Point Hacking - QFF or General as Well? Do You Do Both Points Type of Credit Card Churning?

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  [Deactivated] on 20/05/2021 - 13:49

  My mate signed up to 5 credit cards to farm points. After he canceled them without using them much his credit score is now 600. In hindsight he says it wasn't worth it.

  • 

    [Deactivated] on 20/05/2021 - 14:10

    +3

    Don't know why this is being downvoted this is well documented:
    One of the biggest potential issues with credit card churning is the way it can affect your credit score. This is because each time you apply for a new card, meet the bonus point spend requirements, then cancel the account, you're adding details to your credit history that could hurt your credit score. This includes:

    Multiple inquiries from lenders. Whenever you apply for a new credit card (or other loan), an inquiry is listed on your credit file. A lot of inquiries in a short amount of time can have a negative impact on your credit score because it suggests you're shopping around for products. In the worst-case scenario for lenders, it could show someone is desperate for credit. What's more is that each inquiry can stay on your credit file for up to five years, so any potential lenders will be able to see how frequently you're applying for new credit cards or loan products.

    Decreasing the length of your average credit account history. When you open an account, your credit file will show it as active and record details of activity (such as repayments and defaults). It also shows when an account is closed. While accounts that have been open for a long time that have good repayment history are usually seen favourably, those that are closed soon after opening can have the opposite effect. This is because it can suggest instability and a lack of financial commitment.

    Eliminating cards with good repayment history. With comprehensive credit reporting (CCR), details of your repayments may be included on your credit file. If you regularly pay off your account on time – which is the goal with credit card churning – this is seen as positive information that could improve your credit score. But cancelling those cards once you have the bonus points means that this information is no longer relevant, so it could actually hurt your credit score in some cases.

    Changing credit limits. Every time you open a new credit card account, your credit limit is added to your credit file. Lenders may consider the total amount of credit you have access to when they are looking at new applications. If your access to credit has been going up and down while you open and close accounts, it suggests instability that could hurt your credit score and/or your chances of getting approved for new credit products in the future.

  • 

    blueyez on 20/05/2021 - 14:24

    +3

    If they signed up for all of them close together - it makes sense. Score also goes down when closing accounts. The longer you have a card open the less it affects your credit score. Sounds like they haven't managed churning correctly.

  • 

    djkelly69 on 20/05/2021 - 14:42

    +2

    his credit score is now 600. In hindsight he says it wasn't worth it.

    It is just an arbitrary/indicative score. I would be surprised if having the lower score has actually led to any quantifiable damage.

    In my experience, finance providers look at your actual credit enquiries and make their own assessment rather than relying on the score given by some third party.

    • 

      [Deactivated] on 20/05/2021 - 14:49

      It was 850 before, he said it made it harder for him to get a good rate for a first home loan.

      • 

        Drakesy on 20/05/2021 - 15:05

        +1

        I think the days of credit scores stopping you from getting a home loan are numbered.
        Nowadays if anything credit cards show that you can pay back credit, plus your home loan would be based on your income and deposit down, so i'd say it's a different area altogether.

        You only get unstuck if you fail to payback in the timeframe and hold debt on it. That's where your credit score will really take a beating. But if you're a true churner this wouldn't apply to you.

  • 

    demiurge on 20/05/2021 - 22:37

    Get your home loan first. Then who cares about credit score?

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  blueyez on 20/05/2021 - 14:34

  +1

  I accidentally churned Velocity points (funnelled all my credit card/banking rewards points into it) but am now focusing on QFF. As there's not much travel happening I don't find any value transferring to other airlines.

  Offers are ever changing. I try to go for the best value sign ups, which does mean sometimes paying an annual fee.

  Most providers also have an exclusion period - ie. if you had one of their cards in the last 12/18 months you won't qualify for another bonus offer until that time has passed. Amex is 18 months between cards, most banks are 12.

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  theoracle30 on 20/05/2021 - 14:46

  +1

  I do both, but I also generally limit myself to two a year. And I also try to keep them for the full year (after all, the annual fee has been paid)…

  5 a year is a bit excessive. Everything in moderation and you can enjoy the best of both worlds.

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  donbot on 20/05/2021 - 14:57

  +3

  Once home loan refinance + new home settles in a bit over a month.. I'll be back on the churn and burn at a rate of knots.

  Qantas, Krisflyer, Amex, NAB Rewards, ANZ Rewards, CBA - they all provide value, even if its by way of gift cards over the past 12months of not flying.

  Eg. Spend $100-200 on an annual fee to clean up $500-600 of gift cards.. who doesnt like $300-500 for nothing? Hardly difficult to do. Do it a number of times, and its as good as a tax-free bonus each year!

  Not convinced about the scare-mongering about the credit scores/etc if you've got a very established credit file (eg. existing mortgage). With that said, I started churning after our first home loan was already in place, so easy for me to say - even if we've just gone through the approval process to refinance an IP and new home loan (was a bit sheepish in saying we had 50+ credit cards in last 5 years, but broker was like 'just be on the front foot about it, and they wont care'. Exactly what happened - they just want some more closure letters.

  I wouldnt want to be churning and then applying for first home loan - dont give them any reason to reject you!

  • 

    ontoastrye on 20/05/2021 - 21:23

    Yup screen shot / PDF those closure letter and keep moving…
    Didn’t use to bother so much with 60-70k points unless free annual as the higher tier generally comes out.
    Don’t bother with Qantas card with 20k/mth as well… but of pain in the bum

    Curious if your non QFF - any particular approach to convert to specific airlines to focus on?

    300-400 value even in gift cards equate to THAT + your tax bracket… so yes, always some value…

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  ozbargainsam on 20/05/2021 - 15:27

  +3

  I actually ran out of card offers. I have 5 on cooldown. Credit score's never been below 800 in the several years I've been doing this.

  What do I use my Qantas points for? Redeeming $7-10k return J/Business flights for about 180k points. The points which only cost me about $600 to earn.

  I've redeemed $15k+ F return flights and upgrades, too, for not many more points and far more value.

  Almost no effort in it. Massive upside.

  I'll always tell people that redeeming for non-flight upgrades is a massive waste (and it is) but securing a points seat can be difficult and you need to plan well in advance.

  • 

    ontoastrye on 20/05/2021 - 21:02

    Are you doing both or Qantas exclusively?
    I churn every 2-3mth along with my other half - it’s the lack of providers that makes me sad I need to pay fees to keep churning…

    That’s why was curious on serial churnings who work several point system for flexibility.

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  demiurge on 20/05/2021 - 22:43

  Anything 0 annual fee you should probably churn.