Hey everyone
I've always been tempted by all the freebies you get for signing up to new credit cards. I've seen everything from a $200 gift voucher (DJs) to flights (Virgin Blue and Jetstar). The lady at DJs told me to just sign up to the card, use it once to activate it, and then cancel the card. The yearly fee was $99 so with the $200 gift card it would still have been a $101 profit.
What are the risks involved? I know it can potentially damage your credit rating but I don't know more than that. I don't know what my credit rating is and don't know how to check, although I assume it's ok.
Does opening and closing credit cards damage your credit rating, even if you always pay them off in full?
Cheers
From what I understand, your record stays in the credit system for 5 years when you apply for a new credit card. Even if you close it after a day of receiving the card, this record still remains in the system. Then when you try applying for a loan within this period, this record will be available when a credit check is performed on you. The more credit card applications you make (even worse if you have a lot of defaults/overdues), the higher your risk will be for the lenders.