Will An App-O-Rama Clobber Your Credit Score?

In February, I did an App-O-Rama and applied for several credit cards in order to secure bonus miles to use for upcoming travel:

  • Citi Aadvantage Visa: 50,000 mile bonus, annual fee waived the first year.
  • BofA Alaska Airlines Visa: 50,000 mile bonus, annual fee not waived.
  • Chase Marriott Rewards Visa: 60,000 point bonus, annual fee waived the first year.
  • US Bank Avianca Visa, 40,000 mile bonus, annual fee waived the first year.
  • Delta American Express, 100,000 mile bonus, annual fee waived the first year.

Note that all of the above offers were exceptionally good ones. One was only available for 2 weeks, and none of these offers are now available.

This is the first time I applied for so many credit cards in such a short time, and I expected an impact to my credit score. I considered carefully whether I should really do this, but given that I don’t really need credit for anything (I have no debt except for my mortgage and I don’t need any), I decided that it didn’t really matter. I was approved for all of the cards, and didn’t have to call any reconsideration lines or anything crazy like that. Citi didn’t approve me “on the wire,” but after a day they approved my application manually and I received the card a couple of weeks later. I have properly received all of the bonuses except for the US Bank Avianca Visa, which posts 8 weeks after the final statement in which the minimum spend is met.

So, the impact to my credit score? After opening the new accounts, it dropped from 820 to 794. This was a pretty substantial hit, although it’s still in roughly the 95th percentile of American credit scores. The more interesting thing is what happened 3 months later after using all of the cards to meet minimum spend requirements and paying off the balances. My credit score went up to 830! I was pretty surprised to see this, and my credit score is now in the top 1% of American households.

The key takeaway? If my experience is any guide, don’t worry too much about the long-term impact to your credit score from opening a bunch of accounts to earn the signup bonus. In my case, there was actually a positive impact from signing up for a bunch of credit cards and going on what amounted to a massive shopping spree. I’m not sure that this is how things should work, but in my case, it’s how they actually did work.

Leave a Reply

Your email address will not be published.