Credit Card Programs - Should I start churning at a young-ish age?

I'm in my early/mid-20s with a good full-time job and a 740 on CreditKarma. My credit history started about 4-5 years ago.

If I start churning, I'll jump from 3 open accounts to 6, and it'll halve my "average age of open accounts" from 2.5 years to 1.25 years. I owned my closed accounts for about 1 year each.

Is it really okay for me to churn every 90 days? I figure a high percentage of cards I'd be applying for would be cards I'll cancel within the year due to annual fees.

I'm in my early/mid-20s with a good full-time job and a 740 on CreditKarma. My credit history started about 4-5 years ago.

If I start churning, I'll jump from 3 open accounts to 6, and it'll halve my "average age of open accounts" from 2.5 years to 1.25 years. I owned my closed accounts for about 1 year each.

Is it really okay for me to churn every 90 days? I figure a high percentage of cards I'd be applying for would be cards I'll cancel within the year due to annual fees.

You may better start your first churn now. But your second churn should be at least 6 month apart.

That makes sense I guess. Are 3 cards with the different credit bureaus okay? Or should I just limit myself to 2? 1?

I should have also pointed out that I got denied for the Ink Bold due to not having a long average (business?) credit history

Finally, how does churning affect stuff like applying for housing loans?

You may better start your first churn now. But your second churn should be at least 6 month apart.

Agreed, eventually you can get on a 90 day cycle but I would wait at least a couple of years. Most of the people that are on 90 app cycles have 10+ years of credit history, and they also have a solid base of cards that stay open to help with their AAoA.

Saw your post after I posted, you need to shut down credit apps about a year before a mortgage app.

If your parents have good credit get them to add you as an authorized user on their oldest account. It will eventually show up on your credit report and can dramatically increase the average age of your accounts. My oldest account on file is older than me.

I am actually just going for a condo loan but I'm assuming they're treated the same... Dang it!! I've been reading travel blogs for almost a year now but only 70k UR points to show for it... I'm so jealous of all the points I could potentially be missing from CC sign-ups!!!

I sorta got my parents into miles & points when I got my dad to sign up for the Ink Bold (and add me as an authorized user). So with the IB, my average age of accounts is actually going to go down? hahaha.....:(

I still would like to know how many cards I should apply for in this upcoming churn (I'll stop after this one)

I am actually just going for a condo loan but I'm assuming they're treated the same... Dang it!! I've been reading travel blogs for almost a year now but only 70k UR points to show for it... I'm so jealous of all the points I could potentially be missing from CC sign-ups!!!

I sorta got my parents into miles & points when I got my dad to sign up for the Ink Bold (and add me as an authorized user). So with the IB, my average age of accounts is actually going to go down? hahaha.....:(

I still would like to know how many cards I should apply for in this upcoming churn (I'll stop after this one)

If you're in the middle of the mortgage process, I would not apply for anything. New inquiries, especially credit products will come under a lot of scrutiny by the underwriting office. They will want to know why exactly you need all of this unsecured credit when you're about to get a mortgage.

I think you would be ok to apply for cards. You just need to be a little bit more patient. How about one card every 3 months? And start with cards you think you'll keep (either no fee or low fee and worth the cost) that way over time you can let the earlier cards age and show issuers you aren't just a churner. For example I'd start with SPG Amex with only $65 fee, you can keep that one for years. There are rumors the bonus on that card will be going up 30k pretty soon. Then in a few months if the Freedom card bonus comes back up take that one. Not huge bonuses, but cards you can keep. Then in a few more months move on to some other cards.

Also, how much card apps impact mortgage apps is somewhat of an open question. There are a few threads here discussing this.

I think you would be ok to apply for cards. You just need to be a little bit more patient. How about one card every 3 months? And start with cards you think you'll keep (either no fee or low fee and worth the cost) that way over time you can let the earlier cards age and show issuers you aren't just a churner. For example I'd start with SPG Amex with only $65 fee, you can keep that one for years. There are rumors the bonus on that card will be going up 30k pretty soon. Then in a few months if the Freedom card bonus comes back up take that one. Not huge bonuses, but cards you can keep. Then in a few more months move on to some other cards.

