Is it bad to apply for multiple credit cards on the same day

Excessive Inquiries Hurt Your Score

Applying frequently for lines of credit will lower your FICO score. As these inquiries age, their impact on your score diminishes. Although the impact on your FICO score is minimal (approximately five points per inquiry), in a creditor's eyes, a person who constantly applies for credit is a potentially high-risk customer who may be in financial trouble.

Inquiries Don't Show Up Instantly

Credit inquiries sometimes take a week or longer to show up on your credit reports. Theoretically, you could apply for 12 credit cards in one day and none of the creditors would know about the other inquiries that day. Of course, your FICO score would take a major hit when the 12 inquiries are factored into your score 30 days later. And you would have a very hard time getting approved for a loan or other credit with that many fresh inquiries on your reports.

Bottom Line

If you absolutely must have two more credit cards and you are going to apply anyway, apply for both on the same day rather than a few weeks apart. But proceed with caution: If you have not applied for credit in the past six months—and your credit report is generally positive—you have a good chance of being approved. The first application will not adversely the second. But if you wait a week before applying for the second card, you may be denied for having "too many recent inquiries" in the creditor's eyes. Even if you have excellent credit, you must weigh the long-term effect of multiple inquiries versus the short-term "high" of being approved for new credit cards on the same day. If it's worth it, do it.

So you’re looking for a credit card and aren’t sure which one has the best rewards, which one you’ll qualify for or even which one is the best for your lifestyle and needs. To help you narrow your options, you decide to apply for multiple credit cards at the same time and see which one or ones you get approved for. Can’t hurt, right? Actually, wrong.

Why not apply for several credit cards?

The simple answer is that applying for too many cards at once can hurt your credit score. Credit scores are calculated based on a combination of five factors: payment history, amounts owed, length of credit history, new credit and types of credit used. When it comes to applying for multiple credit cards at once, it’s the new credit category that’s at risk of being affected.

Every time you apply for a new credit card, you’re essentially expressing interest in acquiring new credit. Each one of these requests will cause the potential lender in question to look into your credit score. This could take several points off of your overall score. Accumulate too many of these all at once and you could be looking at a larger blow to your credit standing than you’d expect.

 Additionally, potential lenders may become suspicious if they see you’re applying for multiple credit cards at the same time. Such a move could come across as a desperate attempt on your part to secure credit. Furthermore, if one lender notices that you’ve been turned down or declined from a number of other lenders, it may decide it’s not willing to take you on either. As a general rule, you don’t want to do anything that will make potential lenders leery of investing in you. They won’t want to take on someone who is risky or displays any sort of financial red flags.

What should you do instead?

You definitely don’t want to send out too many credit card applications at once, but that doesn’t mean you’re out of options for securing credit. You’ll just need to be a little more strategic with how you go about doing so. Compare potential credit cards well before you even think about applying for one. For example, you’ll possibly want to weigh some of the following aspects of credit cards: interest rates, cash-back bonuses, rewards and sign-up bonuses.

If you’re looking to apply for a credit card sometime in the near future and aren’t sure where to start your comparison research, check out NerdWallet’s Best Credit Cards. You’ll be able to match the rewards and benefits you’re looking for with some of the top cards that offer them.

People usually apply for credit cards one at a time, and with plenty of time between applications. If you have a couple cards you like, and especially if they have limited-time bonus offers, you might consider applying for multiple credit cards at once. There are pros and cons to doing this. Read on to decide if you should give it a try.

Reasons to apply for multiple credit cards at once

The most common reasons to apply for multiple credit cards at once are:

• To earn more sign-up bonuses
• To earn more purchase rewards
• To boost your available credit

These can all be good reasons, especially with how easy it is to apply for a credit card online. To see if any of them make sense for you, let's learn more about each one.

Earning more sign-up bonuses

Sign-up bonuses are introductory credit card bonus offers available to new cardholders. For example, some cards offer a $200 cash bonus if you spend $500 in the first three months. These are one of the most valuable credit card benefits, but the best ones are often only available for a limited time.

