Hi guys
For those that churn credit cards for points/cashback/giftcards, etc…
Once you receive your rewards, do you then close the account right away before opening the next card, or do you try to open the next card first and if approved then close the existing account? Just trying to maximise my chance of getting approved.
Thanks!
Approved ones could increase credit scores, as somehow it shows your ability to service.
Rejected applications are bad on the credit reports, cuz new lender assumed something wrong with that person
Approved ones could increase credit scores
Doubtful. Got a link?
Happened to my last quarterly update Equifax score after I refinanced. Wanna catch up with a mask on and I show you on my phone?
@avoidfullprice: That is speculation. I don't think your score went up because of that and would have gone up anyway.
@avoidfullprice: Notice how all these sites don't recommend signing up to any new credit card to improve a credit score?
https://www.equifax.com.au/personal/help-centre/credit-score…
https://www.canstar.com.au/credit-score/how-to-improve-your-…
@watwatwat: True. But as you said I was speculating so wasn't giving advice. You can keep that good feelings to yourself.
As for OP, it is noted below OP is not overly concerned about credit score/report. Pity our discussion didn't add value.
If OP does care, then based on the links you shared, OP is better off keeping one credit account open for long time, so the average age can be kept a bit higher if OP keeps on closing the accounts.
But hey , disclaimer: not advice, and maybe incorrect. Done
@watwatwat: Setting up new cards don't improve credit scores, history of meeting credit commitments do.
Yes it is actually, depending on the rewards. I don’t really apply for Homeloans so I guess credit report isn’t as important to me as it might be for others
Yes. I've churned 3 this year so far (all QFF rewards).
My credit rating has improved (+35 on Credit Savvy personal score)
Depends your score is. I find my score goes down in the 3 months after a credit check. Then comes back up.
Depends on your salary really, and whether a bank will let you have large credit (ie 2 cards).
I overlap mine by 1-2 months so can cut over the direct debits, the second a card is 24 months (maybe 12) since been used it is back in the queue for usage again.
I think it is worth it if the deal is good like the ANZ rewards card recently.
I used to average 3 cards every two years but the Coles MasterCard is good at collecting flybuys so I kept it for the full year.
I got the no fees one but closed it to apply for the rewards one with the $200 bonus and then got rejected on that one :(
depends on your income, your current total credit limit and the min limit of the prospective card. Majority of cards worthy of churning these days have a min credit limit of 6K to 15K. That puts a decent dent in your serviceability (income vs total credit limit). If your income have room for another dent, then there's no need to cancel cards you already have.
I can service no problems. Just frustrated when banks can’t see that LOL. Funny I’ve never been rejected when applying direct with Citibank but recently got rejected on the coles rewards CC and I was only asking for $2k limit.
Since the financial royal commission around early 2019, the way servicing is calculated has changed. Roughly previously servicing was based on how much you could pay off as a minimum per month. Post commission, servicing is if you could pay of your entire limit card per month.
If you have a 15k limit card, realistically you aren't going to max out your 15k limit every month but the bank still treats it as so.
Used to be able to overlap 2 x 15k limit cards but now I have to close and reopen a couple of months later.
That’s not true. Banks use 3.8% of the limit for monthly servicing. If your limit is 10k, they assume payments of $380 a month. If they used the full amount nobody would ever be approved for a credit card!
Citibank is probably the worst out there for rejections with no explanation. Ruined my credit score this way
Most other banks are fine.
Don't worry you're not alone.
I close CC immediately once the rewards have landed.
Then wait a few weeks/months until I choose to grab another cc. I don't like having too many cards open at once.
If the next one you want was already available would you still wait a few weeks/months? Sometimes there’s expiry date on those rewards.
Not always a good idea to close immediately, but depends on your income/personal circumstances.
If you take out a high end card (e.g. Black, Platinum) they often come with additional insurances like travel, medical repatriation, purchase protection and more important, additional warranty insurance.
