AKA An App Party
If you enjoy travel reward credit cards, or any other credit reward programs and wish to maximize your rewards come 2016, an app party may be for you. An app party will greatly reduce the impact to your credit score when applying for new credit cards. An app party, otherwise known as an application party is where you fill out multiple credit card applications at one time. If you do not have the need for an immediate perfect credit score than you can do an app party with no real adverse risks to your long term credit score. Yes your score will dip, but this will only last a few months. You should not however under any circumstances do an app party if you plan on getting a new car, loan or mortgage in the next 6 months due to the temporary dip in the credit score, which if well managed will disappear and go back to normal within six months.
For an app party you want to focus on only the credit cards that offer high rewards sign up bonuses. The goal is to maximize your sign up rewards to travel for free all year long. An app party is your fast track to free travel via airlines and free hotel stays, car rentals and more. The trick with maximizing your rewards is to budget and spend only what you can pay off every month while. App parties require time on your part, not for filling out the applications, as these are filled out rather quickly. Your time sink is in managing your credit cards, meeting the minimum spending requirements for the sign up rewards, tracking your expenditures.
When I did my app party my Vantage credit score dropped by 46 points, from 812 to 766. My score went back up monthly and now 8 months later my score is actually slightly higher than it was before the app party, mostly due to me being responsible with my credit cards and once i met the minimum spending requirements for the sign up bonuses, I no longer used the credit cards in question for any major spending. I did use the said credit cards for one random small purchase every 3 months top keep the account open. The reason for this is to keep the account in good standing. By keeping most of the cards open, (I opened 5 cards for my app party, I closed 1 out and kept 4) my credit score utilization was lower than it was before the app party, which increases your credit score. I kept my oldest credit cards as the age of your accounts also effects your credit score. You want to always at least keep 3 cards open, remember you don’t need to really use these, just keep them open to reduce your credit utilization rates.
Tips to running a successful App party:
1) Never spend more per month than you can pay off at the end of the billing cycle. Failure to do this could lead you into trouble with your credit and land you into debt. You simply purchase on your credit card the things you normally would. You can however make loan payments that you normally would pay off with a check in most cases with your credit card, such as auto lease payments and mortgage payments for example. If you are tempted to spend more than you can pay off at the end of the billing cycle, the app party and rewards game is not for you.
2) Have an entry strategy and an exit strategy in place. You need to be careful to not open to many accounts at once, but open them over time. I did two cards one month, and another card 2 months later, and I closed out the very first card as I had met the rewards requirement and transferred my rewards points out to the airline already. Then a month later I did 2 more cards. Use annualcreditreport.com and Credit Karma to monitor your credit score as you go along with your app party and keep an eye out for any changes to your credit score or any issues that could affect your credit score.
3) Answer yourself these important questions:
How many cards do you plan to apply for and how spread out will your applications be?
How will you track your spending and credit card billing statements?
How can you meet the minimum spending requirements for each card without going over your budget and avoiding any interest?
Do any of the new cards come with an annual fee on year one? If yes than does this cards rewards program justify filling out the application? Think rewards to risk ratio here.
How much spending does each card require in order to meet the sign up bonus and how quickly can you meet the sign up requirements? The answer to this question is directly related to how spread out you fill out your applications as you need to meet the minimum requirements for each.
To be a pro at this game you need to stay on top of the best offer available in the credit card rewards game. This website lists some of the best rewards programs in the industry, and our list of offers is updated every time a new offer comes out. With any website you use just make sure the information is updated often. When you do consider filling out an application, do make sure you read the applications fine print for any catch 22s. You want to pay special attention to fees such as transaction fees, late payment fees, the reward program rules such as are points transferable, how to earn miles or points and is there any caps involved or do your points ever expire.
Lastly the key to racking up rewards is to make every dollar you spend work for you. If your spending and not earning a rewards point or a mile, the dollar is a wasted dollar. You work hard for your money so make your money work hard for you as well. As I mentioned earlier you can pay for your mortgage with your credit card. You can even do so even if your mortgage company does not accept credit card payments by making use of bluebird or Evolve Money, although both of these methods require a little bit of work on your part but can enable you to earn rewards where you otherwise could not earn them.
Be sure to check out our list of the best credit cards offers for an App party.