Also, how much card apps impact mortgage apps is somewhat of an open question. There are a few threads here discussing this.

For someone with a 4 year credit history and only 3 open accounts it will be more of a problem than someone who has a 10+ year credit history. I agree with mixing in a few bonuses such as the SPG and Freedom cards but you need a solid 3-4 cards that can age together for credit reporting purposes. Which also brings up the question, OP, are your 3 open accounts credit cards? Or other loans?

I'm not applying for a loan for my condo until late 2013 so presumably I can do a churn.

Applying for 1 card (or 2? haha) that I'll keep permanently sounds like a good idea but I'm not sure which one. I thought about SPG and its 30k bonus but I'm very satisfied with my Chase Sapphire Preferred and I'm not sure if I can justify paying two annual fees. Freedom is a free card but has a really weak sign-up bonus.

My 3 open credit cards are a 2% cashback card (2008), Amex Blue (2008) and CSP (2011). I do the whole 5x thing with dad's ink bold + prepaid cc. I've never had a loan

I'm not applying for a loan for my condo until late 2013 so presumably I can do a churn.

Applying for 1 card (or 2? haha) that I'll keep permanently sounds like a good idea but I'm not sure which one. I thought about SPG and its 30k bonus but I'm very satisfied with my Chase Sapphire Preferred and I'm not sure if I can justify paying two annual fees. Freedom is a free card but has a really weak sign-up bonus.

My 3 open credit cards are a 2% cashback card (2008), Amex Blue (2008) and CSP (2011). I do the whole 5x thing with dad's ink bold + prepaid cc. I've never had a loan

Having that Amex blue changes things, Amex is the only company that backdates new accounts to your original membership year. For example, an account open August 2012 would backdate to August 2008 not showing up as a new account. It would also assist with keeping your AAoA above 2 years.

If you're not applying for a mortgage until late 2013 you can do 2-3 now and 2-3 at the beginning of 2013. Try the US Airways Barclays card, it gives 10k miles for each year you have the card, essentially canceling out the AF. You could also go after the AA citi cards, which in all likelihood you could probably get a statement credit or AF waived each year. Make sure you find the links for these apps around here instead of using lesser offers.

I'm not applying for a loan for my condo until late 2013 so presumably I can do a churn.

Applying for 1 card (or 2? haha) that I'll keep permanently sounds like a good idea but I'm not sure which one. I thought about SPG and its 30k bonus but I'm very satisfied with my Chase Sapphire Preferred and I'm not sure if I can justify paying two annual fees. Freedom is a free card but has a really weak sign-up bonus.

My 3 open credit cards are a 2% cashback card (2008), Amex Blue (2008) and CSP (2011). I do the whole 5x thing with dad's ink bold + prepaid cc. I've never had a loan

I agree with SPG, because of the AMEX backdating. You may also consider AMEX HHonor (https://www262.americanexpress.com/apisites/microsite/apply/hilton-hhonors-card/71-1000-148#tcm:30-387790) which has 50k bonus, and no AF. You may get an upgrade offer for Surpass with some extra bonus.

oh really.....so I should apply for only amex cards? What if I get an amex and then cancel later (citi aa amex? Boa virgin America amex?). Maybe Hilton amex makes sense but I would much rather have miles than hotel points. Spg is so tempting right now (aka with a 30k offer) and maybe even Barclay, assuming it's a diff credit agency

oh really.....so I should apply for only amex cards? What if I get an amex and then cancel later (citi aa amex? Boa virgin America amex?). Maybe Hilton amex makes sense but I would much rather have miles than hotel points. Spg is so tempting right now (aka with a 30k offer) and maybe even Barclay, assuming it's a diff credit agency

Backdating only works with actual American Express cards, not amex network cards (Citi, BOA, etc.).

