Planning for My First Credit Card App O Rama
This is the first part of a three part series on My First Credit Card App O Rama. 5 cards to apply for, $13,000 to spend and the potential to receive 250,000 points, $200 in statement credit and 8 airport lounge passes!
Anyone who reads my blog or knows me personally knows that I love free stuff. In fact, the less I have to work and the more I can get, the better. For the past couple years, I’ve been using Slickdeals to keep my eye out for the best credit card sign-up bonuses and there have been some great ones that came along. I rarely applied for more than one card every few months but my credit score was doing well and I was getting approved for every single card I applied for. Most of these cards came with $400-$500 sign up bonuses in cash or gift cards and best of all they were all tax free.
I was pretty content with the little operation I was running, I was averaging a couple thousand dollars a year in extra income for about an hours worth of work(per year). I never bit off more than I could chew and since I tend to spend about $1,000 a month on my credit card, it was pretty easy to meet all of the spend requirements. That all changed one day though, when I discovered FlyerTalk. Flyertalk is the largest travel community on the web and you can get advice on everything from travel help to credit card sign up offers to information on loyalty programs. I was literally in heaven since I discovered a whole world of like minded people who made what I’d been doing look like child’s play
Basics of a Credit Card App O Rama
On Flyertalk, I learned about the term App O Rama(or AOR), a strategy of applying for multiple credit cards in one day in order to maximize the likelihood of getting approved for all of your applications. Since it often takes some time for an inquiry to be reported to the credit bureaus, by doing all your applications in one day you increase your chances for getting approved since each credit card company won’t see the other inquiries until you’ve already been approved.
I’d never done a true credit card AOR until a few months ago but I can say that it was definitely pretty exhilarating. Most people will wait 90 days in-between AOR’s since that’s when inquiries tend to fall off your report but I suggest spacing them out a little further to start.
Preparing Your Credit Score
I don’t think people believe me when I tell them I have 21 credit cards, a 763 credit score(Credit Karma) and I’ve never been declined for a card, but it’s true. Just like with any good thing in life, the key with credit card applications is to apply in moderation. I only apply for the best and most rewarding offers and I always do my research. I make sure that my credit score and report are in the best possible shape before I apply.
Contrary to popular belief, opening a large number of credit cards is not that bad for your score. Initially, you’ll see a small drop(2-8pts) per card for the hard credit inquiry and the lowering of your average age of accounts(AAOA) but it’s only temporary. Hard inquiries will be removed from your credit report after 2 years(or less) and since there are three credit bureaus(Experian, Equifax and TransUnion), not every credit card company will pull from all three bureaus when you apply. So for example, if Citi only pulls Experian reports and Amex only pulls Equifax reports then when you apply for a new card they would not see the other company’s inquiries.
When you open a new card, that obviously lowers the AAOA, but over time, as the card gets older, your AAOA will go back up. That’s why using the Authorized User trick can be a huge advantage to your score. Remember, you always want to keep your oldest cards open as long as possible. That way, when you open a new card, your AAOA won’t be affected as much.
Free Scores and Free Reports
I use Credit Karma and Credit Sesame to check my credit score. Although they don’t give you the exact credit score that the credit card companies will pull, it’s a very good approximation and should give you a good idea of where your credit stands. A 700+ score is required for many of the top offers but there are still quite a few cards that you can apply for and be approved for with a 600+ score.
I like to stagger my three free credit reports from annualcreditreport.com so that I get one every four months. Since that’s about when I do my AOR’s, it works out perfectly. I’ll take a look and see how many inquiries I have and determine which cards I’ll have the best chance at being approved for. Certain companies are much more strict than others when it comes to inquiries so you need to plan accordingly(another great resource is the forum at creditboards.com).
In part 2 of the series on My First Credit Card App O Rama, I’ll discuss which cards I decided to apply for and why. I’ll take a look at things like which cards I already have, the annual fees and of course the sign-up bonuses offered by each card. Stay tuned!
-Harry @ PF Pro