Does REI mix with Travel Hacking?

Question

I have been pondering this lately.  I'm still in the education and learning phase of my journey, and I'm about one year away from purchasing my first property.

My wife and I like to earn hotel points and frequent flier miles via credit card signups. As a result I have about 32 credit cards listed on my credit report.  Only 12 of them are open, and I only use 3 of them.  I have NEVER paid interest on credit cards, paying them off in full every month.  Like I said, they only exist for the travel benefits.

So will this unusually large number of credit cards on our reports impact our ability to obtain mortgages, or multiple mortgages?  The only debt we have is the mortgage on our primary residence.  In anticipating the start of our journey, we have tapered off new credit card applications since January, but it hurts to pass up on so many lucrative offers.

Are there any other people out there like me, who have forayed into travel hacking?  Should we give up on our credit card hobby to make REI work, or can the two co-exist?

If there are any mortgage experts out there, what are the chances somebody like me will qualify for multiple mortgage loans (one a year, plan on having 20% down.)

Mindy Jensen · Answer

@Ronnie Carney,

I open a card for each new property that I flip. I put all the supplies I can on the card to meet the spending requirements for the bonuses. I close cards when I'm done with the property, after I have made all the returns I need to.

I have a very long credit history, and a very high score. Judging from your profile image, I might be a few months older than you...

What is your score? Lenders like to see 740 or higher for the best rates, but most will go down to 620 - of course your rate will be higher. I've seen as low as 580, but that's mostly for refinancing - and those rates are really high.

What does your score look like? If you have cards you don't use, consider canceling some of them. There are caveats to that advice, though.

Keep your first card open forever - unless they charge an annual fee. Your credit score is made up of many parts, and length of credit history is one thing they consider. The oldest card established the beginning of your credit history.

Keep as many cards open as you need to give yourself a fair amount of credit. You said you don't carry a balance, but credit usage is another factor in your score. If you carry an $800 balance on a $1000 limit card, and that's the only thing you have, you are using 80% of your available credit, and therefore look like a credit risk.

You don't have this problem right now, but it's something to consider. On the other hand, if you are opening up more cards, this won't matter so much.

Have you used the points yet? Some programs terminate the points if you don't use them within 12 or 18 months of card deactivation.

Here's an article I wrote about travel hacking your way through a flip.

David Goossens · Answer

It depends on how you plan to finance your RE endeavors. Like the people above stated, having multiple credit inquires in a short period of time might vary from lender to lender. Get the ball rolling at a local credit union and see what they say. If you are 1 year away from purchasing a property, that will give you plenty of time to make any necessary adjustments. Of course, traditional mortgages are only one way to get started in RE. Do some searching on the forums. People really get creative. On my last flip, I paid for almost everything on my CC and racked up enough points for a sweet vacation. So, long story short, I think travel hacking and RE go together nicely if you take the time to plan it right.

Account Closed · Answer

Talk to lenders. Usually no new inquires in the last 6 months is what they are looking for.

Ronnie Carney · Answer

great info @Marcelo Duran credit scores rarely dip below 785 for both of us. We are trying really hard not to apply for anymore!

Ronnie Carney · Answer

thanks @Mary lou L.

That is good to hear. We have zero debt on our cards so we shouldn't have a problem. We both have the IHG cards as well! The two sign ups got us a week in Jamaica for free!

Mary lou L. · Answer

From my  last refinance experience it wasn't the amount of the credit cards I had, it was how much did the monthly payment affect the DTI! We ended up rolling a few cards into the refinance to get the DTI where it needed to be.

I would suggest speaking with a lender to see where you are in regards to how much you can borrow!

Best of luck!

P.S we LOVE IHG!! We were able to secure two free nights at the Willard on our trip to Washington D.C a couple of years ago! Totally worth it!!!

Ps.s According to CreditKarma I have 32 open credit card accounts. I was able to get two more personal loans to finance my latest rehab.

Account Closed · Answer

Having more credit is good for your credit but so is the average age of your credit i.e. If they were all opened recently it will negatively affect the average age your credit cards. In addition, any hard credit pulls negatively affect your credit by only a little but they disappear from your credit report after 1 or 2 years(I don't remember exactly how long)

Graham Parham · Answer

Ronnie,it is all about number. It is simple math. If you income supports you math. Both can exist as long and you income supports the debt.

Michael Key · Answer

DTI is important, and an easy method is to simply keep your credit cards under 22% of available total credit month to month.

Does REI mix with Travel Hacking?

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