Reasons to apply for multiple credit cards at once
The most common reasons to apply for multiple credit cards at once are:
- To earn more sign-up bonuses
- To earn more purchase rewards
- To boost your available credit
These can all be good reasons, especially with how easy it is to apply for a credit card online. To see if any of them make sense for you, let's learn more about each one.
Earning more sign-up bonuses
Sign-up bonuses are introductory credit card bonus offers available to new cardholders. For example, some cards offer a $200 cash bonus if you spend $500 in the first three months. These are one of the most valuable credit card benefits, but the best ones are often only available for a limited time.
Rewards enthusiasts sometimes decide to open multiple cards with bonuses simultaneously. Why limit yourself to one bonus if you can get two or more? This also ensures you snag limited-time bonuses before they expire.
The key here is to make sure you can meet all the bonus requirements. If each bonus has a separate spending minimum, add those up and see if your regular spending will be enough.
Earning more purchase rewards
Rewards credit cards earn some type of reward on your purchases. Depending on the card, rewards can be cash back, points, or miles.
Many of these cards earn a higher rewards rate in bonus categories, like groceries or dining. Others earn a flat rate, such as 2%, on purchases across all spending categories.
If you don't mind keeping track of which cards to use for different purchases, combining rewards cards can be a great way to save more money. Instead of just applying for one type of credit card, you could get a grocery card, a dining card, plus a flat-rate card to use everywhere else.
Boost your available credit
Every time you're approved for a credit card account, that's a new line of credit you can use. If you get approved for two new cards, each with a $1,000 credit limit, you have $2,000 more in spending power.
This can be a good or a bad thing. On the one hand, you need to be careful not to spend more because of that additional credit. Otherwise, you risk ending up in credit card debt.
Having more credit can be helpful if you have lots of monthly bills and you've been getting close to your credit limit. Another benefit of more credit is that it can help your credit utilization ratio, an important factor in your credit score.
READ MORE: What Is a Credit Utilization Ratio?