Should I Get a Credit Card Before or After I Move?

credit-card-before-or-after-I-move

If you’re in the process of moving, or know you will be before too long, you probably have a long checklist of things to do before the movers load up all the boxes. If you have “get a new credit card” on that list, you may want to think twice before you file an application.

According to an email from Bruce McClary, vice president of communications for the National Foundation for Credit Counseling, “moving is hectic enough without bringing credit into the picture.”

Timing is Everything

“People who are relocating and considering a credit move should think about timing,” McClary said. “It is far better to apply for new credit well before the move or a while afterward, in order to avoid any problems closing on a mortgage or being approved for an apartment rental.”

But where is that sweet spot?

“While there is no set rule, an ideal buffer may be about six months or more on either side of the relocation,” McClary said. “The bottom line is that too many credit inquiries … could have a negative impact on a person’s credit rating.”

How New Credit Could Affect Your Move

When you apply for a new line of credit, a hard inquiry is generally placed on your profile, which will ding your score. (Your history of applying for credit accounts for 10% of your credit scores.)

“While it may not amount to much, a small drop in a credit score can be the difference for being approved or rejected for some who already are on the margin,” McClary said. “Others may still be approved, but may miss out on the best available terms when qualifying for a mortgage loan.”

Remember, many landlords check a potential tenant’s credit reports and review their credit scores before agreeing to rent out an apartment, so dings to your credit due to a new inquiry could hurt your odds of getting that place, too, particularly if your credit is on the bubble.

You can see how your credit inquiries and spending habits are affecting your credit by viewing two of your credit scores for free, updated every 14 days, on Credit.com. If you discover your credit needs a bit of work, now may not be the time to apply for that credit card. You may also want to consider paying down your debts and disputing any errors you find on your report to help your score rebound.

Don’t Forget…

No matter when you apply, it’s important you don’t let payments fall through the cracks.

“It sounds like a no-brainer, but with all of the confusion and chaos of relocating, even the most alert consumers can be at risk of missing a payment or two,” McClary said. “This can not only cause a problem when the time comes to apply for new credit after the move, but it can have a negative impact on new accounts that were opened beforehand.”

Your payment history is the biggest influencer on your credit, making up 35% of your scores. To help prevent negative damage, McClary advises consumers “set automated reminders and switch to email and online account management if you haven’t done so already.” He said that “even if you prefer paper statements, having online account access is a good backup plan when in transition.”

Sending Your Change of Address Cards

You probably have a list of people to notify that you’ve moved. And, although they may not exactly qualify as your friends, it’s important your creditors are on that list. Not only does letting them know you’ve moved help them keep track of where to send any snail mail, but it is a security measure.

“If your creditor is relying on an outdated address, your normal card activity in your new neighborhood may trigger a fraud alert that could cause them to shut down the account,” McClary said. “Even if the account suspension is temporary, it can still be a big hassle.”

Image: Tinatin1

The post Should I Get a Credit Card Before or After I Move? appeared first on Credit.com.

Can I Apply for More Than One Credit Card at the Same Time?

more-than-one-credit-card

When you go to the hardware store to buy tools, you often find that you need more than one. Likewise, there are also some times when you may feel inclined to apply for multiple credit cards at once.

Sometimes, there are several special, limited-time offers that you want to take advantage of, while other times you may simply need multiple different cards for their unique features. And occasionally, you may wish to apply for both a business and a personal credit card at the same time.

No Big Deal?

There’s nothing saying you can’t apply for multiple credit cards at the same time. Each application is generally considered separately, and it’s not uncommon for some people to be approved for two or three new credit card accounts on the same day. However, there are some potential drawbacks that you should consider before going down this road.

First, each credit card application you submit will result in a hard inquiry on your credit report. And having multiple inquiries for new credit in a short period of time can hurt your credit score, as the scoring formulas can interpret this as sign of potential financial distress.

