Opening up new credit cards isn’t on my agenda in the new year.
- I opened up a new credit card in 2022 for the first time in a while, but I won’t be opening new cards in 2023.
- There’s an important reason why I’m saying no to new credit.
- I don’t want my credit to take a hit in case I need to get a mortgage.
I opened a new credit card in 2022 in order to take advantage of some airline perks the card offered. This made a lot of sense now that our family is finally traveling again after the COVID-19 pandemic has waned.
I am really happy with the new card, but I’m committed to not opening up any new credit cards in 2023 — despite the fact that opening this one worked out well. There’s a simple reason why I’m just saying no to new cards in the coming year.
Opening up new credit cards could come at too big of a cost
I will not be opening up any new credit cards next year in case my family and I end up having to take out a new mortgage.
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I had sworn off taking out new mortgage loans due to the hassle involved with the paperwork. But we have decided recently that we are going to buy a new home (rather than building one as we had originally planned).
With our desired neighborhood and our needs for a home that can accommodate our family, we may end up having to borrow money to make our purchase. Paying cash for a home isn’t the smartest decision, and if we can’t sell our current house for enough money to pay for the entire cost of the new home, we don’t want to tie up any new money that we would be better off investing elsewhere.
If we do end up taking out a mortgage loan, we want to qualify for the best rate possible at this time of high rates. And opening up a new credit card could mess that up for us, causing us to pay more money for the larger loan we’d be taking on.
How could a new credit card hurt our mortgage prospects?
Getting a new credit card could have an adverse impact on our ability to qualify for a mortgage at the best rate because the card could hurt our credit score and credit record.
Since I already opened a new card in 2022, I have an inquiry on my credit record that mortgage lenders will see when I apply for my home loan. If I were to open any more new cards in 2023, I’d have more inquiries, and this could make lenders worry about whether I’m being irresponsible or getting in over my head with debt.
The inquiry from my last card also lowered my credit score, as did the fact that the new card meant my average age of credit was shorter. I don’t want that to happen again and reduce my credit score even further before I potentially apply for a mortgage.
The good news is, I already have my airline credit card I can use for travel perks as well as a great general purpose rewards card I can use for everything else. But, even if I didn’t, it’s more important to prioritize a great rate on a mortgage I’ll have for decades than to get a better credit card — even if I have to miss out on some rewards and perks for a while.
If you’re also considering getting a new card, think first about whether you’ll be doing any major borrowing soon. If you will, wait until you get your bigger loan before you take a hit to your credit score by opening a new credit card account.
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