How will my credit history be affected by regularly switching cards?

Credit Cards & Credit Card Programs
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Hi,

In recent years I have been switching credit card providers every 12 months in order to maximise sign-up point bonuses.

My question is - to what extent is this behaviour negatively effecting my credit history? I understand that every time I apply for a credit card it is noted in my credit history, but I assumed that provided I always paid my bills on time that there shouldn’t be an issue…

Thanks!

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The only thing I’d add to the earlier comment is to check your credit score. The linked articles mention checking your credit history, to make sure there are no erroneous entries, which is good, but it doesn’t tell you how your card applications (and any other applications for credit) are impacting your score. Using something like https://www.getcreditscore.com.au every now and then will help you track of it is going up or down.

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Hi,

I would recommend reading the following PH articles over a cup of tea/coffee.

https://www.pointhacks.com.au/cards/credit-records-work/

In short, 1 card every 12 months is fine (personally speaking) (Note:your personal circumstances might vary).

In general, as of now, paying bills on time doesn’t improve your score. However, if you don’t pay your bills on time, you risk getting a negative entry on your credit file. This is called negative reporting->only negative ‘entries’ are noted. Positive reporting has been introduced in recent years in AU but the take up is slow as it depends on Financial Service Provider (e.g. banks) to report Positive ‘entries’.

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Thanks very much for your helpful responses. That clears it up considerably.

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My own personal experience is that I’ve grabbed six new cards in the last year and a half and the impact has been moderate; my score has dropped, but remains good.  The impact immediately afterwards (as in the following days/weeks) is larger, but then it shortly recovers much of what was lost.

I’ve also recently taken out a mortgage and the card history was no problem for any lender that I dealt with, although I was required to drop the total available credit limit down to $20k.  The loan having been approved I was able to pick up another card last week no problem either.

I would second the suggestions to keep an eye on your credit score (credit savvy will even email you monthly updates for free; looks like they’re Experian) and ease off on the card acquisition if you notice a large drop even after a couple of months.

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