Open a CC just for promotion?

[J.Apple902]

Just got a Citi CC offer for 1.2 points per $1 dollar spent on everything for first year, and $150 statement credit after spending $500 or $1000. Are there any negatives of using the card for 6mo. or a year just to get the promotional bonus, then closing the card? I dont think i would do it jus for $150, but what if it was $300? Maybe.

Thoughts?

Thanks!

[bjl584]

Your credit score might take a ding for a short amount of time by opening a line of credit then closing it within a year, but it will recover quickly as long as you have good creit otherwise.

[asmom]

Absolutely, I do it all the time although I haven't ran into any good deals since Chase AARP 5% cash back last year. But it has to be for a good offer, $150 is on the low end.

[skydivingchic]

I would do it. I take advantage of these types of deals when I can. I've also opened store credit cards to receive 0% financing or a percent off a large purchase. I close them right after they have served their usefulness. My credit score was over 800 when it was checked last month for a mortgage refi, so no ill affects.

[disneysteve]

I used to do this more. Not sure why I stopped. I guess the hassle factor of having another account to deal with, track, cancel, etc. I'll have to keep my eyes open for worthwhile deals when I get them.

[kv968]

I just opened a BoA rewards card for a $300 bonus. They offer $100 but eventually sent me an offer for $300 so I decided why not?

[MonkeyMama]

Having a long-term consistently high FICO score, I haven't seen any downsides to this. The rewards have been very fruitful the past year or so - my spouse and I have both opened several cards - about $6,000 in rewards the past 12 months. Literally!! {I personally always close every single card when I am done. Less to worry about and keep track off - absolutely no negative affect to our credit scores. For reference, our last two refinances were in the middle of some crazy credit card reward binge - 2008? and 2011. Easily qualified for best rates, as always.}.

Of course, if your FICO is not excellent, you are going to keep the card open (best rewards will come with annual fees after first year), or you can't control yourself to pay it off, on time, and avoid all fees, then of course it is not worth it. I should be clear that I have never have paid a cent to a credit card company, though I have been playing these games for almost 20 years. If you aren't detail-oriented and well organized, it's probably not worth the potential pitfalls. I wouldn't want to mess with my FICO score either, if it was on the lower side. I keep an eye on it - no one truly understands FICO so different results for different folks. You won't know until you try.

[rennigade]

Southwest Airlines Rapid Rewards® Credit Card

I wouldnt open a cc for $100 or $200 anymore. I used to..but with so many good offers coming our monthly you should hold out for something better.

The above link is to an offer for $500 in gift cards for a credit card with a $69 annual fee. Last year the same card was out, same offer, but the gift cards were on sale, so I was able to get $625 in gift cards at that time.

Still, the offer now is pretty decent.

[dawnwes]

I just did this a couple of times this year. One was a $300 credit and one is a $500 credit (after spending $3,000 in 3 months.)

Since I had a large expense coming up I had cash for but could use the CC first, I went for it.

Dawn

[J.Apple902]

Thanks for the advice guys. I'm just going to pass on this one and camp out for better future offer. I recently handled a false negative on my credit report, and since my credit score has rebounded substantially. I opened the Chase Freedom card about a month ago. I want to wait a decent period of time before starting a new card so I do not have too many inquiries on my report.

Thanks!

[JoshuaHeckathorn]

Thanks for the advice guys. I'm just going to pass on this one and camp out for better future offer. I recently handled a false negative on my credit report, and since my credit score has rebounded substantially. I opened the Chase Freedom card about a month ago. I want to wait a decent period of time before starting a new card so I do not have too many inquiries on my report.

Thanks!

Good choice...there are plenty of more lucrative sign-up bonuses on the market right now. For example, check out the Chase Sapphire Preferred Card which is currently offering 40,000 bonus points (worth $500 in airfare) after spending $3,000 during the first 90 days. The annual fee is even waived for the first year.

I apply for about 3-4 rewards card per year to take advantage of sign-up bonuses and my FICO scores are consistently high. Since you just applied for the Chase Freedom card, I would simply wait a few months to see how your scores adjust. If all is well and the Chase Sapphire deal is still around, it's a good one to consider applying for next.

[jteezie]

Here's a follow up question for the credit card rewards veterans:

What is a good strategy for signing up for credit cards? I realize results may vary by person, but would you say something like...

Open 1 credit card on average every X months with bonus $#00.00 rewards?

What's the most one can expect to get for free?

[J.Apple902]

I'm mainly interested in what period of time a hard credit inquiry lasts on your credit report. More importantly, I am concerned with how long it can be viewed as a negative.

Thanks!

[MonkeyMama]

I'd say historically we only opened a credit card if we could get a $100+ reward. Which generally usually only comes along once or twice per year, at best.

The past year has been another story. $500 rewards have been the norm, and so my spouse and I have both done 5 or 6 - sometimes putting each other's names on the cards (so would show as even more open credit on our credit reports). I haven't been concerned at all with the inquiries. The thing is the inquiries do not show on all your credit reports - they get spread out - maybe one or two per credit bureau. If we both had 10 inquiries on every report, that might be another story. {I do not know how long they stay on report. No more than a year??}.

This is totally new territory, as I have never seen rewards like this. We will keep redeeming them until it affects our credit score. It has not affected them at all, so we just keep applying, and closing them when we are done.

I am somewhat of a "don't intend to borrow - don't care about FICO" mind, but we just refinanced, and would like to refinance to a 15-year-loan in the near future (if we can get the payment reasonable by paying down enough principal). So, I am concerned with keeping an *excellent* FICO score. OF course, I am not saying that everyone will have the same results. Depends on your FICO profile and history, etc. My experience is that as long as we pay all our bills on time, and our debt ratios in line, nothing else we do seems to affect our FICO negatively. This has been true ever since we have had a mortgage. Other than that, we only have "paid off monthly" credit cards on our reports.

[JoshuaHeckathorn]

I'm mainly interested in what period of time a hard credit inquiry lasts on your credit report. More importantly, I am concerned with how long it can be viewed as a negative.

Thanks!

A hard inquiry can last for 2 years on your credit reports but FICO only considers it in your score for 12 months.

FICO recently blogged about the effects of hard inquiries on credit scores and stated that consumers lose less than 5 points on average for a credit inquiry. However, it's important to remember that for those with a strong credit history, a hard inquiry might even have zero effect on their scores.