Thankfully, any drop this causes in most credit scores will be small and temporary, as recent inquiries are not nearly as important to your score as your record of on-time payments or your level of debt is. Nevertheless, it’s best to avoid applying for any new credit cards in the months before completing a new applications for a major loan such as a home mortgage or car loan because you want your credit score to be in the best shape possible. And, if you’re working on repairing your credit, you may want to keep new credit inquiries to a minimum.

Next, you should consider that applying for multiple credit cards at once may reduce the chances of being approved for all of those new accounts, as each card issuer will look at your credit report — and, depending on the time, could see all those recent applications for new plastic. If that’s the case, even if you have an excellent credit score, you may not be automatically approved for each new account (again, issuers may view taking on multiple credit lines at once as a sign of risk), and you may have to speak to a new accounts specialist and explain why you submitted multiple applications.

Finally, you should ensure that you are capable of managing multiple new accounts. Each one of these new accounts will have its own monthly statement that needs to be reviewed, and payments that must be made on time. And if you are applying for multiple new accounts in order to earn sign-up bonuses, you will likely have to complete the minimum spending requirement for each new account — which could lead to overspending if those thresholds are beyond your budget.

Upping the Approval Odds

Whether you’re applying for one or multiple credit cards, issuers will hesitate to approve new applications for credit if they feel you may be in financial trouble. Therefore, the best way to maximize your chance of approval for any credit card is to minimize your existing debt. To do this, pay down your existing credit card balances as much as possible, especially on any accounts you have with the card issuers that you are applying to. And it’s a good idea to wait until your next statement has closed so the lower balance is reflected on your credit report. (Remember, issuers tend to report balances as of your statement’s billing date versus the day your payment is actually due.)

And, remember, a good credit score can help you qualify for the best terms and conditions. (You can see two of your credit scores for free, updated each month, on Credit.com.) So, if you’re looking for a new credit card, you may want to see if there’s anything you can do ahead of filling out the application to improve your standing. You can build good credit in the long-term by making all your loan payments on time, keeping debt levels low and adding a mix of accounts to your credit profile only as your score(s) and your wallet can handle doing so.

[Offer: If you need help fixing errors on your credit report, Lexington Law could help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

More on Credit Cards:

Image: Martin Dimitrov

The post Can I Apply for More Than One Credit Card at the Same Time? appeared first on Credit.com.

Can I Apply for More Than One Credit Card at the Same Time?

more-than-one-credit-card

When you go to the hardware store to buy tools, you often find that you need more than one. Likewise, there are also some times when you may feel inclined to apply for multiple credit cards at once.

Sometimes, there are several special, limited-time offers that you want to take advantage of, while other times you may simply need multiple different cards for their unique features. And occasionally, you may wish to apply for both a business and a personal credit card at the same time.

No Big Deal?

There’s nothing saying you can’t apply for multiple credit cards at the same time. Each application is generally considered separately, and it’s not uncommon for some people to be approved for two or three new credit card accounts on the same day. However, there are some potential drawbacks that you should consider before going down this road.

First, each credit card application you submit will result in a hard inquiry on your credit report. And having multiple inquiries for new credit in a short period of time can hurt your credit score, as the scoring formulas can interpret this as sign of potential financial distress.

Thankfully, any drop this causes in most credit scores will be small and temporary, as recent inquiries are not nearly as important to your score as your record of on-time payments or your level of debt is. Nevertheless, it’s best to avoid applying for any new credit cards in the months before completing a new applications for a major loan such as a home mortgage or car loan because you want your credit score to be in the best shape possible. And, if you’re working on repairing your credit, you may want to keep new credit inquiries to a minimum.

Next, you should consider that applying for multiple credit cards at once may reduce the chances of being approved for all of those new accounts, as each card issuer will look at your credit report — and, depending on the time, could see all those recent applications for new plastic. If that’s the case, even if you have an excellent credit score, you may not be automatically approved for each new account (again, issuers may view taking on multiple credit lines at once as a sign of risk), and you may have to speak to a new accounts specialist and explain why you submitted multiple applications.

