Credit Cards – Five New Cards and 185,000 Miles/Points and $250 Cash Later: My Q3 Round of Credit Card Applications
UPDATE: I had some difficulty applying for the Chase Ink Bold 60,000 points offer before it expired so I applied for the standard 50,000 points offer the next day and called customer service to match the expired offer. I just received a letter from Chase saying they will honour the additional 10,000 bonus points. YAY!!!
I’ve been getting a lot of questions about my recent credit card applications so I thought I share why I decided to apply for so many credit cards. You see back in April, I realised just how lazy I’ve been with the whole miles/points thing (thanks Eden Song!) so I inventoried my mere 13 credit card portfolio to see if I had room for more valuable credit cards to spend my money on. And there were lots of good ones.
DISCLAIMER: Credit cards can be extremely dangerous for those that cannot control their spending and are not financially disciplined. If you cannot pay your credit card off in full at the end of every statement cycle, all the miles/points are NOT worth paying 15-25% interest. If you don’t have high enough credit score, your applications will be denied and it will lower your score even further. If you plan to take out a mortgage for a home or a loan for a car, recent inquires on your credit will impair your ability to get the best rate, or the loan. You don’t have to earn a lot, but you do need to spend less than you earn. Read more about it on Eden’s blog - Credit Score FAQ.
My goal for this credit card churn was to accrue to enough miles to fly business/first class to New York and Paris this winter. Possibly, Bora Bora in spring 2014. I need 125,000 miles per person for New York and Paris and another 135,000 miles per person for Bora Bora. Thats 520,000 miles for both trips for the family (baby is still a lap child). I usually fly United or AA so I looked at the all the travel credit cards that would maximise my earning potential. Then I applied for all these credit cards simultaneously (ie. 5 separate windows). Because whenever you apply for a new credit card, the bank runs a credit check (also known as a hard inquiry). The more recent hard inquiries on your report, the more concern a bank has that you’re possibly overextending yourself. But the trick is that the banks and credit reporting agencies are slow. It usually takes them 1-3 days to process the inquiry and update your report. Meaning, if you apply for 3-4 cards on the same day, none of them will see each other’s inquiry. So lets take a look!
I applied for two Chase cards – Ink Bold (annual fee of $95 waived for the first year) with 50,000 sign up bonus points when I spend $5k within 3 months and Sapphire Preferred (annual fee of $95 waived for the first year) with 40,000 sign up bonus points when I spend $3k within 3 months. I can transfer these points to my United Mileage account and use the miles to fly coach roundtrip to NY 3 times using 75,000 miles (worth at least $900+ assuming $300+/ticket) or fly coach roundtrip to Paris using 60,000 miles (worth at least $1,200+) but I have 65,000 United miles already so I’ll keep on accruing and fly business/first class to NY and Paris.
Why: In addition to sign up bonus points, Ink Bold offers 5X points per $1 on the first $50,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services and 2X points per $1 on the first $50,000 spent annually at gas stations and for hotel accommodations when purchased directly with the hotel. And no I don’t plan on buying $50,000 worth of post it notes to accrue the additional miles I need. There is a much simpler way to get 5X points at office supply stores… Sapphire Preferred offers 2X points per $1 on travel and dining and 7% annual points dividend.
Lucky for me, the sign up bonus for Citi AAdvantage Visa (annual fee of $95 waived for the first year) went back up to 50,000 miles just in time for my credit card applications. I could also use the miles to fly coach roundtrip to NY twice using 50,000 miles (worth at least $600+ assuming $300+/ticket) but I currently have 165,000 AA miles so maybe I’ll fly AA to Bora Bora. I just have to spend $3k within 3 months.
Why: 50,000 miles is too good to resist! You also get $100 American Airlines flight discount every card membership year, earn 10% of your redeemed AAdvantage miles back and double AAdvantage miles on eligible American Airlines purchases.
Barclays US Airways Mastercard (annual fee of $89 waived for the first year) was purely to get the additional miles I would need to fly AA to Bora Bora. US Airways has merged with AA and so the 35,000 US Airways miles will be converted to AA miles at some point.
Why: 35,000 miles with first purchase is a no brainer. You also get 10,000 US Airways Dividend Miles on your anniversary after payment of the $89 annual fee, one US Airways Club lounge pass and two $99 plus taxes companion tickets per year.
Blue Cash Preferred (annual fee of $75) isn’t a travel credit card but I realised that we spend a lot at grocery stores and it was offering $250 statement credit if I spend $1k within 3 months so I thought why not.
Why: 6% cash back on groceries (up to $6k purchase per year) and 3% cash back on gas. Even with the annual fee of $75, I’d make at least $360 in statement credit just with groceries.
So lets recap – I’ll earn 90,000 Ultimate Reward points (United miles), 85,000 AA miles and $250 statement credit. I still need 95,000 United miles and 20,000 AA miles. Hmmm…
And you might be thinking “you have to spend $12k in 3 months… thats a lot of money for a stay home mum!”. I’m not worried. I’ll be swiping these credit cards like crazy but I will only spend $60 out of pocket to get all these bonus miles/points and statement credit. How you ask? Stay tuned!!! I’m gonna start planning my trip to Bora Bora with the family!!!