Anatomy of a Credit Card Churn, Part II

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cARD-crop About 10 days ago, I did what we in the Biz [:-)] call an App-o-Rama. No, I’m not going on a shopping spree, and I don’t borrow money from the banks because I’m desperate for credit. In fact, I don’t need all these new tens of thousands of dollars in new credit, because I never use it. I couldn’t care less. The only thing I crave for are those incredibly delicious sign-up bonuses.

Why? Because all those bonus miles and points equal free travel. Travel I love. Free I adore!

I got my last two cards delivered in the mail just about now. Here is the total tally.

Chase Ink: 50K UR points bonus $5K spend in 3 months.

Amex Plat: 100K MR points bonus, $3K spend in 3 months.

Citi Hilton: 50K Hilton points bonus $1,500 in 6 months.

Citi Biz AA: 50K American miles bonus (plus other bennies) after $3K spend in 4 months.

Hawaiian BOA: 35K Hawaiian miles (or 70K Hilton HHonors points) bonus after $1K spend in 4 months.

Hawaiian BOH: 35K Hawaiian miles (or 70K Hilton HHonors points) bonus after $1K spend in 4 months.

US Bank Club Carlson: 85K CC hotel points after $2,500 spent in 3 months.

What’s the catch? The total required spend on those cards is frightening. I’ll have to spend over $20,000 within the next 3-6 months in order to get all bonuses. To make things even “worse”, some of these cards come with annual fees; and in case of Amex Plat — the whopping $450 annual fee. By the way, in regard to Amex Plat, please read my previous post that explains what exactly you get out of this incredible card before you completely write me off as a credible person.

But this 7-card application must’ve totally destroyed my credit score, right? Yeah right! By the whole 8 points, still leaving my credit score in the “excellent” territory. To tell you the truth, though, I do expect my credit to slip a little further, when it gets reported by all credit agencies. I expect a slip around 20 points across the board. I also expect it to regain its ground within the next 3 months. I will keep you posted.

This diagram shows you my Credit Karma FACO score decline in the last 10 days (I applied on Jan 7th).

Score

 

And all I‘ve got to show for it is “just” about 500,000 miles and points. Big deal, right?

Well, it kinda is.

The numbers themselves never tell the whole story. But what those numbers can do might be very telling.

1. 50,000 Ultimate Rewards points strategically transferred to certain airline programs will get me 2 RTs in North America (or 1 in First class), or 1 roundtrip to Europe. Transferred to some hotel programs, like Hyatt for example, it will buy me 2 nights at the most expensive Hyatts in the world, such as Hyatt Place Vendome in Paris, where a room can go for $500 a night or more.

2. 50,000 American Airlines will give me about the same number of flights.

3. 100,000 Membership Rewards points strategically transferred to certain airlines will get me 4 RTs in North America (or 2 in First class), or 2 roundtrips to Europe (or 1 in business).

4. 50,000 Hitlont HHonors points from Citibank could “only” give me 3-5 nights at a cheaper Hilton hotel, but combined with 140,000 points I can get from transferring my Hawaiian miles into HHonors — I’d have enough for a 5-night stay at the most expensive Hilton property, such as a Conrad or Waldorf Astoria.

5. Although, I’m not sure I’ll be willing to part with my Hawaiian miles just yet. 70,000 miles is enough to take me and my wife from the East Coast to Hawaii (if she manages to conquer her fear of flying that far). And since she has about 40,000 Hawaiian miles of her own, it appears we could get a free flight for the whole family. I guess, my kid is in luck.

6. US Bank Club Carlson 85,000-points bonus may get you up to 15 free nights in the US, Europe, Central and Latin America if you redeem smartly. Or, with just a tiny little effort, you could get a 3-night stay at the best and most expensive Radison out there.

I’ll leave you to do the calculations, but I hope it’s clear to you at this point that we are talking about thousands if not tens of thousands of dollars in savings. That makes it all worthwhile in my book.

So do I recommend you follow in my footsteps? Good lord, no! This is an extreme “churn”, and believe me, I have a few tricks up my sleeve to help me handle the spend that you might find monstrous. If you are a newbie, do not go there. I mean if you put a lot of money on credit cards anyway, then it shouldn’t be a problem for you, but if you are thinking about doing your first App-o-Rama, and you’re not the king of spend, then you owe it to yourself to check my book that will help you to start the easy way:

THE LAZY TRAVELER’S HANDBOOK: USE FREQUENT FLYER MILES TO TRAVEL THE WORLD FOR FREE.

 

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