In life, they say that timing is everything. This definitely holds true in the points world, and examples abound. If you’re not on your toes, or if you’re not properly informed, you might not get the most “bang for your buck” on deals or opportunities with credit cards.
First of all, make sure your credit is in good standing. I cannot stress this enough. Quite simply, your gateway to nearly free travel is your credit score and how you manage your credit. There are thousands of people who travel using nothing but points they earned for free plus a little cash for taxes, but they would not be able to do so without solid credit scores and constant management of their credit.
It is also worth mentioning that no travel nut I’ve come across or read about carries a balance on any credit card. They all pay off everything, every month. The reason for this is because carrying a balance poses some risk to the bank. The fact that you’re borrowing on credit means you’re willing to pay more (interest) in favor of waiting longer to pay, presumably because it would be easier to pay at a later time. NOT a good idea. You want the banks to think you’re a NO RISK person. That way, they’ll issue you more credit without having to think twice.
I’m not going to claim to be an expert on credit scores. The Points Guy has a great article on creating/improving your credit, and there are tons of other resources out there. Google is your friend!
So why does this really matter? Because when your credit is in good standing, you’ve paved the way to what people in the points game call “credit card churning.” Basically, it’s signing up for multiple credit cards at a time (usually 2-5) several times a year, but spaced out intelligently so that your credit score remains as high as possible, and for the sole purpose of earning lots and lots of points.
The magic number here is 3 months. After you apply for 3-5 credit cards in a single day, you should wait 3 months before applying again. There are multiple reasons for this. To start, I’ll quote The Points Guy who said it’s a good idea to do all applications in a single day “since credit inquiries are only reported once a day, which means none of the companies would know that I was applying cards with the other credit card companies, thus increasing my chance of getting approved with each.”
Also, credit issuers seem to care less about hard inquiries on your credit after the 90 day mark, making it easier to apply for more cards at that point. This also happens to have the added benefit of spreading out the minimum spend requirements and allowing you to take advantage of any limited time bonus offers.
I think it’s appropriate now to give you a step-by-step process of an actual credit card churn:
- Know your credit score.
- If you’re score is good enough, decide which credit cards will help you achieve your travel desires. See Part 1 for figuring out what you desire.
- Determine if you can meet the minimum spend requirements – This one is important.
- Travel for nearly free!
I’ve already covered Steps 1-2. Step 3 is extremely important because your churn would be useless if you can’t meet the spend requirements. Issuers of credit cards usually require you to spend a certain amount, say $5K, within a certain time period, say 3 months, in order to earn the special bonus points that you want. In recent years the trend has been increasing spend requirements, but luckily there are plenty of ways to achieve them. Still, not everyone can sign up for 5 credit cards and drop $30K in spend in 3 months to earn all those points. If you can, awesome. If not, it’s time to get creative.
It’s worth noting that there are TONS of ways to meet your minimum spend requirements. Some of them are obvious, some less obvious, and some border on being unethical to some (while others think it’s fine). Much smarter people than I have written about this topic, so I’ll defer to their expertise here and here, while Frequent Miler has seemingly made a profession out of doing it here and here, and lots of other places. Oh, and Target seemingly made it easy for us a couple of weeks ago, which I wrote about here.
Now for a couple of other tips and tricks that will help you get started with your first churn.
CHASE – Has some of the absolute best offers, and very wide variety of cards, but it can be tough to get approved over and over again. To improve your odds, I recommend applying for only ONE chase card every 3 months. People have definitely been approved for more than one, but it’s usually one personal and one business. For best results, apply for a personal card first, then a business card after 3 months, then a personal card after 3 more months, etc. etc. to infinite. This will increase your odds drastically.
If you get denied, don’t give up! You can actually convince them to approve you by shifting credit from one card to a new one, or saying that you need the new card for whatever benefit it comes with (i.e. I said I wanted the Sapphire because it has no foreign transaction fees, which was important since I travel abroad a lot). They’ll work with you! Call them at 1-888-245-0625 for personal cards and 1-800-453-9719 for business cards.
Of course, there are no actual “rules” for applying for Chase cards. Like I mentioned, they’ll work with you. I applied for 3 Chase cards in 5 months and got approved for all 3, but had to call the reconsideration line for the last 2. It’s not advisable to do that, however, but what I mentioned above is a very good strategy for being approved consistently.
American Express – The other major source of lucrative credit card offers is from Amex. Thankfully, Amex is generally MUCH easier than Chase, though you can still have some difficulties. You can generally apply for multiple Amex cards in a day and get approved for all of them. You’ll be much better off if you can mix in some business cards with personal cards, and anything beyond 3 cards in a day is really pushing it. I recommend doing 2 cards max, and if possible do one business and one personal.
If you get denied, fear not! Amex also has a reconsideration line. Call 1-800-582-6471 for both personal and business cards, but go here first to confirm your application status.
Citi – Not nearly as many offers from Citi as the two above, but there are still some opportunities to be had. The trick with Citi is called the “two-browser trick” in which you can apply for two cards simultaneously for minimal credit impact and maximum approval chances. Million Mile Secrets has a detailed explanation of how to go about doing this.
Other – Everyone else includes the likes of Bank of America, US Bank, Barclay’s and the like. There are no real rules for these ones, so generally pick just one of these at a time. Options are limited anyway, so it’s doubtful you’d want more than one.
When you put it all together, You can potentially apply for a Chase card and two Amex cards today and have a business class ticket to Europe along with hotel stays for almost FREE after you hit those spend requirements. How? Glad you asked!
Chase Ink Bold Business Card- You’ll get a 50K points signup bonus. That’s a one-way business class trip to Europe on a Star Alliance carrier if you transfer the points to and book through United Airlines. Score!
Amex Mercedes Benz Platnium – Another 50K signup bonus. Transfer the points to Singapore Airlines for another Star Alliance business class flight back home. Score again!
Amex Starwood – Only a 30K signup bonus, but these are the most valuable points in the points world. How about the Sheraton Istanbul Maslak Hotel? This bonus will get you 4 nights there, and you’ll still have 2K points leftover! Wooohooo!
You just got a 5 day, 4 night, business class vacation to Istanbul, Turkey for nothing but good credit, smart use of credit card applications, and a few hundred dollars in taxes. Not bad!
But remember…timing is everything!
Next up in the Beginner’s Guide series will be Part 3: It’s Good to Diversify…Usually. Look for this post in the coming days!
Beginner’s Guide to Points – A 5-Part Series