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Moving can be an expensive endeavor, especially if you're planning a long-distance relocation or you're moving into a larger space and need to buy furnishings. A new credit card can potentially help you get some value back on those expenses and possibly even save you money on interest.
Before you apply for one, though, consider your credit situation and your spending habits to determine whether it's the right move for you. Here's what to consider.
Benefits of Getting a New Credit Card Before Moving
Credit cards can come with a lot of different perks that you can take advantage of, particularly if you're expecting a lot of expenses in the near future.
Many rewards credit cards offer an intro bonus after you meet a minimum spending requirement (often ranging from $500 to $5,000) within a few months. Depending on the details of your move, you may be able to earn a bonus with just moving expenses or by purchasing new furniture after you move.
If you're not a big spender in general, having a lot of expenses in a short period could make it possible for you to access a bigger bonus than you'd normally be able to qualify for with your regular spending habits.
Intro 0% APR Promotion
Many credit cards, including some rewards cards, offer an intro 0% APR promotion on purchases, which can typically range from 12 to 21 months. During this period, you can make purchases and pay them off over time without incurring interest charges—just make sure you pay at least the minimum amount due every month.
Depending on your expenses and your budget for paying off the debt, you could potentially save hundreds of dollars in interest charges with one of these promotions. And if the card also offers an intro bonus, you can earn that too.
Bonus Rewards Categories
Some credit cards offer bonus rewards when you spend money with certain retailers. For example, you may be able to earn extra cash back, points or miles at furniture stores, home improvement stores and other home supply retailers.
That said, it might be best to avoid store credit cards that are tied to just one retailer. These cards often don't allow you to use your card anywhere else, limiting the value you can get. If you're thinking about getting a retail credit card, look for a Visa or Mastercard logo, which indicates that you can use the card anywhere those payment networks are accepted.
When to Avoid Applying for a New Credit Card Before a Move
While there are some clear benefits to getting a new credit card leading up to a move, there are some things to consider before you proceed.
For starters, if you're trying to get a mortgage, it's crucial to avoid applying for any other credit until your mortgage closes—adding a new credit card could jeopardize your ability to get approved for the home loan.
Even after your mortgage closes, here are some situations where it might not make sense to apply for a credit card before moving:
- Your credit needs some work. Credit cards that offer intro bonuses, intro 0% APR promotions and high rewards rates are typically reserved for consumers with good or excellent credit. That typically means a credit score of 670 or above. If your score is below that, you might not qualify for a card with the features you'd want for a move.
- You're concerned about overspending. During the moving process, it can be difficult to keep track of your expenses. If you've had issues with overspending in the past, be careful to not let the incentive of an intro bonus or 0% APR promotion tempt you to spend more than you would otherwise. Even with an intro 0% APR benefit, interest will eventually kick in if you can't pay off the balance in time.
How to Choose a New Credit Card
If you've decided to apply for a new credit card to make the most of your moving expenses, here are some things to consider as you decide which card is right for you:
- Your moving costs: If you're going for a card with a big intro bonus, try to estimate what your moving expenses will be to determine whether you can meet the minimum spending requirement for the cards you're considering (without spending unnecessarily). You may also try to find a card that offers bonus rewards in the spending categories you expect to spend a lot in.
- Ongoing expenses: While a new credit card can make the moving process more rewarding, you'll also want to consider the long-term value of the cards you're comparing, so you can keep using them long after your move.
- Your need for interest savings: If you anticipate that you'll be able to pay off your credit card balance quickly, you may not need a card with an intro 0% APR promotion. But if you're overwhelmed with the prospect of your upcoming expenses, it may make sense to prioritize a long 0% APR benefit over other features.
- Preferences: If you're going for a rewards credit card, consider whether you want to earn cash back, points or miles. If you're looking at travel credit cards, compare different travel programs to find one that aligns well with your travel habits.
Get Matched With the Right Credit Card for You
Comparing credit cards can be time-consuming, especially if you're not sure what you qualify for based on your credit history. With Experian CreditMatch™, you can get matched with credit cards based on your credit profile. You'll also be able to compare cards side by side, making it easier to determine which one is the best one for you.