Big financial decisions aren't made on a whim – and they shouldn't be.Whether you're purchasing a house or buying a new car, these are significant decisions that will have an impact on your life for years to come. Taking time to think things through and weigh the pros and cons is a wise financial move.
While not quite the same as committing to a 30-year mortgage, deciding when to get your next (or first) credit card is another financial decision that shouldn't be made lightly .
Whether you're planning for a vacation, getting ready for a major expense, or just trying to take advantage of an attractive sign-up bonus – opening a new credit card is all about timing. If you plan it right, new credit cards can be extremely lucrative, but these kinds of decisions shouldn't be made on the spot at the front of a Macy's checkout line.
It's important to be strategic with both when and how often you open a new credit card in order to ensure you maximize all the benefits a credit card can offer.
Here are some things to consider before applying for your next (or first!) card.
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Building Credit
If you're in the market for your first credit card, the best time to apply is whenever you're ready to handle the responsibility.
We preach this at every turn, but it bears repeating: Credit cards are serious business. No matter how attractive the perks, rewards, or other benefits of a card are, they're not worth digging yourself into debt. The temptation to overspend with a credit card can often be magnified for young adults who haven't yet seen the long-term impacts of credit card debt. If you recently turned 18 you're likely eligible for your first card, but it's best to wait until you're sure you can handle it before applying.
Having said that, the earlier you start building your credit, the better off you'll be. That's because a decent chunk of your credit score is made up by “length of credit history”. Applying for your first card as soon as you're ready for the weight of managing your spending and making a monthly card payment can be a smart move for your long-term financial future.
A great starter card for anyone looking to build their credit is the *freedom unlimited* . This card earns a base 1.5% cash back on every dollar spent and even rewards you further by offering 3% cash back at restaurants and drug stores, along with a whopping 5% cash back on travel booked through the Chase Travel Portal.
Learn more about the *freedom unlimited* .
The cashback this card earns can get even more valuable down the road if you pair your Freedom Unlimited with a more premium Chase card , like the *csr* . Doing so will allow you to turn your cash rewards into valuable Chase Ultimate Rewards and then you can redeem points in other ways like transferring to Chase's stable of transfer partners .
Travel Perks
Timing your next credit card with a big family vacation, in order to capitalize on all the card's travel perks, can be a prudent move. The fancier the card, the more perks it's likely to have.
From free checked bags for the whole family and access to airport lounges to annual travel credits and reimbursement for the cost of TSA PreCheck or Global Entry, these are just a few of the benefits some cards offer. If any of those things are something you'd otherwise be paying for out of pocket, it might make sense to instead get a credit card that will cover the cost for you.
Keep in mind that sometimes you need to actually pay for your vacation with the new card in order to get the benefits while in other situations, you simply need to have it by the time you travel.
Checked Bags
Many co-branded airline cards will get you at least one free checked bag when traveling domestically and this can be key to saving big on your next vacation.
Considering most airlines charge a minimum of $60 roundtrip for a checked bag, this benefit will nearly cover the card's annual fee for one person alone – and if you're booking flights for a family or group, the math works out even better. Depending on which airline you're traveling with, you may need to pay for your airfare with the card in order to take advantage of this benefit – while others will pass along the savings for simply having the card by the time you travel.
Another airline-dependent factor is just how many bags you'll get for free with your co-branded card. With a card like the *delta gold* , you'll get a free checked bag for yourself and up to eight additional passengers on the same itinerary. But the comparable *united explorer* will only get you a free checked bag for yourself and one companion. Depending on how big of a party you're traveling with, this may or may not be an issue.
Check out our airline-by-airline rundown of the best cards for getting free checked bags !
TSA PreCheck or Global Entry
There's no argument that having either TSA PreCheck or Global Entry will make traveling easier. But before you race out to sign up the whole family , make sure you're paying for it with the right card.
If you're unfamiliar with TSA PreCheck, you can think of it as an express lane for getting through airport security. Instead of taking your shoes off and pulling all your liquids and electronics out of your bag, travelers with PreCheck simply get to put their stuff on the conveyor belt and walk through a metal detector. Global Entry automatically comes with TSA PreCheck, but also includes expedited immigration when returning to the U.S. from abroad.
Many travel rewards credit cards will reimburse you for enrollment in either of these trusted traveler programs – but if you don't already have one of those cards in your wallet, getting one before enrolling can save you a bunch of money.
