How often should you apply for a credit card?

When it comes to how often you should apply for a card, there’s no one-size-fits-all answer. Some experts recommend waiting at least six months between applications. The Consumer Financial Protection Bureau (CFPB) doesn’t put a timeline on its advice, saying the decision should be based on need.

What you’ll learn:

• Credit card issuers have their own rules about applications and accounts, but it’s generally recommended to space out applications.

• A new credit card application typically triggers a hard inquiry, which may temporarily lower credit scores by a few points. 

• Several hard inquiries in a short time may have a more significant impact on credit scores. 

• Checking whether you’re pre-approved for a card could help you avoid unnecessary hard inquiries.

Deciding when to apply for a credit card varies from person to person. But Experian® and Bankrate suggest waiting six months before applying for additional credit cards. That’s because applying for a new card could result in a hard inquiry, which happens when a lender checks your credit file. 

Spacing out credit card applications can help protect your credit scores from the negative effects of multiple hard inquiries.

Some card issuers have limits on how often you can open a new account. Here are a few examples. 

• The 5/24 rule: For some issuers, applicants can’t open more than five new credit card accounts in 24 months.

• The 2/3/4 rule: According to this rule, issuers may limit applicants to two new cards in 30 days, three new cards in 12 months and four new cards in 24 months.

• The six-month or one-year rule: Some credit card issuers may let borrowers open a new credit card account only once every six months or once a year.

There’s no set number of credit cards you can apply for at once, but each credit card application can trigger a separate hard inquiry. 

According to the CFPB, applying for several credit cards over a short period of time may lead to lenders thinking your financial situation has taken a negative turn. That’s why the CFPB recommends applying only for the credit you need.

Opening a new credit card may affect your credit scores. And even if you don’t open a new account, applying could also cause a small impact. That’s because when you apply for any kind of loan, the lender will likely look at your credit reports and scores to determine whether to approve your application and what terms to offer.

Companies like FICO® and VantageScore® calculate credit scores differently. But their general approach is the same.

A new credit card might cause your credit scores to drop if it:

• Triggers a hard inquiry: FICO says a hard inquiry could lower most applicants’ scores by five to 10 points on average.

• Reduces length of credit history: The age of accounts on your credit reports contributes to your credit scores. When you open a new credit card, your average age of accounts and the age of your newest account could be lowered.

A new credit card could cause a slight, but immediate, dip in your credit scores. But over time with responsible use, you could use the card to build your scores by improving these credit-scoring factors:

• Payment history: Payment history is one of the most influential factors in determining your credit scores. But it’s dependent on paying your credit card statement on time every month.

• Credit utilization ratio: Opening a new credit card can increase the amount of credit available to you. In turn, this could lower your credit utilization ratio if your spending habits remain consistent.

• Credit mix: The variety of credit accounts, including revolving accounts like credit cards, you manage is called your credit mix. Showing the ability to manage multiple types of loans can help your scores.

Here are some things you might consider doing before you apply for a new credit card.

Some issuers allow you to check for pre-approved card offers before you apply. Getting pre-approved can show you which cards you may be eligible for without triggering a hard inquiry. 

Checking whether you’re pre-approved with Capital One is quick, and it won’t hurt your credit scores. It requires only some basic information, such as your legal name, address, Social Security number, employment status and income.

One way to track your credit for free is with CreditWise from Capital One. CreditWise has tools to monitor your credit and stay on top of changes. And using it won’t affect your credit scores. If you’re unsure about how your credit scores could be impacted by opening a new account, CreditWise also has a credit score simulator to help you plan.

You can also get free copies of your credit reports from all three major credit bureaus by visiting AnnualCreditReport.com.

The CFPB recommends comparing credit cards before you apply. You might consider looking into things like:

• Annual percentage rates (APRs)

• Annual fees

• Rewards 

• Bonuses

How often you should apply for a credit card depends on your personal finances. But the CFPB says to apply only when you need credit to avoid unnecessary hard inquiries.

New to credit or searching for your next credit card? Capital One can help.

• See if you’re pre-approved for credit cards without harming your credit scores. 

• If you’re looking to build your credit with responsible use, explore cards for people with fair credit. 

• Earn rewards on every purchase, every day, with a cash back rewards card. 

• Monitor your credit report and score with CreditWise. It’s free, and using it won’t hurt your credit.