getting a credit card and cancelling it a few months later? (rate, mortgage)

[49erfan916]

Hey all. I was thinking about getting a credit card from south west, use the bonus points to fly out on the East Coast and during another trip to the midwest, and cancelling the credit card late next year. I have exceptional credit and I know that if i do cancel the card, my credit will take a hit, a hit that I'm willing to take. Have you done this strategy before? How much did your credit take a hit?

[UntilTheNDofTimE]

I do this almost every year (apply for bonus card and cancel within a year). I'll be closing the exact same card you referenced here in January. My credit score fluctuates from 720 to 760 year round. I go off of what my discover card says. The movement is mostly due to utilization and I haven't seen big drops when I've cancelled cards. I'd say you may see a 10-30 point drop depending on your new utilization rate but it should recover quickly or have no negative impact at all if your utilization is not impacted. I don't really concern myself with my score. I have 0% offers by the dozens in my mailbox and I'm not looking to buy a house or car anytime soon so the fluctuations don't bother me personally.

[49erfan916]

Yea, I am in the 800's so if I drop to 760 or whatever, it's not a big deal. As long as I am above 730, then I am ok. Plus I don't foresee myself taking out any loans. (maybe a small mortgage of 50k in 3-5 years)

[beachmouse]

No big deal to do this once or thrice. And as long as you keep your old cards (the credit bureaus love it when you have the same card 10+ years) it will probably be no significant impact to your credit score.

What the credit card companies don't like are people who 'churn' cards and constantly sign up card for the introductory bonus and then cancel them before annual fees hit. The big players will now say 'one lifetime sign up bonus per specific card per lifetime' (American Express) or 'you may only open 5 cards in 24 months with us' (Chase). But if you aren't looking to churn cards, what you're thinking of doing is a perfectly rational thing with no real hit on credit scores unless there are exceptional circumstances. Do hold onto the card until close to the date when any annual fee would hit and then contact customer service to see if there are any 'retention offers' to see if it would be worth it for you keep the card.