Rejected for a second credit card - should I apply for a next one?

Hi all,

I am very new with credit cards. Got my 1st credit card last year. I read that it is a good idea to go to another credit card before the annual fee comes up which is the 22nd for me.

I applied to a different banks credit card saying I want to balance transfer and close my current card. I have a credit score of 870 /1000 and have paid all my credit card repayments in full amounts. I got rejected and I am concerned for the negative hit that this has caused.

I am scared to apply to another credit card because I am concerned of another negative credit hit. What can I do to prevent this happening?

And as a bonus answer which cards are the best deal in the market for no or low annual fee credit card to earn points ? 55 days interest free period also wanted. Balance transfer would be great but not a must.

Hi @o.kagan09

Welcome to point hacking!

One of the things that you discover very quickly is that point hacking invariably involves taking hits to your credit score, and that most of the time that doesn’t actually matter. When I first started point hacking, several years ago, I applied for everything willy-nilly and as a result my credit score went down to as low as 500. Yes, it took a couple of years to recover, and no, it did not affect my quality of life one little bit.

If you know you’ll be applying for credit in the future (eg. for a home loan) then it might be worth keeping an eye on your credit score. But really a hit on your credit rating is nothing to worry about. You should also keep in mind that late payment of bills has a far more negative effect on credit scores than applying for credit does. And also, keep in mind that cancelling a card will have a positive effect on credit scores. So when you apply for a new card, the negative credit hit will be more-or-less cancelled out by the positive credit hit of cancelling your old card.

What can you do to avoid another negative credit hit? If you apply for a new card you can’t avoid a negative credit hit. But you really need to ask yourself: will having a credit score of, say, 800 rather than 870 make a difference? Almost certainly the answer will be, probably not.

Re your final question: we can’t give financial advice here. I keep a Coles Rewards Mastercard which earns the equivalent of 1 Velocity point per dollar spent, and the annual fee is $99. You might also like to look at some of the low fee AmEx cards.

Hope this helps!