You really need to understand what you are doing and model a legitimate base case vs the card scenario. What most people fail to realize and what most card companies bank on, is you will buy things that you would not have without the card. This starts with the fee! Once you have locked in the fee you will feel the need to spend more to get your money back. Only you are not getting your money back. You are spending more!!
It's true the banks are counting on their customers to spend more and pay
higher fees. If that weren't true, this opportunity wouldn't exist for us. It's
also true that if humans were rational, there would be no casinos.
Most people I know in the CC churning game are extremely analytical
about their expenses and what their points are worth. Most of my annual fee
cards come with the first year fee waived, and I'm pretty conservative about
the value of the points/miles I earn.
Two examples of recent cards:
- Wells Fargo World Propel. Minimum spend $3K/3 months. Reward: $100 travel credit + $400 check. Annual fee waived the first year.
- Bank of America. Minimum spend $1K/3 months. Reward: 25K Alaska Air miles (transferable to air partners), $100 statement credit. Annual fee $75 (not waived).
These rewards are low (for me) because I've pretty much picked the low-hanging fruit
during my first two years of churning: Chase, Citi, Amex, Barclays, etc.
Since I dutifully track everything I spend on each credit card, I'm probably even
more frugal than before I started. Lately, unless I have upcoming reimbursable
business expenses, I actually have a hard time with minimum spend unless
I do manufactured spending.
But the most limiting factor is the tightening up of the bank terms for the signup
bonuses (5/24 Chase, 24 month Citi, 1-per-lifetime Amex). If you haven't applied
for a lot of cards recently and are disciplined enough to frugally meet the minimum
spend requirements, travel hacking can be a great opportunity. You are essentially
letting the spendthrifts fund your travel, in much the same way the lottery ticket
buyers pay for college tuition expenses in my state.