Lounge Access
Having lounge access can come in clutch for a long layover or flight delay, but paying for access is costly – like really costly. Thankfully, if you carry the right credit card in your wallet , you just might be able to access one of these lounges for free.
If you know before a trip that you're going to have a long layover, picking up a new credit card that will get you access to an airport lounge at whichever airport you'll be killing time would make a lot of sense. Some credit cards will even get the whole family in the door for just one annual fee!
Read more: The Ultimate Guide to Priority Pass Lounges
Travel Credits
Many of the top travel credit cards on the market include credits for things like paid seat assignments or in-flight purchases . Others like the *venture x* will allow you to book flights or hotels through their travel portal and be reimbursed down the road. And the *csr* makes it easier than any by simply reimbursing $300 of travel expenses once they post to your account.
Regardless of which type of travel credit you have, they all go a long way to justifying a card's annual fee and in many cases, pay for themselves time and time again.
If you're planning a trip and can make good use of a card's annual travel credit, the rest of the card's benefits just become the icing on the cake.
Big Expenses
Whether your washing machine is on the fritz or your car needs new tires, life can be costly. Sometimes when life hands you lemons you don't have time to apply for a new card before forking over whatever exorbitant amount of money will solve your problem. But when you do, earning a bunch of points or miles can be a nice consolation prize for an otherwise unpleasant experience.
So what are some big expenses that a new card would make sense for?
Home renovations or repairs are common ones. Anyone who's been through a remodel can attest to the sky-high prices for building materials these days. If you've been saving up for a big project and are already planning to spend a bunch of money, first applying for a new credit card to take advantage of a big welcome offer bonus can make a lot of sense.
Photo courtesy of Greyson Joralemon via Unsplash
After you finish up with your renovations, odds are you'll want some new furniture for your redesigned space – this is another major purchase that can warrant opening a new credit card beforehand.
Having a baby is another good opportunity to open a new credit card and earn a pool of points in the process – after all, kids only fly free for so long . It's no secret that children are costly, and like it or not, the costs start adding up the moment you enter the hospital to deliver that bundle of joy. Even with the best health insurance, you're likely to owe the health system thousands of dollars out of pocket for your hospital stay. Paying off that medical bill with a new credit card can help make the price tag feel a little more tolerable.
Check out our guide to responsibly meeting minimum spending requirements for more ideas on when to get a new card !
An Attractive Welcome Offer
Even with the best-laid plans, life is sure to throw you some surprises. With the banks constantly changing the welcome offers on their credit cards – sometimes the best plan is to sit back and let the bonuses dictate when you sign up for a new card.
If a certain card has been on your radar and the benefits seem to line up with your travel plans or spending habits, it would make the most sense to apply when the bonus is at its highest .
Just keep in mind that you only get one shot at a welcome offer. If you apply for multiple new cards in a short period of time, you need to be sure you have a plan in place to meet the minimum spending requirement – without spending more than you normally would. You should never charge more to a credit card than you can afford to pay off immediately.
Before applying for a new card, make sure you're eligible by checking our bank-by-bank application rules !
How Soon Should I Apply for My Next Credit Card?
A common question we get asked is, “How soon should I apply for my next card?” Unfortunately, there's no cookie-cutter answer to this one.
Determining when it's the right time to get a new card will always vary from person to person and depends on your own individual situation. But a good rule of thumb would be to allow at least 90 days between applications.
Additionally, each bank has its own rules in place to try and keep things in check. For example, American Express won't approve you for more than two credit cards within 90 days . And then there's the infamous Chase 5/24 rule . This is a steadfast rule that means you'll automatically be declined for a new Chase credit card if you've opened five or more new cards in the previous 24 months – with any bank, not just Chase.
Other banks like Citi limit new card approvals to one every eight days – and a maximum of two new cards every 65 days. Capital One is notoriously inconsistent with its rules, but one thing seems clear, you can only hold two personal credit cards with the bank at any given time.
If you're able to stick within these guidelines and go at whatever pace is comfortable you're comfortable with – you should be just fine.
Read next: Turned Down for a Credit Card? Here's What to Do Next
Bottom Line
Opening a new credit card is a big decision and one that shouldn't be made lightly.
How often and when you should apply for a new credit card varies from person to person, but taking these factors into account can help you make your decision.
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