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I have never owned a credit card and am largely undecided about them in general. They have their pros and cons which could be easily found with a simple Google search; my question is more about the effects of doing what I want do do:

What would happen to my credit score if I applied for the card, got it along with a $30 promotion for applying for the card, and then cancelled it almost immediately, retaining $30 in Amazon credit? Is that even possible?

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the credit is a statement credit. – littleadv Dec 7 '12 at 2:19
Do you know what your score is now? If you've never had a credit card, you have made a decision. For many, the thought of having to use check/cash/debit for every purchase isn't pleasant. – JoeTaxpayer Dec 7 '12 at 3:15
Welcome to RedMastif. – C. Ross Dec 7 '12 at 16:51
I have this card. If you plan on doing a "hit-n-run" then good luck but as for keeping this card, there might be better ones.. For example, they say you get points for pumping gas.. I did and didn't get any. I think it's only good if you shop on Amazon a lot. – NuWin Sep 12 at 2:04

3 Answers 3

up vote 7 down vote accepted

It might work, assuming you can instantly qualify for the credit card. I'd bet that isn't likely to happen if you have never had a credit card before though. (I extrapolate that to assume you don't have much of a credit report. I could be wrong.)

However, it is a gift card, not cash. You would at best get $30 worth of stuff and shipping from Amazon.

  • Your credit would take a hit from the credit inquiry.
  • Then get a small bump from the new credit limit increase and lower utilization.
  • Then you would cancel it and your limit goes down because your utilization goes up, thereby making your credit score go lower.
    • (This assume you utilize credit in some other fashion at all)

Net effect? Your score goes down because you applied for the card. This is also highly dependent on the time frame in which this all happens. Credit reports won't show any activity for a couple of months. So the up and down could cancel each other out if you do it too fast.

My advice, don't apply for credit you don't want or need. Certainly don't apply for credit just to get a reward or discount. The rewards and discounts are only smart if you were already making the purchase.

To expand on the question you didn't ask, it is a pretty solid decision to get a credit card, especially if you don't need one.

  1. You will (sadly) be judged on your credit for more things that just buying stuff. (Insurance, jobs, rental agreements, etc)
  2. Credit takes time to build, so getting started before you need it is important.
  3. If you don't need it, you can develop good habits around credit. (Always pay it off, never carry a balance, never charge more than you can afford to pay that day)

I suggest you join a credit union and get a credit card from there. They will have programs and better deals.

Once you have the card from your credit union, and you if you find credit cards fit your lifestyle, AND if you find you can manage credit responsibly, then feel free to find a rewards card you like (such as Amazon) and apply for it.

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Yes, it is definitely possible to get the $30 or $50.. whatever they are offering; and then immediately cancel the card. It actually doesn't effect your credit score as bad as people try to say it does. Plus, your score will, after about a month, go back to what it was in my experience.

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Welcome to Personal Finance & Money! Please take the Tour and visit other parts of the Help Center to learn more about how the site works. For example, you'll find some great tips about how to write excellent answers that will help the most people. – dg99 Sep 11 at 16:09
anyone telling you that a debit card (which these visa cards are) affect your credit score are completely ignorant, the fact is that unless its an ACTUAL REVOLVING CREDIT line, it won't have any effect, some companies do manipulate the system by offering these guaranteed fund debit cards as a means to build credit by reporting them as regular credit but that's just manipulation of the system, by default they have no bearing because they are against actual funds, not unsecured credit which is the only one that affects your credit scores – GµårÐïåñ Sep 11 at 16:34
@GµårÐïåñ: Huh? The Amazon Rewards Visa is an ordinary credit card (i.e. revolving credit line), and applying for it (and opening it) does affect your credit. If you do so, you also get a gift card; I agree that what you do with the gift card has no bearing on your credit. – Nate Eldredge Sep 11 at 17:20
@NateEldredge outwardly yes, they behave as such, and use the Visa payment network, but they are no different than the debit card you get from your bank and are limited to what's available in cash to them, nothing more, they are NOT revolving credit line, therefore, NOT a credit card. Small difference with your bank's version of debit is that these are preloaded with specific amount and when done, you are done, but with the bank, you MIGHT sometimes be allowed to go over the amount you actually have. – GµårÐïåñ Sep 11 at 21:07
I think I just realized as to what the confusion was. I was referring to the reward cards that are given to customers, such as those given by many companies when you sign up for service. In this case Amazon is apparently putting it on the actual credit card as a credit. In that case yes, it is a credit card and all credit card rules apply. My apologies if the misunderstanding caused any confusion. Gift cards are not handled like credit cards, despite being Visa or MC, but actual credit cards with credit limits, yes. – GµårÐïåñ Sep 11 at 23:15

I have gotten multiple cards specifically for their sign-up bonuses. The good ones normally have some sort of required spend to go along with this, once that has been met the card normally never gets used again. I normally don't bother to cancel it, though.

Your credit rating does take a hit from the hard pull, so long as you don't do it too often it's not an issue unless you're in a position to need every last point of your credit rating.

It's rather a moot point in this case, though--you sound very credit-adverse, you almost certainly do not have a credit rating that will satisfy the issuers of cards that pay you in some fashion.

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