CardWise Compass / A clearer path to free travel.
Hi {{first name | friend}}!
Typing this while en route to Croatia! I didn’t use points/miles for this trip, as the deals weren’t there. I always want to set realistic expectations. Points “influencers” aren’t circumnavigating the world entirely for free, so please don’t think the bar is higher than it is.
Last issue, we covered mistake #9: staying organized so your points don't slip away. This week is mistake #10: the fear that a new card will wreck your credit score (not true!).
Estimated read time: 3 minutes
Today's Issue at a Glance:
Signal: Capital One just boosted the Venture card's welcome offer to $300 in travel credit plus 75,000 miles, easily over $1,000 in value
Strategy: A new card causes just a small, temporary dip to your credit score
Scenario: What happens to a 750 credit score after opening one card
Step: Quickly check your credit score
Signal
Capital One just bumped up the Venture card welcome offer. New cardholders get a $300 credit toward hotels or vacation rentals booked through Capital One Travel in year one, plus 75,000 bonus miles (aka points) after $4,000 spend in the first 3 months. Annual fee is $95.
That's over $1,000 in combined value, on a card that's already a great starter travel card.
Note: I don't have a referral link for this card. But as always, I'll point you to whatever's best for you, whether I benefit or not.
Strategy
If you remember one idea from this week's newsletter, let it be this:
A new credit card causes just a small, temporary dip to your credit score.
Applying triggers a hard inquiry that costs 5-10 points, plus a slight dip in your average account age. Both fade within a few months.
As you can see below, the two factors that carry the most weight, payment history (35%) and utilization (30%), barely move if you pay in full. The inquiry stays on your report two years, but its effect disappears much sooner, usually within a few months. Turning down a $1,000+ sign-up bonus to protect a temporary 5-10 point dip in your credit score is rarely worth it (I’d say only if you’re getting a loan in the next 3-6 months.)
My wife and I each apply for 2-3 cards per year, and our credit scores are both 780+. Having a perfect credit score of 850 can’t fund your travels, but signing up for a new card can!
New credit, the category that card applications fall under, is only 10% of your score.
Scenario
Let's say you're at a 750 credit score and apply for the Venture card mentioned above. The inquiry knocks off 5-10 points, and your account age dips slightly. But payment history and utilization don't change, since you were already paying on time with no balance. You’ll likely be back to your starting score, or higher, within 3-6 months, since the added credit line lowers utilization, and the $300 credit plus 75,000 miles are yours to keep!
Now this isn't permission to open five cards in a month. Space out your applications every few months, and if you’re applying for a mortgage or auto loan soon, simply wait until after your loan closes before you get a new card.
Step
Pull up your credit score today, through your bank's app or a free site like Experian, so you have a real starting number. Most banks update it monthly, and checking it is easy. Look again in 90 days after you apply for a card and you’ll see that the dip was likely smaller, and shorter, than you expected.
If you'd like to walk through your situation, including timing around any big loans coming up, book your free "Let Points Cover Your Next Trip" strategy call.
Next issue, we'll wrap up the series with mistake #11: letting this sit on the back burner. Then I’ll keep sharing fresh, high-value practical tips that I’m super excited to pass on to you!
If this was helpful, reply and let me know. And sharing this link with a friend who travels lets them grab their own copy of the points guide.
Blessings, and I hope to hear from you soon!
Ross
CardWiseTravel.com