What Is the 90-Day Rule for Credit Cards?

The 90-Day Rule for Credit Cards: What You Need to Know

When applying for a new credit card, it's important to understand the terms and conditions that come with it. One term that has been gaining more attention lately is the 90-day rule. In this article, we'll take a closer look at what the 90-day rule means, how it works, and what you need to keep in mind when applying for a new credit card.

What is the 90-day rule?

The 90-day rule is a policy that somecredit card issuershave put in place to prevent what they call "churning." Churning refers to the practice of repeatedly opening and closing credit card accounts to take advantage of sign-up bonuses, rewards, and other perks. The 90-day rule aims to discourage churning by limiting the number of credit card accounts that a person can open within a certain period of time.

How does the 90-day rule work?

The specifics of the 90-day rule can vary depending on the credit card issuer. Some issuers may limit you to one new credit card account every 90 days, while others may have a shorter or longer waiting period. Additionally, some issuers may have different rules for different types of credit cards (e.g. travel rewards vs. cash back).

It's also important to note that the 90-day rule typically applies to new credit card accounts, not upgrades or downgrades of existing accounts. So if you already have a credit card with a certain issuer, you may still be able to upgrade or downgrade it without running afoul of the 90-day rule.

What should you keep in mind when applying for a new credit card?

If you're considering applying for a new credit card, there are a few things you should keep in mind regarding the 90-day rule:

1. Check the issuer's policies: Before applying for a new credit card, be sure to check the issuer's policies regarding the 90-day rule. This can usually be found in the terms and conditions or on the issuer's website.

2. Plan strategically: If you're interested in opening multiple credit card accounts within a certain period of time, plan strategically to avoid running afoul of the 90-day rule. For example, if you want to open three new credit card accounts, space them out over a period of six months instead of opening them all at once.

3. Consider your credit score: Opening multiple credit card accounts within a short period of time can have a negative impact on your credit score. Be sure to consider this before applying for new credit cards.

Tips for saving money with credit cards

While the 90-day rule is an important consideration when applying for new credit cards, there are also ways to save money andmaximize rewardswith credit cards. Here are a few tips:

1. Look for sign-up bonuses: Many credit cards offer sign-up bonuses, such as cash back or points, for spending a certain amount within a certain period of time. Look for cards with sign-up bonuses that fit your spending habits.

2. Use your rewards strategically: Whether you're earning cash back, points, or miles, use your rewards strategically to maximize their value. For example, if you have a travel rewards card, use your points to book flights or hotels instead of redeeming them for merchandise.

3. Watch out for annual fees: Some credit cards come with annual fees, which can eat into your rewards. Be sure to consider the annual fee before applying for a new credit card and make sure you'll earn enough rewards to justify the fee.

In conclusion, the 90-day rule is an important consideration when applying for new credit cards. By understanding the policies of credit card issuers and planning strategically, you can make the most of your credit cards while avoiding potential pitfalls. And with the right approach, credit cards can be a valuable tool for saving money and earning rewards.