Finally, you should ensure that you are capable of managing multiple new accounts. Each one of these new accounts will have its own monthly statement that needs to be reviewed, and payments that must be made on time. And if you are applying for multiple new accounts in order to earn sign-up bonuses, you will likely have to complete the minimum spending requirement for each new account — which could lead to overspending if those thresholds are beyond your budget.

Upping the Approval Odds

Whether you’re applying for one or multiple credit cards, issuers will hesitate to approve new applications for credit if they feel you may be in financial trouble. Therefore, the best way to maximize your chance of approval for any credit card is to minimize your existing debt. To do this, pay down your existing credit card balances as much as possible, especially on any accounts you have with the card issuers that you are applying to. And it’s a good idea to wait until your next statement has closed so the lower balance is reflected on your credit report. (Remember, issuers tend to report balances as of your statement’s billing date versus the day your payment is actually due.)

And, remember, a good credit score can help you qualify for the best terms and conditions. (You can see two of your credit scores for free, updated each month, on Credit.com.) So, if you’re looking for a new credit card, you may want to see if there’s anything you can do ahead of filling out the application to improve your standing. You can build good credit in the long-term by making all your loan payments on time, keeping debt levels low and adding a mix of accounts to your credit profile only as your score(s) and your wallet can handle doing so.

[Offer: If you need help fixing errors on your credit report, Lexington Law could help you meet your goals. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

More on Credit Cards:

Image: Martin Dimitrov

The post Can I Apply for More Than One Credit Card at the Same Time? appeared first on Credit.com.

Do I Have to Activate My New Credit Card? (The Answer May Surprise You)

activate-my-new-credit-card

A lot can happen in the seven-to-10 business days it typically takes a new credit card to arrive in the mail. But if you’re having second thoughts about your chosen plastic, you’d be remiss to think that failing to formally activate the account negates its existence.

Issuers typically ask that new cardholders “activate” their cards by calling them or registering the plastic online once it’s in hand. This requirement helps to prevent someone from scooping the new card out of your mail and taking it on a shopping spree, but it doesn’t serve much of a purpose beyond that.

“Activation is simply a fraud protection measure,” Nessa Feddis, senior vice president and deputy chief counsel at the American Bankers Association, said. “It’s divorced from whether the account is opened or reported [to the credit bureaus].”

In fact, issuers typically start reporting the card to the credit reporting agencies once you’ve been approved. The application will almost immediately generate a hard inquiry on your credit report and, shortly thereafter, the card’s credit limit will factor into your credit utilization rate, whether you abide by the activation request or not.

Interestingly, there’s also a chance the card itself would work at a store, should you try use it without making that phone call or registering online.

“All American Express cards are flagged as pending confirmation of card receipt when a card is mailed. We strongly recommend Card Members confirm receipt when the card arrives to help verify their identity and mitigate against fraud,” a spokesperson for American Express said in an email. “However, because of our relationship with our Card Members, we are able to selectively approve charges that we evaluate to be of very low risk, even if the card receipt has not yet been confirmed. For example, if a Card Member receives their new card, puts it into their wallet and proceeds to use it at their local coffee shop they frequent, we might be able to approve the transaction.”

Making the Call

It’s still in a cardholder’s best interest to activate a new credit card, since that’s the quickest way to ensure you won’t hit any snags when trying to make a purchase. It also minimizes the odds of fraudulent charges.

If you haven’t received a card you applied for, you should notify the issuer — they can tell you if the account has been used and/or send you a replacement. It’s also a good idea to keep an eye on your credit to make sure someone else didn’t run up any balances or commit any other nefarious activity in the interim. You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com. A sudden drop in scores can be a sign identity theft is occurring.

If you are having second thoughts about an account you opened, you should call to formally close the card. Just be aware that doing so might affect your credit score.

Keep in mind, too, an issuer may elect to close a card if it remains inactive long enough, so you may want to address an unwanted account head on (or use it from time to time to make small purchases) rather than weather any damage a sudden, unplanned closure may do to your score. (You can find out more about the effects closing a credit card can have on your credit here.)

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Image: JackF

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