What is the 90-day rule for credit cards?

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

If you're a credit card user, you may have heard of the 90-day rule. But what is it exactly, and how does it affect yourcredit score? In this article, we'll dive into the details of this rule and explore its implications for credit card users.

What is the 90-day rule?

The 90-day rule is a time frame that credit card issuers use to determine whether a new credit card application is a risk or not. Essentially, it's a way for issuers to prevent people from opening multiple credit cards in a short period of time and then running up large amounts of debt.

Under this rule, if you apply for multiple credit cards within a 90-day period, the credit bureaus may view this as a sign of financial distress. This can negatively impact your credit score and make it more difficult to obtain credit in the future.

How does the 90-day rule affect your credit score?

As mentioned, the 90-day rule can harm your credit score if you apply for too many credit cards within a short period of time. This is because each time you apply for credit, the issuer will run a hard inquiry on your credit report. Hard inquiries can lower your credit score, especially if you have several of them within a short period of time.

Additionally, if you have multiple credit cards, you may be more likely to miss payments or carry a high balance, both of which can also hurt your credit score. This is why it's important to apply for credit judiciously and only when you really need it.

How can you avoid running afoul of the 90-day rule?

To avoid running afoul of the 90-day rule, it's important to apply for credit carefully and strategically. Here are a few tips to keep in mind:

1. Only apply for credit cards that you really need. Don't be tempted to apply for every offer that comes your way.

2. Space out your credit card applications. If you do need to apply for multiple cards, try to space them out over a longer period of time to avoid triggering the 90-day rule.

3. Monitor your credit score regularly. By keeping an eye on your credit score, you can quickly detect any negative impacts fromhard inquiriesor other factors.

In addition to these tips, it's also important to be mindful of your credit card usage in general. Always make your payments on time, keep your balances low, and avoid carrying debt if possible. By being a responsible credit card user, you can help protect your credit score and improve your financial standing over time.

Conclusion

The 90-day rule is an important consideration for credit card users who are looking to apply for new credit. By understanding this rule and following a few simple tips, you can avoid harming your credit score and keep your financial health on track. Remember: credit can be a powerful tool, but it must be used wisely and responsibly.