Back to back credit card applications for earning airmiles

nadirnwo

Hi,

I follow some forums over at Flyertalk and alot of the posters there talk about how to use credit cards to get airmiles or points for hotel stays. Alog of them suggest applying for several cards quite close to each other or whenever a new offer comes along.

I am more curious than anything else, but they all say that this has negligible impact on credit scores. Is it that the US credit scoring system is different to here in the UK? Advice here is always to space out applications as it affects ones credit score.

Is there a difference between the US and UK? Would several applications for CC in the UK lead to a big fall in credit availability?

[Deleted User]

I think it depends on what you mean by a lot of applications.

Bear in mind that most reward cards have minimum spending requirements in order to qualify for the welcome bonuses so you don't want to overstretch yourself too much in too short a space of time.

An application every couple of months is probably fine. For example this year I have applied (and been accepted) for:

Amex Gold (Feb)
Santander 123 Current Account (Not a CC but still a credit search - March)
MBNA American Airlines card (April)
Amex SPG (July)

nadirnwo

Thank you. I know they are no hard and fast rules, but the attitude towards applying for credit products seems totally different in the US. No qualms with applications in quick succession.

DunPin

nadirnwo wrote: »

Is there a difference between the US and UK?

Yes. Doing multiple applications in quick succession will lead to rejection of application based on the fact that lenders will see you as desperate for credit. Also the US has the whole churning scene that the UK doesn't have.

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Out of curiosity, what cards are you looking at?

superstud

churning scene?? what's this?

DunPin

superstud wrote: »

churning scene?? what's this?

Churning is where you apply for cards for the welcome bonus then cancel them (although not always) after you've hit the spending targets and gotten the miles/points, its very big in the US but not here.

Deadbeat

It's applying for rewards cards with the most generous signup offers (eg 50,000 rewards points), meeting any minimum spending requirement and then closing them again. I did a similar thing with Amazon credit cards several years ago when they offered good money-off offers for signing up.

EDIT DunPin beat me to it!

nadirnwo

DunPin wrote: »

Yes. Doing multiple applications in quick succession will lead to rejection of application based on the fact that lenders will see you as desperate for credit. Also the US has the whole churning scene that the UK doesn't have.

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Out of curiosity, what cards are you looking at?

Basically, AMEX cards and some of the MBNA airline cards. I have never paid interest on my CC, so while not profitable for the banks, I do have a solid credit history.

I thought of trying to attempt something like the following (obviously with UK CC's in mind) http://www.frugaltravelguy.com/2013/08/travel-challenge-business-class-to-bangkok-and-koh-samui-for-103.html

But if churning isnt something that works in the UK and if I am likely to get rejected then it wouldnt work.

Interested to know whether this is just a cultural difference or whether the UK credit market is setup differently.

nadirnwo

Also, rewards are way more generous in the US as compared to the UK. For example the UK AMEX SPG Card has a higher annual fee and lower rewards points than the US equivalent.

izools

In the US credit scoring is standardised - lenders use the FICO scoring system across the board, so typically - at least more so in the UK - if you're likely to pass the credit scoring for Card A, you'll pass it for cards B, C, and D, too.

[Deleted User]

izools wrote: »

In the US credit scoring is standardised - lenders use the FICO scoring system across the board, so typically - at least more so in the UK - if you're likely to pass the credit scoring for Card A, you'll pass it for cards B, C, and D, too.

This is correct. The US system is far more formulaic. You actually have a real credit score number (unlike the ones peddled by Experian etc over here). Each application will reduce your credit score by X for Y amount of time but as long as you remain above the score for the card you want then it's ok. That's my understanding anyway.