Tuesday, August 26, 2014

Father's Fall Application Round

Typically, August is when everyone in NYC goes on their final summer vacations - especially this week heading into Labor Day Weekend.

However, we did most of our traveling already in June (Switzerland and Israel) and July (Italy and Greece), so we've been enjoying our own New York and the amazing weather the past few weeks.

So with the extra free time not spent at the airport nor in hotel rooms, my father has been reviewing our frequent flyer miles and hotel point balances. He's trying to figure out which ones we need to re-stock, now that our big 2014 trips are over.

We seem to be OK on hotel points (a healthy stash of 110,000 Starwood SPG points, 100,000 IHG Reward points and 97,500 Club Carlson points). Frequent flyer miles seem to be good as well (500,000 American Airline AAdvantage miles 300,000 United MileagePlus miles, and 222,000 British Airways Avois). In addition, we have another 288,000 Chase UR points that can be transferred into United Airlines or Hyatt Hotels instantly.

But since it had been about 5-6 months since my father's last credit card application round, he thought he should get in one last set of travel reward credit cards before 2014 closed out. Luckily, there were some decent limited time offers available, including:

1. Chase United Explorer Visa (50,000 miles) - fee waived first year
2. Citi American Airlines Mastercard (50,000 miles) - fee waived first year
3. American Express Everyday (10,000 points) - no annual fee
Big Warning If you have any debt at all (student loans, credit card, personal loans or mob gambling debt), then you're better off not opening more credit cards, because you're probably spending more than you're making and ruining your future. The last thing you need is another credit card. 
  • The credit card companies will only issue these premium reward credit cards to individuals with high credit scores (above 700 FICO). Applying and getting rejected hurts your score even more, so don't try until you're confident you'll get approved. 
  • The points and miles you earn (valued at up to 2-4% of your spend) will be negated if you carry a balance and have to pay 15-25% interest. All that money you're paying in interest and late charges could pay for the trips you're trying to get for free. 
  • And if you have trouble overspending, keep in mind that the average person spends 15% more when they use a convenient plastic credit card to make purchases instead of using hard earned cash. Something about seeing your empty wallet makes you thing twice about buying that extra Starbucks.
Given we were so flush in miles/points, we didn't think it made sense to apply for cards with an annual fee, so we skipped the Amex Business Platinum card ($450 fee for 100,000 points), the Bank of America Alaska Airlines card ($75 for 25,000 miles) and the Barclays US Airways card ($89 fee for 40,000 miles).

We didn't have any strong needs for specific points, so we just went with the best available offers in the loyalty programs we liked having (United, American and Amex). So here's how he fared on his no/waived fee applications:

Chase United Explorer Visa
Type: Personal card
Bonus: 50,000 United miles
Min Spend: $2,000 in 3 months
Other: $50 statement credit after first purchase and 5,000 additional miles for adding authorized user

My father actually had this card twice before already. Back sometime around 2005 he had the Chase Continental Explorer card (before the United merger). Then in 2011, he applied for the Chase United Explorer card and received a 50,000 mile sign up bonus plus an additional 5,000 for adding my mother as an authorized user. Now Chase typically only gives sign up bonuses once per card, but they added language in the terms and conditions that states that you can be eligible for the bonus again IF you have not received the bonus within the past 2 years. Since 2014 minus 2011 is > 2, my father's prospects were looking good!

Unfortunately, he was not instantly approved online. So he waited an hour and then called the Chase Reconsideration Line to "offer any additional information regarding his application." In addition to confirming his annual income and rent expense, he dropped in some facts about his 100% on time payment history and long relationship with Chase Bank. The representative said everything looked good and that he would re-submit the application with his recommendation, but then it went to "a final review" that would require a few weeks.

Now, my father knows that no one wants to give bad news to applicants. So most company's standard operating procedures call for the "you will receive our decision in the mail" message to let the poor representatives from having to get yelled at. But then again, a similar process happened with his Chase Hyatt Visa card back in Feb 2013 as well and he was ultimately approved for that. So it's a bit of a toss up how things will play out.

OUTCOME:  Pending

[UPDATE: 8/29/14 - My father's Online Chase account now shows the new Explorer card, so looks like he was approved]

Citi American Airlines Mastercard
Type: Personal card
Bonus: 50,000 American miles
Min Spend: $3,000 in 3 months

My father had applied for the Visa and Amex versions of this card back in July 2012. Then in 2013, he negotiated another free year for the Visa, but closed his Amex before the $95 annual fee hit. So this past summer, when the Visa fee was hitting, he ended up downgrading it to a no fee Citi Dividend card to keep the credit line open. But now, he was without an American Airlines card.

Of course, LCD readers should know by now that my family usually flies on United Airlines domestically and their Star Alliance partners internationally, but we do fly American Airlines from time to time when we redeem our British Airways Avios for flights on AA. If that last sentence made your head spin, then be thankful you're not a points/miles nerd like my father.

With this card, we get additional perks such as 10% mileage award rebates (which will come in handy should we redeem any of our our 500,000 AA miles), free checked bags and priority boarding. Since we have NO status whatsoever with American, these perks definitely come in handy when we fly American to Chicago to visit our friend's painting business (Five Star Painting IL) next month.

The online application went to Decision Pending, but there was a popup window offering an Online Chat with one of their representatives. This feature is great since it saves my father from having to call the Reconsideration line and can offer him a written transcript of the conversation. After answering a few questions and moving some credit lines around, he was approved on the spot!

OUTCOME: Approved!

American Express EveryDay
Type: Personal card
Bonus: 10,000 Membership Reward points
Min Spend: $1,000 in 3 months

Compared to the other 50,000 mile bonuses, this sign up offer was pretty sub-standard by all accounts. However, the card itself has no annual fee and therefore allows my father to keep it indefinitely.

If you recall, last January 2013 he applied for a 100,000 MR offer for the Platinum Amex card which he then closed in January 2014 before the $450 annual fee was due. He also had applied for a 75,000 MR offer for a Gold Business Amex in May 2013 that he closed in May 2014. Since he didn't value paying a $175 annual fee just to keep his Amex MR points, he had to redeem or transfer all of them to airlines before closing his last Amex MR card. But since this Amex EveryDay card has no annual fee, he can house all his future MR points without having to unnecessarily redeem or transfer.

Plus, now my parents have another two American Express cards to use for Small Business Saturday in November! If it's anything like last year, that's another $20 of free stuff...hopefully $50!

This would be his fourth active Amex credit card (others being SPG Personal, SPG Business and Hilton).

OUTCOME: Approved!

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