Rewards enthusiasts sometimes decide to open multiple cards with bonuses simultaneously. Why limit yourself to one bonus if you can get two or more? This also ensures you snag limited-time bonuses before they expire.

The key here is to make sure you can meet all the bonus requirements. If each bonus has a separate spending minimum, add those up and see if your regular spending will be enough.

Earning more purchase rewards

Rewards credit cards earn some type of reward on your purchases. Depending on the card, rewards can be cash back, points, or miles.

Many of these cards earn a higher rewards rate in bonus categories, like groceries or dining. Others earn a flat rate, such as 2%, on purchases across all spending categories.

If you don't mind keeping track of which cards to use, combining rewards cards can be a great way to save more money. Instead of just applying for one type of credit card, you could get a grocery card, a dining card, plus a flat-rate card to use everywhere else.

Boost your available credit

Every time you're approved for a credit card account, that's a new line of credit you can use. If you get approved for two new cards, each with A $1,000 credit limit, you have $2,000 more in spending power.

This can be a good or a bad thing. On the one hand, you need to be careful not to spend more because of that additional credit. Otherwise, you risk ending up in credit card debt.

More credit can be helpful if you have lots of monthly bills and you've been getting close to your credit limit. Another benefit of more credit is that it can help your credit utilization ratio, an important factor in your credit score.

READ MORE: What Is a Credit Utilization Ratio?

Risks of applying for multiple credit cards at once

The biggest risks of applying for multiple credit cards at once are:

• The applications will lower your credit score
• It can lead to credit card debt
• You could have trouble managing your credit cards

Here's more information on each one so you can decide if they're worth worrying about.

The applications will lower your credit score

A credit card application has a small impact on your credit score. Each application puts a hard credit check (also known as a hard credit inquiry) on your credit history. It usually only takes off a few points at most, but multiple credit inquiries can add up to a larger amount.

Each new credit card also lowers your average account age. This is another factor that affects your credit score. If you have one credit card account that's five years old, and then you add three new cards, that's going to lower the average age of your accounts quite a bit.

There may not be a big impact, especially if you already have good credit or excellent credit. For some anecdotal evidence, I once applied for six credit card offers in a day because of the cash bonuses they were offering. My credit score only dropped by nine points.

READ MORE: Does Applying for a Credit Card Hurt Your Credit Score?

It can lead to credit card debt

Some people are tempted to spend more when they have credit cards. Because you don't need to pay them off right away, it's easier to convince yourself to make purchases you can't quite afford. And when you have several credit cards, all with plenty of available credit, it can be even more dangerous.

The best way to avoid issues here is to follow a budget. If you're sure you can do that, then the number of credit cards you have won't be an issue. But if you think you might start spending more if you have too many credit cards, then it's better to stick to one.

You could have trouble managing your credit cards

The more credit cards you have, the harder it is to manage all of them. There's a bigger chance of missing a due date, not having enough in your bank account to cover a payment, or forgetting about the requirements for a bonus.

However, it's not impossible. Plenty of people comfortably manage many different credit cards. There are also ways to simplify it, like setting up autopay and making a spreadsheet with all the bonuses you're working toward. What's important is finding the right number of cards for you.

READ MORE: How Many Credit Cards Should I Have?

Should you apply for multiple credit cards at once?

Applying for multiple credit cards at once can be a good idea in certain situations. Here are the most important requirements if you're going to do it:

• You have a high credit score. Since applying for multiple cards can affect your credit, I recommend only doing it if you have a credit score of 720 or higher. That way, a small drop in your credit score won't be a problem.
• You pay your credit card bills in full. It's best not to carry balances on your credit cards. Only get multiple cards if you know you'll be paying the full balances every month.
• You don't need to apply for a loan in the next year. Lenders are more likely to deny your application or charge a higher interest rate if you have multiple credit card applications on your credit report. If you're planning to get a car loan or a mortgage in the near future, be very selective about credit card applications.

If you can check all those boxes, then you may want to apply for a few of the best credit cards instead of just one.

READ MORE: How to Apply for a Credit Card (and Get Approved)

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