Credit Card Sign-Up Bonus Gluttony: Probably Not a Viable Travel Rewards Strategy for Most of Us
Rapid fire card applications could bring potential credit issues
A couple of weeks ago, Gary Leff of the View from the Wing blog, wrote about how he applied, and received instant approval, for five credit cards over the course of a weekend. The cards – four business cards and one personal card – will yield him 460,000 bonus points and miles (or around 500,000 when including the points and miles he will earn for the spending needed to reach the bonus thresholds).
The cards that will soon appear in Gary’s mailbox are:
- The American Express Business Platinum card – He gets 150,000 Membership Rewards points after spending $15,000 in the first three months.
- Chase INK Preferred Business card – 100,000 Ultimate Rewards points after spending $8,000 in the first three months.
- CitiBusiness Advantage Platinum Selection Mastercard – 65,000 American miles after spending $4,000 in the first four months.
- Alaska Airlines Visa Business card – 75,000 Alaska miles after spending $4,000 in the first three months.
- Alaska Airlines Visa card – 70,000 Alaska miles after spending $3,000 in the first three months.
The clock for spending enough to meet a card’s bonus threshold starts as soon as you are approved (not when you receive the card in the mail and activate it). Some quick math shows that Mr. Leff needs to put $34,000 on his new credit cards in the next three months to get all those bonuses.
View from the Wing is a popular travel blog, and I am sure Leff is good for the minimum spend and then some. However, I do not believe that this approach is feasible for most people. There is the high level of spending in a brief period of time, of course. And the total annual fees for these five cards will approach $1100.
A greater concern could be the impact that moves like this could have on most Americans’ credit ratings and their relationships with banks. Leff was smart to apply for all these cards at about the same time and to spread his applications out among four card issuers -- Amex, Chase, Citi (American Airlines), and Bank of America (Alaska Airlines). But, a credit card application generates a “hard pull” with credit reporting agencies and banks get nervous when they see an applicant who has applied for multiple sources of credit in a short period of time. Perhaps Leff applied for the five cards faster than information about his “hard pulls” could appear on credit reports and the different banks did not know what was afoot. I would be interested in knowing how his bold move will affect his FICO score going forward as well as his ability to pick up his next credit card.
Points and miles blogs have lots of interesting and entertaining anecdotes but much of what the bloggers do and write about is impractical for most Americans. The Travel Rewards Optimizer plans we create are designed to fit with our clients’ routine spending so that they can have a predictable, reliable, and sustainable source of free and reduced cost travel for years to come.
We are ready to help you turn your routine credit card spending into the travel of your dreams.
