Think Twice About Applying for Credit

Credit card issuers are offering a lot of incentives, but your credit score could suffer.

- By Michael Korsh

Americans paid down billions in credit card debt during the pandemic, with balances declining 17% in the first quarter of 2021 compared with a year earlier, according to the Federal Reserve Bank of New York.

But now that the economy is recovering, credit card issuers are eager to entice new applicants with flashy deals and sign-up bonuses. For example, the Chase Sapphire Preferred Visa and the American Express Platinum card are offering up to 100,000 bonus points for new cardholders.

While you might be inclined to take advantage of these deals, some short-term credit decisions could lead to long-term damage to your credit score. Whether you’re applying for credit for the first time or have an established credit history, it’s important to consider how new lines of credit could affect your ability to obtain credit down the road.