This post is about the credit card myths as a home buyer and the points management upon closing a credit card.
Can credit cards and mortgages really team up or is it just a myth? I’m here to spill the beans on whether getting a credit card can shake things up in the mortgage process. 🕵️♂️ And wait, there’s more! Ever wondered if closing your credit card means bidding farewell to those hard-earned points? Let’s take the plunge and find out! 💳💬
Question 1: Mortgage = Giving up earning credit card points?
” Is it true we should hold off on credit card applications 6 to 9 months before buying a house? If so, I’d appreciate insights on effective strategies for continuing to accumulate points and cash back during this period.”
1. The planning process is THE MOST IMPORTANT part of buying a home.
Securing a home loan is a big deal. Even with property as collateral, lenders (usually banks) take it seriously. New credit card applications, approved or not, temporarily lower your credit score..
Do This. Steer clear of applying for cards a year before diving into the mortgage game. This increases your chances to get a good rate by showcasing your best credit history
2. Include your family members in the game.
In the journey of building your credit history, consider borrowing a bit of magic from a family member’s credit card.
- Encourage them to join the credit card party.
- Turn your family into points-earning wizards!
3. Use points sales.
If you’re eyeing airline miles or hotel points, keep an eye out for those sales – airlines and hotels love throwing these your way several times a year. Seize the opportunity when the prices are right.
Pro-tip: Landing a successful credit card application can boost your credit score if your shopping spree is more than a year away. (Choosing a credit card that matches your spending categories is a good way to earn points too! )
- American Express® Gold: 4x points at restaurants, 4x points at US supermarkets
- The Platinum Card®: 5x points on flights, 5X points on hotels
Question 2: Closing a card = losing credit card points?
” About the sign-up bonuses (SUB), do I lose those bonus miles if I cancel the card after a year? Any tips for handling my 220,000 United Airlines miles from sign-up bonuses and regular spending?”
Understanding Your Credit Card
Congratulations on accumulating 220,000 UA miles! Understanding the type of the credit card is IMPORTANT.
Airline co-branded card
If yours is an airline co-branded card, for example, Chase United Quest℠, Chase United℠ Explorer, and Chase United Club℠ Infinite, those bonus miles likely have their own party in your airline miles account. Canceling the credit card won’t make those miles disappear.
Flexible-points card
How about yours is flexible-points card? Something like Chase Sapphire Preferred®, Chase Sapphire Reserve®, and Chase Ink Business Preferred®. If you haven’t cashed in those sign-up bonuses (SUB), they might not disappear into thin air when you cancel the credit card.
Knowing Your Redemption Goals
WATCH OUT. Canceling might wipe out all remaining points if it’s your only card. Double-check for a backup or spend them before saying your goodbyes to the card! The second answer dances to the beat of your redemption goals.
Wondering how many miles you need for a specific adventure?
DO THIS. Use the AwardPlus Tool – Keep in mind, United Airlines has been dynamic-pricing for award redemption, so booking well in advance can get better redemption rates. 🌟✈️.
