First Foray into CC Churning!

[HPstache]

I'm thinking about getting this card for a $3,000 expense I have coming up.  Any drawbacks so far, OP?  Can you cancel before the first annual fee hits?

[DadJokes]

How would I combine this with selling trade lines?

I want to be able to take advantage of signup bonuses every two years with Chase cards, so I would need to close the account before I could use the bonus again two years later, right?

Do I just keep cards without an annual limit as well, so that I can extend the credit history? That seems like a lot of credit cards to keep around.

[therethere]

My plan is to just keep around the no fee cards and use them once they hit two years. Based on my recent cards that only means I can use one for tradelines. I'm going to stop that after about 8 AU's and then I guess I'm done for awhile. Personally, with my UR stash I would not risk putting any Chase cards up for tradelines in the case they close accounts and I lose my points. I like my Sapphire Reserve too much to risk it.

[Trifle]

FYI chase and Amex have been sending out 1099's for referral point bonuses...…..just the latest curve ball churners have had to deal with from the big banks.  Of course this came with no warning at all.  Screwed quite a few people that pushed them over the limit on income when it comes to ACA and other things.

Are you sure it wasn't for bank account bonuses?

Per Investopedia, if you met a spending requirement to get points (ie, 40k points after 4k spend or something) then it is considered a post purchase discount, and is non-taxable. The same is true for 2% cashback, etc as you have to spend to get the points. If you got points/cash just for opening an account and depositing your own money into the account, then it IS taxable income.

First I have heard about this.  FWIW, I got signup points from a Chase personal card this past year plus a Citi business card, and have not gotten any 1099s.  Both of them had a minimum spend. 

[Duke03]

No the 1099s are not for bank bonuses they are for referral bonuses.  Chase didn't send out a 1099 for a referral bonus unless you made over $600 in referral bonuses from them.  The added kicker was they also counted an annual fee credit or refund into their formula.  So if you did two CIP referrals plus got two annual fee credits you'd get a 1099.  AMEX sent out 1099s for any and all referral bonus points no matter the amount.  AMEX screwed a lot of folks because they counted Marriot points as 1 penny per point for 1099 values.  This is total bs when a lot of times through out the year you can buy Marriott points for 1/2 a penny per point.  The smart money is these banks got a side letter from the IRS allowing them to do this and allowing them to write off millions of dollars in expenses.  This really screwed a lot of hard core churners......

[Trifle]

No the 1099s are not for bank bonuses they are for referral bonuses.  Chase didn't send out a 1099 for a referral bonus unless you made over $600 in referral bonuses from them.  The added kicker was they also counted an annual fee credit or refund into their formula.  So if you did two CIP referrals plus got two annual fee credits you'd get a 1099.  AMEX sent out 1099s for any and all referral bonus points no matter the amount.  AMEX screwed a lot of folks because they counted Marriot points as 1 penny per point for 1099 values.  This is total bs when a lot of times through out the year you can buy Marriott points for 1/2 a penny per point.  The smart money is these banks got a side letter from the IRS allowing them to do this and allowing them to write off millions of dollars in expenses.  This really screwed a lot of hard core churners......

Ah got it.  Referral point bonuses.  Thanks.   

[jnw]

So I gather:

Reward points :  non-taxable and not reported to IRS whatsoever.
Bank Bonuses: 1099-INT interest income (passive income, not subject to self employment taxes)
Referral Bonuses: 1099-MISC (earned income subject to self employment taxes)
Tradelining: 1099-MISC (earned income subject to self employement taxes)

The last two make sense to me since you are getting paid for work.

[topshot]

How would I combine this with selling trade lines?

I want to be able to take advantage of signup bonuses every two years with Chase cards, so I would need to close the account before I could use the bonus again two years later, right?

Do I just keep cards without an annual limit as well, so that I can extend the credit history? That seems like a lot of credit cards to keep around.

One, it's not recommended to use Chase for tradelines because when they close one account they will close ALL your accounts.

Two, it's 48 months before being eligible for the same bonus again.

Yes, generally, you should keep no-fee cards open. Just don't use it for tradelines (if it's a Chase card).

[jojoguy]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

[jnw]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

Awesome, are you going to purchase a few more hundred on the card? In case there is some misc return?  I usually go over 200-300 dollars just to be safe.

I just got my $500+ statement credit to the Chase Sapphire Preferred the other day. :)

[kpd905]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

FYI, you can just set up Auto-pay to pay the Statement Balance and you won't have to log in to pay the card after every transaction.

[jnw]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

FYI, you can just set up Auto-pay to pay the Statement Balance and you won't have to log in to pay the card after every transaction.

Maybe he doesn't like seeing credit card debt build up in Personal Capital each day?  I can see how it can cause psychological damage :)   I pay my once per month and sometimes I am shocked how high it gets quickly.  Fortunately I just categorize everything as discretionary or not and I can quickly see if I am doing okay.

[Morning Glory]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

FYI, you can just set up Auto-pay to pay the Statement Balance and you won't have to log in to pay the card after every transaction.

