izusek/Getty Images- Again, this tactic is ONLY for people with a good handle on their credit.
If you have good to excellent credit and feel confident that your credit score is moving in the right direction, you are in the best position to take advantage of top-tier rewards credit cards. If you're doing some research and find that you like more than one card, why not get both?
While there are some short-term issues with applying for and opening new credit accounts, it isn't a huge issue if you already have great credit.
When you apply for a new credit card, the credit card company requests a copy of your credit report and credit score from one of the three big credit bureaus. After getting your credit information from Experian, Equifax, or TransUnion, the card issuer makes a decision on your application.Read more
When they get a copy of your credit, the credit bureau records the request as a hard credit inquiry. Hard inquiries are visible on your credit report for two years and pull down your credit score by a few points in most cases.
The pursuit of new credit makes up 10% of your credit score, and more new credit means bad news for your credit score. Lenders consider getting new credit a sign of risk. If you opened a few new cards recently, you may be turned down for a new card. That is the case even if you have a stellar credit history.
But there is a way around that limitation that makes sense in some cases.
This advice is only for people with a good handle on their credit. If you regularly carry a balance, avoid opening a bunch of new credit cards. If you can pay them off in full each month, the strategy below could make sense for you.
Why applying for multiple cards at once makes sense - sometimes
When I already had a credit score over 720, I decided to get into travel hacking. This is the term for using strategies to maximize your travel while minimizing what you spend. That generally includes earning as many reward miles and points as possible, typically through credit card rewards.If you choose cards that align with your spending habits, you should rack up points fairly quickly. I carry the Chase Sapphire Reserve, American Express Gold Card, Chase Freedom, and Chase Freedom Unlimited in my wallet every day to ensure I get 1.5x to 4x points for every dollar I spend.
But you can earn a whole lot of points at once when opening a new card. Most high-end cards offer a bonus, and if you time it right you can sometimes pick up 100,000 points when opening a new account, after meeting initial spending requirements.
If you find multiple great cards with great bonuses, what should you do?
If you have excellent credit, you should consider opening them both at once. Because it takes about a day for a credit application to show up in your credit report, applying for multiple cards in the same day means the card issuers don't know about each other until the following day. By then, you've hopefully been approved for both cards.
I know of some credit card enthusiasts who have opened five or more cards in a day, though I think my personal record is somewhere around three or four. My credit score would go down by 10-20 points when opening the new accounts, and it's possible yours could go down more. But if your credit score is already firmly in a top tier, a temporary dip of a few dozen points shouldn't cost you anything.
Always know what's happening with your credit
This kind of strategy works if you are well-versed in what's happening with your credit. If you don't know your credit score and don't know what's on your credit report, head to one of these sites to get your information at no cost.
With good information on your credit, you can confidently apply for new cards knowing your odds of approval and understanding the basics of what happens when you apply for a new card. Check out Credit Karma's credit score simulator to get an estimate on what would happen to your credit if you apply for and open a new account.