How long should you wait before applying for another credit card?
Just look through our credit card reviews, and you'll see cards that are great for dining out, fueling up your car or transferring your balances. However, what if you just opened a new credit card?
Unfortunately, sending out too many card applications in too short a period of time can lower your chances of getting approved and may hurt your credit scores as well. For a rundown of why you should spread your credit card applications out and guidelines on how long you should wait between them, keep reading.
A matter of inquiries
Credit inquiries are the key factor that limits how often you can apply for credit cards. When you send in an application for a loan or credit card, the lender you're applying with will pull your credit reports using a hard credit inquiry. Unlike soft inquiries, hard inquiries show up on your credit reports and stay there for up to two years, essentially creating a record of the credit you've sought.
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With certain kinds of loans, such as auto loans and mortgages, multiple hard inquiries made in the same period will only count as one item on your credit reports, which lets you shop around for the best interest rates. However, when you're applying for credit cards, every hard inquiry gets counted as a separate item, so applying for a bunch of cards at once will generate a flurry of inquiries on your credit reports.
Lenders view having a lot of recent hard inquiries on your credit reports as a sign of risk. It shows that you're aggressively seeking credit, which could indicate that you're in a desperate financial situation. People with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports, according to my FICO. Not only that, but hard inquiries can also affect your credit scores, as 10% of the widespread FICO credit scoring system is determined by your number of new credit accounts and hard inquiries. One hard inquiry may only ding your credit by a few points, but a slew of them can noticeably harm your scores.
How long to wait between applications
Assuming you recently applied for a credit card and had your application accepted, a good length of time to wait before applying for another credit card is around six months. This is enough time to show that you're able to use your latest card responsibly and that you're not just acquiring as much credit as possible so you can spend recklessly. Depending on your credit health, though, that guideline can change.
Since the number of hard inquiries on your credit reports is only one of the many variables that credit card issuers look at when deciding whether to approve your application, consumers with higher credit scores can apply a bit more frequently and still find success.
If your credit is excellent, you always pay your bills on time, and you have a low credit utilization ratio, you could try applying for another credit card after only waiting three months. Conversely, if your credit isn't so great, you may want to wait a bit longer between applications, like nine months. During the waiting period, make sure you pay your current credit card bills on time (and in full, if possible).
Additionally, some financial institutions have their own policies dictating how long you have to wait between applications. For example, Bank of America will apparently only approve customers for two of its own cards within a two-month period, three of its own cards within a 12-month period and four of its own cards within a 24-month period. Chase's supposed unofficial rule even restricts your application frequency based on cards you've opened with other credit providers, apparently denying all applications from people who have been approved for five or more credit cards within the past 24 months.
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If you already have a credit card from a certain financial institution and you want to apply for another one of its cards, you should definitely look up that institution's application policies. In the event you can't find them, consider calling the issuer to ask (note that they may not share this information with you) or double the time you would normally wait between applications just to be on the safe side (for instance, if you normally wait six months between credit card applications, wait one year instead). Lenders are often wary of extending multiple lines of credit to a single person too quickly.
If your application gets rejected
These timing suggestions assume you are being approved for the cards you apply for. If you are rejected for a credit card, though, you should pump the brakes and take some extra time between applications. A rejection indicates that you have recently applied for too many cards or that there is another problem with your credit reports. Either way, applying for more credit cards in this situation can only hurt your credit.
Instead, it's better to contact the credit card issuer that rejected your application and ask for a detailed reason why -- note that issuers are legally required to tell you why you were denied via an adverse action letter. At the same time, you can ask the representative you're talking to for a reconsideration, which can give you another chance at being approved.
During a reconsideration, be ready with information about your personal finances, such as your income and current debt obligations, and have responses in mind if the representative asks you why you want the card or why you think your application should be approved. Once you figure out what was wrong with your rejected application, try to rectify the issue and wait a bit longer than usual before applying for another credit card.
It may be tempting to send out a bunch of credit card applications at once, but taking it slow and applying for one card at a time will improve your chances of being approved.
[This article was first published on The Simple Dollar in 2020. It was updated in March 2022.]