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There are several factors that determine your credit score. The most important things are that you make your payments on-time, and that you keep your credit utilization low. One smaller aspect of your credit score is your requests for new credit. This includes how many hard pulls there are on your credit score.
So personally I don’t mind a hard pull on my credit score (it’ll ding my score by a couple of points for two years, but then falls off; a two point drop isn’t a big deal at all), though I do everything I can to be sure I only apply for cards I’ll hopefully be approved for.
This brings me back to something I wasn’t aware of with Amex, which is potentially very useful to many, in my opinion.
Amex doesn’t pull your credit if you’re denied for a card
This was reported by FrequentMiler in 2015, though is something I wasn’t aware of. Apparently if you are an existing American Express cardmember and apply for another Amex card, your credit won’t initially be pulled. Instead Amex uses whatever data they have on file for you at first to do a soft pull to determine if you qualify. Then after you’ve been conditionally approved for a new card they actually do a hard pull, to confirm that there haven’t been any major changes (at which point you could still be denied, but it’s unlikely unless there have been major changes).
Now, I’ve never been denied for an Amex card, so I can’t personally vouch for this. However, many have confirmed that this matches their experience, so I suspect it’s true.
This essentially means that existing cardmembers can apply for an Amex card in a pretty “risk free” way, in the sense that if they’re denied they won’t get a hard pull on their credit.
When could this be useful?
In general I find that Amex cards are among the easiest to be approved for. Out of Amex, Chase, and Citi, I’ve certainly had the least trouble being approved for Amex cards, and readers’ experiences confirm this as well. This even applies for their premium cards, like The Platinum Card® from American Express and The Enhanced Business Platinum® Card from American Express.
So I’m not usually worried about whether or not I’ll be approved for Amex cards.
However, this could prove useful in another way. A couple of days ago I shared my 2017 American Express strategy, and wrote about how historically American Express has allowed people to have four credit cards and four charge cards each.
Many have reported that the limit has been raised to five credit cards, though I haven’t found that to be the case across the board. For example, I got denied when I applied for my fifth card last summer, on account of having too many cards (though I closed an existing card and then got approved for it).
So for those who aren’t sure whether or not they’re eligible for four or five cards, this could be a way to apply for a fifth credit card in a “risk free” way.
My experience applying for an Amex card “risk free”
While I believe my limit with Amex is four credit cards and I was maxed out on this, several readers insisted that the limit has been raised to five credit cards. With the above knowledge, I figured I’d apply for a card, since there’s not much downside.
I decided to apply for The Blue for Business® Credit Card from American Express, given that it’s one of Amex’s most underrated cards. I didn’t see much value in the card until I crunched the numbers recently. At the moment the card has an increased sign-up bonus, including the following:
- 10,000 bonus Membership Rewards points after making your first purchase on the card within the first three months
- 10x points at U.S. restaurants on the first $2,000 in purchases for the first six months
- 2x points on all qualifying purchases on the first $50,000 for the first year (an additional one point per dollar spent)
If you’re like me and plan on maximizing the sign-up bonus, you can earn an incremental 64,600 Membership Rewards points compared to the next best option for spend in those categories, which is incredible for a no annual fee card.
So I decided to apply, and got a “pending further review” message.
Moments later I got an email saying that a decision has been made, and that I was declined due to having the maximum number of American Express cards. I phoned up Amex, and told the friendly associate that I thought the limit had been raised to five cards, and she said she would submit the application for review and to be processed again.
The online application status page shows my application as “in progress.”
We’ll see, I guess! If I don’t get approved it’s not a big deal, especially in light of there not even being a credit pull if I get denied. On the plus side, if I do get denied, at least I’ll be able to share firsthand whether there was a credit pull or not. 😉
While I find that Amex cards are generally among the easiest to be approved for if you have good credit, it’s especially awesome that existing cardmembers won’t get a hard pull on their credit if they’re denied for a card. This is certainly a reason to consider applying for an Amex card, even if you already have four of their credit cards and aren’t sure if you’ll be approved for another.
(Tip of the hat to Elizabeth)