Pragmatic Finance

I love making money off credit card companies. I have been getting into a habit of opening up credit cards for sign up bonuses and 0% balance transfer offers haphazardly but there is one method to maximize your results. I have heard it referred to as an App-o-Rama or an application spree but the strategy is the same. Wait until you can maximize your credit score and then apply for all the cards you plan to….at the same time.

The purpose of an app-o-rama, or AOR, is to take advantage of the way your credit score is calculated and credit applications are processed in order to get the most bang for your buck. You can use it to get rebates, miles, cashback, borrow money at low or no interest, or even to just greatly increase your available credit. Note that there are risks to doing this that I will discuss at the end.

Before I go any further, keep in mind that to really take advantage of this someone would need somewhere near a 700 fico score or better and a long history of established credit. New credit inquiries and fresh accounts ding your score for 6 months before most of the damage goes away so it takes some planning. Everyone loves a list so why don’t I break it down that way…

Step 1: Maximizing Your FICO Score

The first thing to do is to pay down as much of your credit card bills as possible. You will want to do this at least a month or two before your planned endeavor so that you are sure it will get reported to the credit agencies. If you can’t or don’t want to pay off all your credit card debt you should try to reduce the utilization as much as possible, preferably under 30% of the card. There is a lot of info here about your credit score and how to improve it.

Then you should call up your current card issuers and ask for credit limit increases without a hard credit inquiry. This could help you get higher new credit lines since some issuers seem to give you lines similar to your highest ones.

You also want to make sure that it will have been 6 months since the last account you opened or credit inquiry you have.

Step 2: Choosing the Cards

This is the step that is pretty much differs depending on your goals. The main goal here should be the maximum amount of rewards or 0% balance transfer opportunities. For signup bonuses it’s pretty simple, pick the ones with the biggest cashback, or if you like them, frequent flier miles or other rewards.

For 0% bt offers you will want to look not only at how high of lines they normally give, but also if you already have cards with that same issuer. If you do, you might be able to allocate some of the lines from the old card to the new one.

If there are any other accounts, such as brokerage or bank accounts that you want to apply for that pull your credit now would be the time to do it. Might as well do them after you apply for the cards since your credit score will be hurting for the next 6 months anyway.

Step 3: Applying for the cards and accounts.

I think the best time to start applying is early in the morning and in the first few days of the week. If the report isn’t pulled until an underwriter looks it over then you want the report to be pulled as soon as possible. If you do it at night on a weekend the applications that work that way would not be done until at least Monday, when all your other inquiries had shown up.

It is probably best to apply for the most desired ones first before the others.

Now before you go off to open up a bunch of credit cards be warned that this will hurt your score significantly for at least 6 months. It will also decrease your average age of your credit accounts which may also hurt your score. If you go overboard on the applications or use excessive amounts of your credit some issuers could get scared and decrease your lines. And, as mentioned in the past, 0% bt offers aren’t for those that aren’t extremely disciplined.