Does applying for a credit card then cancelling it out hurt your credit?

Question

I cannot resist the urge to get an extra $20 bucks off a purchase by applying for a credit card. Then I pay it off and cancel the card. Does this hurt my credit rating? I bought a wet dry vac today at Sears and managed to get $25 bucks off by applying for a Sears card. When I do this I always pay the balance off within 30 days. Should I quit doing this? Should I cancel the card everytime?

Answer 1

I am not sure it it affects your actual credit rating (score) however some financial institutions frown upon people thathave had and closed alot of credit cards

My wife used to work for transunion and this is what she told me, I used to do the same thing

Answer 2

You should quit doing this immediately. Doing it once or twice is no problem. But in the long run, this trend does not have a positive effect on your actual credit score. Every time you open a new card...Ur score drops a notch due to the inquiry into your credit.

After so many times of doing this....getting desired credit will be difficult. All the company sees is a person who has difficulty keeping credit. The score is not impacted much but the history definitely is.

Next time u do that....make it somewhere that you shop often or something like a new computer and pay off 1/4 of the balance each month...or at least 1/6. This way you make some good history and you take advantage of their deals. And after this, you are going to want to keep the card open when you see the effect it has on your score.

Answer 3

Applying for a card will drop your scores since they will pull a hard inquiry to either approve or deny you.

As long as you make sure that they put "closed by consumer" on your reports, closing it won't hurt as long as it is a fairly new card. It will hurt with an older card since you would be losing history.

But, if you do that often, many creditors will start shying away from granting you credit because of your history of opening and closing accounts.

I would say, you've already taken a ding on your reports by applying, why not pay in full and throw the card in your sock drawer instead of closing it. Pull it out around every 6 months and make a small purchase - like a pair of socks lol. Then throw it back in the sock drawer and pay in full.

By keeping it open and in good standing, it will help your credit.

Answer 4

the following is why canceling playing cards can damage your score, especially. Your credit status, with the exception of on-time bill funds, is in accordance to 2 different variables: your earnings to debt ratio and your debt to credit available ratio. for that reason, in case you cancel the playing cards, enable's say each card is granting you a minimum of a $5,000 credit reduce, you're lowering your available credit through very nearly $15,000 even as your different expenditures stay a similar. If on that very last card you've it maxed out (that you're saying you do not, yet as an get mutually), then yeah this would reflect badly. If even with the undeniable fact that you'll get rid of the soundness on your fourth card, even per chance ask the cardboard organization to augment your reduce when you're taking into consideration conserving it and also you qualify, then slowly cancel the different 3 playing cards one after the different, this can placed you in extra constructive structure. nevertheless, the very truth you had almost 4 charge playing cards on your record is going to chew you slightly finally, yet credit does heal with time. in case you have not considered your credit record in a lengthy time period, i'd attempt making particular you have not any mastercard debt and cancel one in each of them. Then a month later, examine your credit record (you'll get a credit record for loose once a year). See the position it falls. something above 650 is seen an excellent score, so when you're above that, i'd imagine you'd be fantastic to get rid of the others too.

Answer 5

Cancelling a card should not affect your credit rating, as long as you have paid any outstanding balance. I think you're smart by taking advantage of Sears: if they're dumb enough to make the offer, you should have no qualms about accepting it. I don't think there's anything in a credit card contract that says you have to keep it for a minimum period of time.

Answer 6

I don't think it will hurt your credit...it won't help your credit either though. The only thing I suggest is to watch out for the fine print...some credit companies have an early cancelation fee. And it can at times be pretty excessive.

Answer 7

Yes it does but not by much. For one applying for new credit and getting it drops your score slightly because it shows you are taking on new debt. Then cancelling it drops it slightly because it shortens your open credit history. These are generally temporary drops so overall it shouldnt affect your score much but the repeat pattern might seem a little wierd to someone examining your credit for larger loans.

Answer 8

try not to cancel your credit cards, simply not use them after you pay them off. they are building your credit and applying for to many is not good also. use your common sense.

Answer 9

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