Q2 Credit Card Churn

Sorry that it's been a while since my last post, but to be honest, there wasn't a lot going on the past 2 weeks aside from us returning home and getting settled back into our NYC daily lives.

But yesterday was my mothers Credit Card Churn day. Recall, 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. I mean, would you want a babysitter who is constantly looking for a new job or one who is 100% committed to you?

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!

DISCLAIMER:  Credit cards can be extremely dangerous for those who are not financially disciplined and cannot control your spending. If you cannot pay your credit card off in full at the end of every month, all the points and miles are NOT worth paying 15-25% interest. If you don't have a high enough credit score, you will be denied and lower your score even further. If you plan to take out a mortgage for a home or a loan for a car, recent inquires will impair your ability to get the best rate, or a loan at all. You don't have to earn a lot, but you do need to spend less than you earn. Please re-read this post about Credit Score FAQs.

So back in February, my father did his Credit Card Churn and received 4 new credit cards.

• Chase Hyatt Visa - $75 annual fee, but got a $100 statement credit; 2 free nights in a suite for spending $1k in 3 months; 3x points for Hyatt spend; 2x on restaurants (Booty Call Card) 
• Citi Thank You Preferred Mastercard - no annual fee; 6,000 Thank You points for $300 spend in 3 months; 5x points for gas, groceries and drugstores for 12 months (Marriage Card) 
• Citi American Airlines Business Mastercard - $95 annual fee but waived the 1st year; 35,000 miles for $1,500 spend in 3 months (One Night Stand Card) 
• Barclays US Airways Mastercard - $89 annual fee but waived the 1st year; 35,000 miles after 1st purchase (One Night Stand/Booty Call Card)

And in May when American Express ran a special 1 day promotion for 75,000 Membership Rewards for their American Express Business Gold card, my father broke protocol and applied for that card as well. Since he was going to have 1 inquiry in May, he decided to take a chance on applying for a personal card, the Chase Sapphire Preferred Mastercard.

Mom's Churn

But now it was my mother's turn to churn. So as June approached, it had been almost 6 months since her last round of applications. With the mandate help of my father, she went for the following cards.

• Chase Ink Bold (Business Card) - $95 annual fee but waived the 1st year; 60,000 Chase UR points after spending $5,000; 5x on telecom, office supply spend; 2x on gas stations and hotels (Marriage Card)
• Chase Sapphire Preferred Mastercard (Personal Card) - $95 annual fee but waived the 1st year  40,000 Chase UR points after spending $3,000; 2x on dining and travel (Marriage Card)
• American Express Starwood (Business Card) - $65 annual fee but waived the 1st year; 25,000 SPG points after spending $5,000; 2x on Starwood hotel spend; 5% OPEN Savings at select merchants (One Night Stand Card)
• Citi Thank You Preferred - No annual fee; 15,000 Thank You points after spending $1,000 (One Night Stand Card)
• Discover IT - No annual fee; rotating 5% cash back categories every quarter (Booty Call Card)

In addition to applying for new cards, she needed to cancel some old cards that were coming up on their annual fee.

• Citi Thank You Premier - $125 annual fee; allows you to use Thank You Points at 1.33 cents/pt for airline redemptions
• Chase United MileagePlus Explorer Card - $95 annual fee; provides primary insurance for car rental; United Airline benefits (free checked bag, priority security and boarding, 2 annual United Club Lounge passes)

Results

This round was a bit mixed, but could be a great round.

• Chase Ink Bold (Business Card) - Pending Review. My parents called the Chase Reconsideration Line for Business Cards (800-453-9719) a few hours later and were told to call back next week. Apparently the Small Business promotion that Chase is running this week (60k points instead of the usual 50k points) led to a lot of applications and their approval department is overwhelmed. We'll see what happens.
• Chase Sapphire Preferred Mastercard (Personal Card) - The Mastercard version is no longer offered.
• American Express Starwood (Business Card) - Approved instantly! She already has the Personal SPG Amex, but now she'll have the business card version. In her application, she put my father's SPG number, so now all their points from credit cards will consolidate into his account. She could have also put her number in and just transferred the points later (free for spouses), but this way is easier.
• Citi Thank You Preferred - Approved! We did have to online chat with a Citi representative who asked a few follow up questions: What my mother does for a living (child care professional!), our total savings/investment account balances (enough), if she had a nice weekend (yes) and our monthly rent (too much!).  They approved her with a $2,000 credit limit, but offered her the option to shift $4,500 from her Citi American Airlines Amex ($15,000 limit) to the new Thank You card for a total of $6,500 credit limit.
• Discover IT - Pending Review. I'm sure my father will call their reconsideration line later to make sure things are in order. [UPDATE:  Approved on June 19!]
• Citi Thank You Premier - We called to cancel the card (but was hoping they'd make us an offer to keep it open). Because we knew we'd be making this call in June, we started spending on this card for the past few months to show Citi that we were active users. After explaining that the $125 annual fee was leading us to cancel the card, they transferred us to the Retention Department where they made us an offer of a $125 statement credit (to offset the fee) if we spent $4,500 in the next 3 months. My father (who never takes the first offer) explained that was a lot of spend, and they made a second offer: $75 statement credit if we spent $1,000 in the next 3 months.  Deal! So now we'll have this card for another year for $50 (net of the statement credit) after a little help from Amazon next month.
• Chase United Mileage Plus - In our experience, Chase is pretty tough about retention offers. Meaning, they don't make any. They see value in their products and expect you to pay for them if you want them. So likely, we'll cancel this card, but have kept this open for the next week - in case our Ink Bold application chances are improved if we "sacrificed" this MileagePlus card.

So 2 Approvals, 2 Pendings, 1 Not Available, 1 Retention Offer and likely 1 Cancel.  Hopefully we'll get those 2 approvals for 4 new cards. If those get approved, then we'll have $12,000 to spend in the next 3 months. [UPDATE:  3 Approvals, 1 Pending as of June 19]

All this stuff makes a lot of people nervous, but as my father tells me, "It's all a part of the game, and it's 100% legal. The Credit Card companies WANT you to sign up for more cards." However, I still get worried watching from the sidelines that my college fund is going to quickly evaporate! But my mother tells me, "Don't worry, you're father's way too cheap to ever spend too much!"