I would probably do Barclays (will pull transunion most likely), SPG (will pull experian), and both AA cards (credit pull depends on where you live). That will likely result in only 3 inquires for 4 cards but the backdating Amex will help offset your AAoA ding. You will also have your inquiries spread out across 2 or 3 agencies.

From what I've read, a credit score of 740 and above is considered excellent. However, I learned recently that a score of 770 and above gets an even better rate.

For example, 770+ is 4.00 for a 30-year while anything below 770 is 4.18. Of course, I only found this out after I applied for a credit card and my score dipped below 770! For the amount I'm borrowing, that amounts to a six-figure difference in interest over the life of the loan...all for applying for CCs I could have waited on. Something to keep in mind...

Thank you love2ft, I'll definitely keep that in mind. I'm not looking for a permanent place, just a condo for a few years. Also 740 is my CreditKarma score, where I have a "D" in average age of open credit lines, an "F" in total accounts, and an "A" in everything else. I'm unsure of this , but I think creating a new account will help offset the pull?

My AAoA is 3 years, not 2.5 like I said originally. If I get SPG and another card, my AAoA will be 3.25 years next year. If I don't get any cards at all, it would be 3.3 years.

I don't think the 10k miles/anniversary is a feature anymore for the Barclays card though. So hold onto your card longhorn11!!

Finally, how does churning affect stuff like applying for housing loans?

It will hurt. I would recommend not churning for at least a year ahead of applying for a mortgage; start that year with the maximum credit available. With a 740 credit score and only a few years on your credit report (why didn't you start as an authorized user at 18?), you really don't have much leeway.

Underwriting standards are incredibly tough right now: the typical person denied for a mortgage these days has a ~730 FICO. Typical approvals are above 760.

Thank you love2ft, I'll definitely keep that in mind. I'm not looking for a permanent place, just a condo for a few years. Also 740 is my CreditKarma score, where I have a "D" in average age of open credit lines, an "F" in total accounts, and an "A" in everything else. I'm unsure of this , but I think creating a new account will help offset the pull?

My AAoA is 3 years, not 2.5 like I said originally. If I get SPG and another card, my AAoA will be 3.25 years next year. If I don't get any cards at all, it would be 3.3 years.

I don't think the 10k miles/anniversary is a feature anymore for the Barclays card though. So hold onto your card longhorn11!!

What you're looking at (credit karma) is a fake credit score, it's for "educational" purposes. You need to look at your actual FICO score from myfico.com. It could be 50 points lower or higher, there's no way to tell. Your AAoA gets rounded down, so 3.25 would be 3.

You can get the same offer I got with 10k miles every year if you use the link on FT.

It will hurt. I would recommend not churning for at least a year ahead of applying for a mortgage; start that year with the maximum credit available. With a 740 credit score and only a few years on your credit report (why didn't you start as an authorized user at 18?), you really don't have much leeway.

Underwriting standards are incredibly tough right now: the typical person denied for a mortgage these days has a ~730 FICO. Typical approvals are above 760.

Agreed, although he will get approved by someone but the rate will not be ideal.

Hi,

I've seen a few mentions that Amex will backdate new accounts to your original membership year.

I only have a Personal SPG Amex which I have had since 2008. I was thinking about opening up a business account to take advantage of the new 30K points promotion. Does that mean that if I open the business SPG card, that the date that account was opened will be sometime in 2008 (the same date as my personal SPG Amex)?

Does anyone have any confirmation from AMEX about this or know of a place where I can read the policy?

Also, does that mean if I were to open up a Amex Blue Cash (no fee) that the open date for that account would be 2008. I wanted to open up a no fee card with Amex to keep forever just to increase the average age. Thoughts on this idea?

Does anyone have thoughts on which Amex no-fee card is the best?

A business card would not report on your personal credit file - (except the inquiry) from what I have read.

The personal card should reflect your 2008 date. The HHonors amex is the best no-fee card IMO. If your family buys more than $2500 in groceries in a year you should get the Blue Pref card. Scratch that - IIRC the fee is waived the first year, get the Blue Pref now if you want another card, and downgrade when the fee rolls around. I think there is even a $100 signing bonus.

