Credit card points

[dafoe1999]

What unique ways do you use to build credit card points?

[Bruised_Pepper]

Look up "credit card churning".  In a nutshell: if you have good credit, apply for a bunch of credit cards with sweet sign up bonuses, earn the bonuses, then cancel before any annual fees kick in.  There's a whole community out there who do this for air miles, but you could do it with points or cash back instead. 

[Hugh H]

Look up "credit card churning".  In a nutshell: if you have good credit, apply for a bunch of credit cards with sweet sign up bonuses, earn the bonuses, then cancel before any annual fees kick in.  There's a whole community out there who do this for air miles, but you could do it with points or cash back instead.

I imagine credit score would get a significant hit from all the credit checks...

[apoclater]

Look up "credit card churning".  In a nutshell: if you have good credit, apply for a bunch of credit cards with sweet sign up bonuses, earn the bonuses, then cancel before any annual fees kick in.  There's a whole community out there who do this for air miles, but you could do it with points or cash back instead.

I imagine credit score would get a significant hit from all the credit checks...

Initially, yes, credit checks that initiate "hard pulls" cause a 1-5 point drop in your score.  I started churning with a score of 720 and after 4 cards my score was 706. 

What matters more is your ability to pay on time, your credit utilization ratio (debt to total credit), etc.  Therefore, in the long run, the more cards you're approved for, the better your credit score should be (assuming you keep your spending at the same level).  As I said, I started off at 720 and would have peaks and valleys due to churns and time off churning.  My score is now 780.

[Bruised_Pepper]

Yeah, the hard pulls only affect your score for a certain amount of time (1 year, maybe?)  All the other important aspects of your credit score (utilization, payment history, negative remarks, etc.) can more than make up for the temporary drop.

[Hugh H]

Hard pulls stay in your score for 2 years. It may be worth it though.

[randymarsh]

I imagine credit score would get a significant hit from all the credit checks...

I have like 12 hard inquiries and my score is 722. 4 or 5 of those are within the last 12 months. Not bad since my average age of accounts is under 3 years old too. I usually see a 5-10 point drop (my most recent CC app only dropped it 2 points though) and then the hit goes away after a few months.

[ColtCeverz]

I dont know about credit card churning. I use Amex Blue. No fee they give you 5% after you’ve spent so much. I usually charge then pay off the whole bill. It works out that I have enough at the end of the year to pay for all my Christmas Presents. This year I had $750.00

[wtjbatman]

I dont know about credit card churning. I use Amex Blue. No fee they give you 5% after you’ve spent so much. I usually charge then pay off the whole bill. It works out that I have enough at the end of the year to pay for all my Christmas Presents. This year I had $750.00

Holy crap you charged $15,000 to your credit card? What, do you pay your rent with it somehow?

[kendallf]

I have opened about 6 this year; my credit score seems to be going up.  Whatever hit I've taken from the 'hard pulls' has been fleeting.  I find chasing the bonus points from an initial minimum spend to be much more rewarding than the 1 or 2% points or cash back.  I have gotten at least $2k worth of flights and hotel stays by just putting my normal spending on these cards.

I keep track of the expenditures on Mint, and keep a list of when I opened the card, what the bonus and spend requirements are, what the annual fee is, etc.  I've learned some good tips from the Million Mile Secrets blog, such as calling and converting my Chase Sapphire Preferred to a no-fee version before the annual fee came due.  This avoids the credit hit of closing a card.

I have 3 or 4 more cards in mind for next year; I'm giving it a rest for several months right now.

[Snowboard junkie]

The credit score hit becomes irrelevant when you hit the point where you really don't need to borrow money.

Similarly, the interest rate is irrelevant because nobody here should be carrying a balance. 

You have to keep an eye on whether using a credit card changes your spending habits or not.  Most people think it doesn't but studies show that it probably does increase the amount and frequency of buying vs cash. 

The tougher part is meeting minimum spending amounts to qualify for those sign up bonuses. 

[thepokercab]

The tougher part is meeting minimum spending amounts to qualify for those sign up bonuses.

So true.   I signed up for the Chase Sapphire Preferred and need to spend the $3,000 grand in three months, and it can be challenging.  Opened it up at the beginning of December, and because we've done some travel, I hit $1,000 for this month, but it will be tough in January and February.  I've seen some folks who do some creative spending using Amazon Payments and what not. Might need to give that a try. 

[CanuckExpat]

The tougher part is meeting minimum spending amounts to qualify for those sign up bonuses.  I've seen some folks who do some creative spending using Amazon Payments and what not. Might need to give that a try.

Its relatively easy once you get the hang of it, just need to be persistent and creative. Almost addictive. We're probably well over thousand in cash back and promotions just for year, not including flights; curious to add it all up…

[Hugh H]

The credit score hit becomes irrelevant when you hit the point where you really don't need to borrow money.

Always important when buying real estate for investment purposes, which is what I've started doing.

[Bruised_Pepper]

The credit score hit becomes irrelevant when you hit the point where you really don't need to borrow money.

Always important when buying real estate for investment purposes, which is what I've started doing.

Many churners have reported success with mortgages/refinancing by stopping six months to a year before applying for property financing, and others have been just fine continuing the churn throughout the process by explaining what they are doing (racking up bonuses) to the underwriter.  You can have your cake and eat your pie, too. 

[Khan]

I've had the same single credit card since I turned 18(8 years), about 2 years ago I switched it from nRewards(redeemable points in prepaid debit cards or some nonsense items) to Cash rewards(1% cash back, redeemable on demand, never expire).

That's good enough for me.

[Fireman]

I've had the same single credit card since I turned 18(8 years), about 2 years ago I switched it from nRewards(redeemable points in prepaid debit cards or some nonsense items) to Cash rewards(1% cash back, redeemable on demand, never expire).

That's good enough for me.

And once you go over the $10,000 threshold in a year (not sure if it's calendar or anniversary), the rewards increase to 1.5%.

[ColtCeverz]

Wtjbatman no not paying rent. I made a purchase of 9k for my company this year. However charges at BJ's similar to costco/ Publix and gas do add up to a nice savings every year.

[lackofstache]

I hit $1K in CC spending rather easily, on just 4 of my bills, maybe I'm doing it wrong...

In a 4 person household:
Groceries: $450
Gas: $80
Insurance (auto, home, life): $175
Health Insurance: $500

The health is reimbursed by my employer at the end of each month, but I still get the 1% back each month.
I also use the card for electricity, gas (power), phones, internet, etc.

$1k/mo of spending just doesn't seem like a lot to me even though we've significantly cut down our spending over the last 8 months since getting on board w/ MMM.

[Snowboard junkie]

in my experience credit score is not important if you are buying rental properties that meet the 1% rule and have greater than 25% equity since you should still be getting the preferred rate with those criteria.

Perhaps this is a regional variation, but i have found that using a mortgage broker and/or playing banks off against each other is helpful in that regard.

Obviously, if your own experience varies from this, you would have to calculate how much benefit you get from churning credit cards vs from a lower interest rate. 

Disclaimer: My own personal bias is to avoid long term debt like the plague, and I pay off my credit card every month.