Hi everyone, just curious to see if anyone in this forum has done this before. I have read few threads about applying for credit cards for points and its effect on credit score. There is always a promotion from major banks with bonus points. My credit score is above average (as per veda score - check twice each year). I am currently using Black reward card from ANZ (I don't have to pay annual fee as part of my home loan package - owner occupied property for next 4 years) and I do have 2 other Credit Cards from different financial providers and one line of credit. I pay off my credit cards and bills in full at the end of each month and on time. My wife and I plan to purchase another property as an investment property at the end of this year. Combined household income is around 220k. We both can service the home loan and bills (includes credit cards) comfortably. My question is if i keep applying for a new credit card with bonus points and then I close it what are the consequences of this action (just say if i apply for 2-3 credit cards each year just for points purpose)?
Keep Applying for Credit Cards for Points.
Comments
I read somewhere that applying for home load can even increase the credit score. As to credit cards, 2-3 cards a year is OK. Many people apply for 10+ a year, ready a story (on australianfrequentflyer) about a guy who applied for 40 cards in one year. From my observations, in my particular case (3 credit cards, no loans, above average income) each card decreases my score by about 40-50 points.
Be careful applying for multiple credit cards, the banks can see enquiries on your credit file. A lot of people don't know that
This topic has been covered to death in this forum. Did you do a search prior to posting?
General rule is as skramit said, check score, apply, check score again. I wouldn't close the cards till nearly when their annual fee is due though.
The credit card score is a bit of a joke in Australia.
Under the new credit reporting system the banks will see every application and how much, whether it was approved and whether the account is open.
example
ANZ BANK, Unsecured, $5000, Approved 12/01/2017, Account Closed, $0 OwedIf you have multiples of these any system which "auto approves you" will say it needs further checking as it will be flagged, a person will then look at your application and probably say no eventually because they will see your history, it should not however affect your score.
I suspect your score won't change dramatically if you aply for a handful of cards over the next 12 months. Given the background info you gave and you always pay your bills, if anything your credit score might edge upwards if you successfully apply for new credit and get approved. This has happened to me over the last 2 years and I've applied for about 5 cards for points.
Having said that it's no guarantee what the score might do and the formula credit score institutions use is no doubt quite complex and has a number of factors.
My suggestion is: Check your score, apply for 1 card, check score. if no movement or it goes up, apply for a second. Etc. baby steps rather than big bang.