So for example, if you bought a washing machine with 2 year warranty, your card might give you another 12 months on top.
I'm not saying hang on to your cards until the warranty has expired (you may incur annual fees), but check what you buy and check the card insurance before you cut it up.
Yeah it depends on the item i think. I have the permanent Citibank one if I want to extend warranty, some are not worth it because excess is $100
How i approach it is this way.
Repeat.
I generally find anymore than 2 cards and i start getting rejection notices so best to keep it to 2 cards open at any one time
Also ask for the lowest credit limit as this will maximise the chance of approval.
If you go for an AMEX be wary that this is only accepted in certain places and may be harder to reach the spending limit.
Yeah I thought about doing that but got rejected recently so was a bit cautious, although tbh at the time of rejection I think I had 4 cards on my end, totalling about $30k, sometimes I do forget to ask for the lowest limit :(
What are the good cards you have churned with? So far the Citibank rewards with the $500 GC is the only one I’ve used.
An AMex one through points hack 75k qff, , Citibank $500 e-gift card, bank of bandigo $100 woolies, coles $100 worth of fly buys are the ones I’ve churned recently. So bummer I missed out on the $200 coles flybuys
I keep them open until the annual fee is due. Often they see that you're not using the card and will send out offers which can be quite lucrative. If the offers are covering the annual fee then keep it open.
What kind of lucrative offers? I’d be worried about not being approved and would miss out on the good CC offers if i keep all the cards for the whole year
Spend X amount and get bonus points or gift card. They're hoping you only pay the minimum then 20% interest on the balance. Citi bank has been good lately.
Also keen to better understand this. Can’t say I’ve ever had offers in years of churning
They are targetted offers that Citi emails directly…. spend X amount or take out a fixed payment option to get a $200 giftcard. The FPO seems to be a standard offer but the 'spend x amount' has increase over time (for me at least). The first offer was spend $2500 on retail purchases over 3 months, the most recent was spend $4500 over 3 months.
They are good offers provided that you make sure to pay off in full and not incur interest.
I apply for a new credit card every couple of years to cash in on the points offers. I don't like ripping banks off (no idea why as they happily rip us off!) by taking the points and run within a year… Also I think too many applications may affect credit limit, but certainly one a year I believe helps build your credit rating as long as you don't get refused, in which case you lose points.
MY BIGGEST PROBLEM is that the Westpac mortgage I have includes a free premium credit card, but they won't give it to me because I don't earn enough money??? I get my credit cards from ANZ, HSBC, AMEX,…. and have to pay hefty fees for their platinum products each year. I like domestic/international travel and purchase benefits. But I strongly dislike WESTPAC refusing to give me a card!
MY BIGGEST PROBLEM is that the Westpac mortgage I have includes a free premium credit card, but they won't give it to me because I don't earn enough money??? I get my credit cards from ANZ, HSBC, AMEX
Keep one of these and trying applying for Westpac after 3 months.
Oh don't have any morals about ripping banks off, all promotions have a built in churn rate that they expect to still make money.
How do people keep track of the various cards/bonus points/waiting periods between cards?
I'm trying to be aware of all the different card bonuses etc but it gets confusing. I only churn Amex and am venturing out into ANZ Rewards/Flyer cards.
I'm trying to build up my flyer points whilst I can.
For my current new card I'm churning, I'm waiting for the bonus points to hit and will just wait for the last statement to be issued to get whatever points I've earned up until that point before closing.
For my Amex cards I tend to keep them for the full year as I like the rewards/offers. Worked out well for my Velocity Platinum card I was lazy to close - got $100 off a $400 spend!
I space out my applications, normally leave a few months between applications. I do have some cards I will keep and not churn as I like their benefits, so that's also a factor for when I'm applying for new cards.
Is it even worth churning cards these days given all the credit reporting performed?
Every application puts a dent on your file?