Maybe he doesn't like seeing credit card debt build up in Personal Capital each day?  I can see how it can cause psychological damage :)   I pay my once per month and sometimes I am shocked how high it gets quickly.  Fortunately I just categorize everything as discretionary or not and I can quickly see if I am doing okay.

I am the same way. I like to pay off the entire balance of my cards twice per month when I get my paycheck, instead of waiting for the statement to post. I just don't like loose ends.

[bacchi]

So I gather:

Reward points :  non-taxable and not reported to IRS whatsoever.
Bank Bonuses: 1099-INT interest income (passive income, not subject to self employment taxes)
Referral Bonuses: 1099-MISC (earned income subject to self employment taxes)
Tradelining: 1099-MISC (earned income subject to self employement taxes)

The last two make sense to me since you are getting paid for work.

If the bank bonus was for the simple act of opening an account, it's taxable. If you had to use a debit card 10x/month to get the bonus, it's a rebate/refund.

That's how I'm handling my taxes. No 1099-INT* and bonus earned by debit card activity = not taxable.


* I didn't receive a 1099-INT for my Chase bank bonuses.

[kpd905]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

FYI, you can just set up Auto-pay to pay the Statement Balance and you won't have to log in to pay the card after every transaction.

Maybe he doesn't like seeing credit card debt build up in Personal Capital each day?  I can see how it can cause psychological damage :)   I pay my once per month and sometimes I am shocked how high it gets quickly.  Fortunately I just categorize everything as discretionary or not and I can quickly see if I am doing okay.

Just seems like a lot of extra effort to me.  The only problem with this method is that sometimes people will pay their card off after every transaction and then wonder why their credit score isn't going up.  It is because they have 0% utilization by having no statement balance every month.

[Roadrunner53]

My electric company doesn't take normal credit card payments. If you do use a credit card, they make you pay thru Western Union. They will of course take checks, money orders an debit cards. Anyone know of any kind of a work around on this? I like to use my Costco Visa for as much as I can to get the cash reward at the end of the year. The Western Union charge is $2.25 and I would only earn $1.00 per $100 charged on my Visa card. So by doing Western Union I would lose money. GRRRR!! I have several other bills that are the same situation like my town taxes.

[kpd905]

@Roadrunner53 the only way I can see to make it profitable with a 1% back card would be to buy Visa gift cards at a grocery store with 4x fuel rewards points (Kroger), but even at that point the margin is probably pretty slim.

Using a 2% back card or hitting a sign up bonus that gives you 10-50% back makes paying the fee a lot more palatable.

[robartsd]

My electric company doesn't take normal credit card payments. If you do use a credit card, they make you pay thru Western Union. They will of course take checks, money orders an debit cards. Anyone know of any kind of a work around on this? I like to use my Costco Visa for as much as I can to get the cash reward at the end of the year. The Western Union charge is $2.25 and I would only earn $1.00 per $100 charged on my Visa card. So by doing Western Union I would lose money. GRRRR!! I have several other bills that are the same situation like my town taxes.

This is pretty common for government bills (taxes, publicly owned utilities), and not unusual for smaller privately owned utilities (electric/gas/water/sewer - competition seems to drive all telecoms to offer customer friendly payment options). Government and smaller companies have difficulty negotiating good fee structures for accepting credit cards; and they might not equate the merchant fee with reduced personnel costs in processing paper payments. Larger utilities get good merchant fees and have figured out that they can save money by processing payments electronically, so they are happy to accept credit cards. Pretty much you just have to accept that they are not effective for cashback bonus spending.

Using a 2% back card or hitting a sign up bonus that gives you 10-50% back makes paying the fee a lot more palatable.

Most of these have fess where even 2% doesn't make sense. But if you need the purchase for a sign up bonus, who cares about the fee.

[Roadrunner53]

kpd905, I tried to buy a Visa card thru one of my local grocery stores and they will not allow the purchase with a credit card. They will take debit card, cash or check. Maybe Costco would allow it.

I live on the east coast and we don't have Kroger out here. I can get 4% on gas purchases thru the Visa but since we no longer work, we don't use too much gas!

The Visa card rewards are:

4% gas
3% dining
2% Costco purchases
1% for other purchases

[kpd905]

Yes, Costco constantly tries to sell me on their card.  Instead, I buy Costco gift cards when Discover offers 5% back, or I use a card to hit a sign up bonus and get 10%+ back.  There is no good way for you to make a lot of money with the Costco card.

[HPstache]

Applied for the Capital One Savor Last night and got approved instantly.  I've got a couple of big items I need to buy coming up so I should be able to hit the minimum spend of $3K without a hitch

[robartsd]

Yes, Costco constantly tries to sell me on their card.  Instead, I buy Costco gift cards when Discover offers 5% back, or I use a card to hit a sign up bonus and get 10%+ back.  There is no good way for you to make a lot of money with the Costco card.

Where do you buy Costco gift cards with a Discover card for a 5% bonus?

