Effects of gaming credit cards for points on credit score

Always think price on 06/09/2016 - 09:37

Hi all,

I have been looking at applying at more credit cards to score out on some more frequent flyer points. There are topics around this but not really much around how people have managed this. I am sure their are plenty of OzBargain-ers who have gamed the points

I have never defaulted - but I am curious if anyone know the impact of applications and having had credit cards on my profile. Do applications on the profile 'reset'?

I always close the cards, and ensure they are all paid off.

Regards,
John

Financial

Comments

  • cypher67 on 06/09/2016 - 10:12

    Provided you close the cards completely there is no impact to having had them, apart from if you maybe tried to get another card with the same company down the track. If say you had 5x $20k credit cards open, even if they were all 100% paid off, it would be considered a $100k debt when applying for a loan and impact your borrowing potential.

    • Diji1 on 06/09/2016 - 10:19

      How can a debt that is paid off be considered a debt?

      Surely that's a paid off debt so therefore not a debt and actually evidence of being a good credit risk?

    • ShannonIngram on 06/09/2016 - 10:35
      +2

      This is not correct that it has no impact if the cards are closed off. The number of applications also has an impact on credit score. I used to be a mortgage broker and had clients from OzBargain that occasionally ran into issues on the home loan side of things due to the number of credit inquiries over the last 5 years due to churning from card to card based on the best offers.

      • Always think price on 06/09/2016 - 10:42
        +1

        This is more along the lines of the response i was expecting. I am guessing this is taken into consideration though? I mean if no defaults, and all closed now it is more favourable than having a bunch still open.

        • tomsco on 06/09/2016 - 10:55
          +1

          Definitely will be more favourable to have them all closed, but having the enquiries will have an effect.

        • Always think price on 06/09/2016 - 11:07

          @tomsco: Thanks. Understand the closing in terms of impact to borrowing potential.
          I am guessing (hoping) that applications will be viewed with less scrutiny

          No more gaming points:(

        • tomsco on 06/09/2016 - 11:10
          +1

          @johnzak: Not being in the industry, at a guess, they can access your credit report which will show the enquiries, but may not always show current accounts, which relies more on self disclosure.

  • jackofspade on 06/09/2016 - 13:09

    I think the best way to find out the impact on your credit score is to simply check your score every month. If your score is above average then you are good to go.

    • 0FoxGiven on 15/09/2016 - 14:05

      Can you do this for free? If so, how?

        • 0FoxGiven on 15/09/2016 - 14:40

          I wasnt able to verify my identity online with just my medicare card (I migrated to Australia just 5 months back). Will I even have a credit history if I never applied for a credit card and stuff?

        • loke on 15/09/2016 - 14:56

          @edrenalin: Yes, if you don't pay bills (telephone, electricity, gas, etc) on time and have outstanding debts that could appear on your credit report:

          https://www.veda.com.au/yourcreditandidentity/check/credit-f…

          Can paying my phone or electricity bill late impact my credit file?

          Yes, it can. Under the Privacy Act 1988, an overdue debt can be listed on your consumer credit report when it is overdue by 60 days or more, when the debt is at least $150. Please note that information about whether your have paid your account on time or not cannot be listed by a telco or utility provider as they are not a licensed credit providers, unless you are 60 days or more overdue.

          Before listing a default, the credit provider must have sent a written notice seeking payment of the overdue debt and a written notice stating that the default may be listed with a credit reporting body.

          Once you’ve paid the overdue debt, the credit provider is required to update the listing on your credit report to 'paid' as soon as is practicable.

          If the overdue debt is classified as a serious credit infringement, where you have left or appear to have left your last known address, the credit provider must first have listed a default and must have had no contact with you for the preceding 6 months.

          The legislation does not place obligations on credit providers with respect to commercial credit defaults which means the obligations relating to consumer defaults and serious credit infringements does not apply to commercial defaults and clearouts.

  • bettina44 on 26/03/2017 - 21:40

    when you sign up for cards for points, what do you guys spend it on? For me spending 2500k in 3 months is a lot. I pay for all the usual groceries and stuff on it but what do you do if you fall short? Stock up on gift cards and top up opal?

    • Always think price on 27/03/2017 - 07:42

      I usually have some purchases to do with work.
      I know some people can pay off rent or bills etc

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