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Like everyone, I’m frequently asked at the checkout of drugstores and retail outlets if I have a credit card linked to the store and, if not, why don’t I quickly apply then and there to get a discount or cash bonus when my application is approved? I was recently tempted by $50 offered at the local chain drugstore, but then I thought about the time and energy to unfreeze my credit score and declined the $50 offer (but I continued to think about it for a short while 😊). However, when I got a notice last week that my backup credit card, currently with a $0 balance, is increasing its annual fee from $99 to $249, I decided it was worth my time and energy to apply for a $0 or low fee card. After all, this is just for my convenience and peace of mind if the one I use all the time needs to be replaced. Quick research found a no-fee card with the same bank. Though I haven’t yet followed through with the application process or the unfreezing, I have learned that everything can be done either online or on the phone and takes well under 10 minutes per scoring company. I think it will be worth my time to follow through later, but I’m interested in your opinions before doing so. Thanks.
When I downgraded my Barclay’s Arrival card with fee to the Barclay’s card without the fee I did not have to go through the application process (did not have to unlock my credit freeze) since it was with the same bank. I did this through a phone call so the downgrade may be easier than you think.
I knew that when I purchased my car, I would need to unlock my credit line (even tho I paid cash). I asked the dealer which credit reporting agency they used and only unlocked that one temporarily. I can do this online and only takes a few minutes. What I have learned about my credit score is that as I run all my expenses through credit cards (2 of them for rewards reasons), my monthly cash flow is such that on a monthly basis I can use about 60-70% of my total allocation and then it goes to zero. My credit score is like a yoyo and goes up and down every month by as much as 50 points depending if they check it when I am at a zero balance on my cards or a much higher percentage.
Transactions in cash / check over $10 K USD require verification of funds, and soft credit check per regulation by the Federal Office of Foreign Asset Control.
I never knew this. If a soft check, it sounds like there’s no reason to unfreeze credit for this to happen.
What do you mean, they ran a credit check when you were paying cash? That’s nuts. And does that mean you had to give them your SSN??
I do not remember if I gave them my SSN. As the car was also being registered for my tags and title, I suspect they had quite a bit of info on me.
If I were paying cash for something and they wanted to run my credit, I’d tell them to pound sand.
I know – it sounds like I walked in there with a paper sack full of cash, but instead, I maximized the down payment using a credit card (wanted the points) and then paid the remainder with a check.
Thanks for this new info.
Things to consider when applying for a new credit line (or when unfreezing credit records is worth considering)
The Good: access to retailers (Costco store & gas); welcome offers (for me, nothing under $200 USD is attractive – check Nerdwallet dot com), loyalty perks (airline points, Amazon / Wholefoods discounts), cash back rewards.
The Bad: reduced FICO score with each new card, store credit card has very low limit (5K) compared to bank card (30K); interest rate on store card (APR) is much higher than bank card (if balance not paid in full for each billing cycle); managing more credit cards is a pain point; future application is limited by banks (the major issuers, have limits per year for all cards); spam soliciting mailings, emails from retailers
The Ugly: more credit cards open = more exposure risk to scam / personal ID theft (retailers got hacked quite often); closing credit card takes work and FICO hit but it might not erase personal file on the retailers’ files.
All good points, Quan. Avoidance of scams is very important to me. I recently learned of someone close who lost a big chunk of retirement savings to a phone scammer – and no legal recourse as I understood the story (I didn’t press for details).
Scams are becoming more sophisticated with computer algorithms and AI tools. Caller ID spoofing is particularly hard to detect. I got several alerts from Wells Fargo bank at midnight. A good defense is to avoid responding to the message / alert. If worrisome, call the number on the back of the actual card or your local branch (nothing urgent, business hours are good enough). Never type your credit card number AND security code (in the back of card) into your phone or links in email or text. As a retiree, I think FICO score is a nuisance and a big target on my back – it marks me as an attractive target for marketers and scammers.
I stopped worrying about my FICO score some time back. It’s comfortably in the 800s, but since I have no expectation of needing a loan, or additional credit cards (I have several), the only possible hit might be for insurance, and I don’t plan to switch carriers.
$150 saving for 30 or 40 minutes of your time. Seems like an easy decision, and that doesn’t take into account making a stand against your card company taking advantage. It’s not going to move the needle on your credit score to any great extent, and if you’re like me, the score is only useful for low-impact things like insurance quotes and phone contracts, etc.
Agree, and that’s not just like a bonus for opening an account; it’s every year.
Some might consider just cancelling the offending card and not replacing it. This I would not recommend. To me it’s important to have a backup.
This is what I think. Chris