App-O-Rama means a strategy of submitting multiple credit card applications within a very short period of time. If you have a good credit score, you can easily make hundreds or even thousands of dollars from this technique. You can borrow money at very low cost and invest it for a high rate of return. However, App-O-Rama is not as easy and low risk as many people think. This strategy is not suitable for people who are going to take on additional credit during the next year. Read more about App-O-Rama hidden pitfalls in our article.
App-O-Rama is also known as AppORama, App-a-Rama, Application-O-Rama or just "AOR" for short. The term came from the FatWallet finance forum. App-O-Rama means the process of applying for dozens of credit cards in order to benefit from 0% APR credit lines. Lenders don't report your credit inquiries immediately, so you can take advantage of that by applying for a lot of credit cards very quickly.
Typically, people perform an App-O-Rama to take advantage of zero interest rates. They invest funds in high yield savings accounts paying 5-10% and earn thousand dollars in interest per year! Plus, you will receive countless signup bonus rewards, gift cards and other attractive freebies.
Get interested in App-O-Rama? Please note that this strategy is definitely not for everyone. Some people can really earn hundreds of dollars each month from this technique, but others can accumulate large balances. Read the following points to decide whether the application frenzy is suitable for you or not:
1. Obtaining multiple credit cards means that you are taking a lot of new debt. Can you manage your money wisely? Don't forget to mark down the expiration dates of all your zero APR credit cards on your calendar. If you are not meticulous with recordkeeping, you can miss the date when your 0% interest rate will go up. It can turn your easy income into a sudden and significant loss! You need to withdraw money from your savings account to eliminate your debts before the rates jump to 12%, 14% or more.
2. Even if you get zero interest rates, it doesn't mean that you can forget about borrowing costs. Your new plastics can come with annual fees or other charges. The most typical mistake in App-O-Rama is not paying the minimum due on each plastic. The penalties from missing or late credit card payments will wipe out any potential benefits from App-O-Rama strategy. Your interest rate can jump up to 30%! Plus you will seriously damage your credit score.
3. App-O-Rama is a good choice for people with a positive credit history who are not going to borrow money during the next year. If you are planning to buy a new car or refinance your mortgage, it's not a suitable technique for you! Your FICO score will go down due to numerous new inquiries (and higher credit card balances). Of course you can improve your credit score if you pay all your bills timely, but it can take up to two years to recover.
4. Be ready for possible denials of additional plastics from the lenders which credit cards you applied for in your App-O-Rama. So if a new juicy promo pops up, those who engage in the application frenzy may not qualify for it. Some issuers can even close your existing credit cards.