Of course no regular cash back system compares to the sign up bonus game (I agree that CC churning is chasing sign up bonuses - you're not churning anything when you're just optimizing the use of cashback cards).

[kpd905]

Yes, Costco constantly tries to sell me on their card.  Instead, I buy Costco gift cards when Discover offers 5% back, or I use a card to hit a sign up bonus and get 10%+ back.  There is no good way for you to make a lot of money with the Costco card.

Where do you buy Costco gift cards with a Discover card for a 5% bonus?

On Costco.com, Discover offers 5% back at Warehouse Clubs one quarter a year, so we buy the maximum of $1500 per Discover card.

[robartsd]

Yes, Costco constantly tries to sell me on their card.  Instead, I buy Costco gift cards when Discover offers 5% back, or I use a card to hit a sign up bonus and get 10%+ back.  There is no good way for you to make a lot of money with the Costco card.

Where do you buy Costco gift cards with a Discover card for a 5% bonus?

On Costco.com, Discover offers 5% back at Warehouse Clubs one quarter a year, so we buy the maximum of $1500 per Discover card.

I hadn't realized that Costco.com accepts Discover. I'll have to remember that if they put warehouse stores back on the calendar. My 2019 calendar shows Grocery Stores; Gas, Uber, and Lyft; Restaurants; Amazon.com.

[Omy]

Got the Savor card last month. Make sure you know when your 3 months end since the period seems to start when approved (not when we actually received the card).

[jnw]

Got the Savor card last month. Make sure you know when your 3 months end since the period seems to start when approved (not when we actually received the card).

Also I add a 7 day buffer personally, so purchases have time to clear.   So basically 83 days from approval date is what i do.

[jojoguy]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

FYI, you can just set up Auto-pay to pay the Statement Balance and you won't have to log in to pay the card after every transaction.

Maybe he doesn't like seeing credit card debt build up in Personal Capital each day?  I can see how it can cause psychological damage :)   I pay my once per month and sometimes I am shocked how high it gets quickly.  Fortunately I just categorize everything as discretionary or not and I can quickly see if I am doing okay.

Just seems like a lot of extra effort to me.  The only problem with this method is that sometimes people will pay their card off after every transaction and then wonder why their credit score isn't going up.  It is because they have 0% utilization by having no statement balance every month.

Hmmmm...I had no idea that this was the case. Maybe I should pay it down to a certain amount before getting a statement perhaps?

[jojoguy]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

Awesome, are you going to purchase a few more hundred on the card? In case there is some misc return?  I usually go over 200-300 dollars just to be safe.

I just got my $500+ statement credit to the Chase Sapphire Preferred the other day. :)

Yep, I made sure it went over several hundred. My parents paid over $600 in bills just this past week using it, and I definitely want more point buildup as well.

[kpd905]

Just crossed the $4,000 threshold for my Chase Sapphire card, and did so in less than 2 months! Making almost $700 in travel points and no debts! Paid the balance every single day.
Three things helped:
1. We went on an already planned vacation. (Got double points on hotels, rental car, and dining.)
2. My parents paid some bills using my card and paid us back.
3. We used the card to pay for everything else we would ordinarily buy.

FYI, you can just set up Auto-pay to pay the Statement Balance and you won't have to log in to pay the card after every transaction.

Maybe he doesn't like seeing credit card debt build up in Personal Capital each day?  I can see how it can cause psychological damage :)   I pay my once per month and sometimes I am shocked how high it gets quickly.  Fortunately I just categorize everything as discretionary or not and I can quickly see if I am doing okay.

Just seems like a lot of extra effort to me.  The only problem with this method is that sometimes people will pay their card off after every transaction and then wonder why their credit score isn't going up.  It is because they have 0% utilization by having no statement balance every month.

Hmmmm...I had no idea that this was the case. Maybe I should pay it down to a certain amount before getting a statement perhaps?

If you are trying to increase your credit score, then pay it down to under 10% of the total credit limit before the statement posts.  So you'd make two payments per month total, which isn't so bad.

[malacca]

.

[HPstache]

Got my $500 Savor Bonus posted.  Just cashed out $537... now I just need to remember to cancel before the fee kicks in.

[jnw]

Got my $500 Savor Bonus posted.  Just cashed out $537... now I just need to remember to cancel before the fee kicks in.

I plan to hold onto the card.  Immediately after the annual fee kicks in next year, I'll give them a call to reverse that fee and downgrade the account to some other credit card with no APR.   This way I'll have a good Credit Age as well as Credit Card Usage %.

[HPstache]

Got my $500 Savor Bonus posted.  Just cashed out $537... now I just need to remember to cancel before the fee kicks in.

I plan to hold onto the card.  Immediately after the annual fee kicks in next year, I'll give them a call to reverse that fee and downgrade the account to some other credit card with no APR.   This way I'll have a good Credit Age as well as Credit Card Usage %.

I'm not too worried about my Credit Age or Card Usage %... I'd rather not risk not getting the fee reversed.

[kenmoremmm]

ptf