Marketing professor offers advice on credit card promotions

Dr. Neel Das, professor of marketing and supply chain management and MBA program director in the Walker College of Business, is featured as an expert from WalletHub's recent piece about the best credit card promotions.

How often do you recommend taking advantage of new credit card promotions?
Albeit new card promotions tend to be attractive and hence provide the incentive to apply for one, however, one needs to be careful in choosing for which one to apply. Every time you apply for a card, your credit score gets affected since card companies check these scores to assess your financial strength and to determine whether you would be a good candidate. When your scores go down, the cards with good (or great) promotions tend to be out of bounds since such cards are looking for higher scores. So applying for a new card often might cause a drop in credit score which in turn might make you ineligible for a card with good benefits. Overall, my suggestion is that you should open a new card when there is a concrete (or real) reason - simply opening a card because of the promotional benefit/s or transferring an existing balance onto this new card does not make a whole lot of financial sense in the long run. Card companies look for consumers who establish a long-term relationship - having a long-term relationship might give you the edge to (re)negotiate the current APR or some other benefit for the existing card. One final thing to keep in mind is that you should not close an existing card just because you have opened a new account - depending on your total credit card debt, the number of cards, and relationship with the card companies, closing a card could potentially affect your credit score negatively.

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Marketing professor offers advice on credit card promotions
Published: Jul 2, 2021 9:00am