But what if he uses his SSN as his tax ID number when applying for a business card? Or is it different just because that's how business cards work?

I'm not looking for a permanent place, just a condo for a few years.

I would think long and hard about this, flexibility when you are young is very important to job growth, there are many benefits of renting until you decide where you want to be your perminant place. I think of a condo like temporarly marrying your girlfriend for jsut a few years.
as for the cards i would focus on some you can keep for a long time with zero annual fee to get you credti age up, the spg card is great but 65 is not zero and 65 after 10 years is 650 okay 585 with first year free, but zero after 10 years is zero. i would look at the chase freedom for spend, you can transfer the ur pts to your dads ink bold acount and then transfer to your choice of airline and your spend will add up quickly with the 5 pt bonus catigories.
also look at hilton amex and citi hilton visa, both fee free.

Thanks for the advice. You really like Hilton lol...but I'm not to keen on staying in hotels (yet?). The only reason I'd get it is for the backdating. Which is something I really care about right now haha.

You bring up a good point regarding the SPG and its fees. Until the Ink Bold "deal" is dead, I have no real desire to earn Starpoints. Or any points that aren't UR points. I'll want them in the future for sure, but probably not right now. A 30k Starpoints offer is tempting, but only because it's limited time. I've never been in one of their properties but I'm not big on staying in hotels so I can't really justify getting the card (I've wanted this card since I was 19 so I'm trying hard to justify getting it...)

Chase Freedom is definitely on my to-get list, but I'm waiting for a 35,000 (or even 30,000) point offer to transfer to my Sapphire Preferred.

But right now I'm definitely eyeing the Barclays US Airways card (a Grand Slam would be icing on the cake) with an AmEx for backdating (Hilton AmEx? SPG? other?)

But what if he uses his SSN as his tax ID number when applying for a business card? Or is it different just because that's how business cards work?

Doesn't matter. SSN or EIN, the inquiry goes on your personal file anyway and it doesn't really do anything to your business credit.


Thanks for the advice. You really like Hilton lol...but I'm not to keen on staying in hotels (yet?). The only reason I'd get it is for the backdating. Which is something I really care about right now haha.

You bring up a good point regarding the SPG and its fees. Until the Ink Bold "deal" is dead, I have no real desire to earn Starpoints. Or any points that aren't UR points. I'll want them in the future for sure, but probably not right now. A 30k Starpoints offer is tempting, but only because it's limited time. I've never been in one of their properties but I'm not big on staying in hotels so I can't really justify getting the card (I've wanted this card since I was 19 so I'm trying hard to justify getting it...)

Chase Freedom is definitely on my to-get list, but I'm waiting for a 35,000 (or even 30,000) point offer to transfer to my Sapphire Preferred.

But right now I'm definitely eyeing the Barclays US Airways card (a Grand Slam would be icing on the cake) with an AmEx for backdating (Hilton AmEx? SPG? other?)

What is your take on $5,000 spend in 6 months? If you're OK with it go with SPG, if not go with Hilton. If you're interested in Latin America, definitely go with SPG; 35K SPG (after spend) could get you 87.5K LAN kilometers. If you like flying down south you don't want to miss that. However, AMEX Hilton could get you started on a very good thing, too, because there are so many cards that could get you HHonors.

I would definitely think about your housing situation first and foremost. That being said I picked up the Chase Priority Club, AMEX PRG, and Delta Gold AMEX about three months before refinancing our home this year (3.75 fixed/30yr.) and had no issue. Although, I maintained a 720 FICO and do have a longer account history (5 year Discover acct.) My colleague refinanced with the same lender at the same time and just picking up the Chase PC card caused him big issues.

I'm not that young (29) but I am young at the points game (above being first app) so I can't provide the best advice like many others here on FT but, per my experience, I would think that you could acquire one-two cards now and be okay for the condo late next year. I would jump on the SPG 30k offer, I plan on getting this card myself to keep.