It is imperative that you have read the previous parts of this series, before you start reading this post. Here are the quick links for your reference-
I will cover the most important bases and make the post as informative as possible.
We are going to discuss about non-secured cards today, not the secured ones which you can get to re-build your credit worthiness. There are five types of credit cards-
Below are the points to be considered when applying for a credit card.
Are you eligible to apply in the first place? Over the first few years, thanks to us travel hackers and credit card churners, banks and issuers have tightened the application rules. So in many cases you won't be even eligible for that credit card, no matter how great your credit score is. So first order of business is know the rules before you start playing. I am listing the most impactful credit-card application rules I am aware about as of 2/24/2018. These are changing constantly. All the rules in this section are un-official but has been established to be correct and in effect.
So as you can see, we have a 5/24, a 2/3/4 and a 8/65/90. It can't get any worse than this. Or so you would think.It gets much worse if we start talking about the small issuers and their rules. Our job is to keep ourself updated and follow the rules to get the maximum benefit. It's a time consuming process. I don't want to get into too much detail in a single post. I will try to cover the most important bases and make the post as informative as possible.
Sign-Up Bonus Eligibility
Signup bonus is the biggest reason to apply for a credit card, in most situations. So it is of paramount importance you know that you are eligible to receive the bonus once the required spend is met. Otherwise, you are wasting a hard-pull, wasting the spend that you could have put somewhere else, wasting the time and a huge disappointment to top it all. All the rules in this section are official and part of the respective issuer's application pages.
Chase Approval Rule:- You can have the sign-up bonus more than once. But you have wait 24 months since you got the bonus last time and can NOT hold the same card while applying again.
This product is available to you if you do not have this card and have not received a new cardmember bonus for this card in the past 24 months.
American Express Approval Rule:- You can get bonus for a particular card ONCE per LIFETIME. So it is of utmost importance to apply for a card when the signup bonus is highest or near all-time high.
Welcome bonus offer not available to applicants who have or have had this product.
Citi Approval Rule:- Like the eligibility, Citi's approval rules are also most complex. You can get the sign up again on a particular card even while holding the same card, but you can't get the bonus if you have opened or closed any card of the same family in the past 24 months. I know, incredibly confusing. Citi has mainly three types of family in cards other than the cashback ones.
American Airlines AAdvantage® bonus miles are not available if you have had any Citi® / AAdvantage® card (other than a CitiBusiness® / AAdvantage® card) opened or closed in the past 24 months.
Now that you have verified that you are eligible to apply and eligible to get the bonus, you have to find out he benefits. As I stated earlier, for the first year- the signup bonus ALMOST ALWAYS is worth it- irrespective of any other benefits. But the benefits add oversized value to any credit card and would help you do decide one between two enticing offers.
This is another important factor. Many cards have no annual fee with great benefits, many has $0 promotional first year annual fee that increases to $100 -$150 from second year. And a lot depends upon your ability to extract value.
Currently I personally hold various credit cards that combine into around $2500 of annual fee. But this is not a cut&paste solution. You have to evaluate your situation with the goals in mind.
Notable Travel Hacking techniques enhanced by credit cards.
American Express Offers:- For every approved amex credit card, you are automatically enrolled into this. You have to enroll into each offer before using one and if you meet the spend criteria, you get the statement credit. This is really enticing as each amex card has its own digits unlike visa/mastercard/discover and thus eligible for it's own offer as long as it's a different online login. And because you can add up-to 99 authorized users for a single approved card. So once you get approved, you can add your wife, your adult children, your aunt, your in-laws (not sure about this), your parents, and your besties as authorized users. Just keep in mind they are able to pay for their purchases and you are responsible for paying off all their purchases. But this is something that can really by scaled.
Priority Pass Select Lounge Access:- Most of the premium travel credit cards offer unlimited visits to the lounges and select few basic travel cards offer limited number of visits. Just make sure that the visits (limited or unlimited) themselves are free. There are a lot of cards just offer the access to those lounges with $27 fee for each visit. Not nearly as useful. But if you have free access, then it can save you a ton in food costs if you are traveling with a big family and/or provide a great respite from the airport madness. For my travel across Europe, I used this extensively and for a family of 3, it saved me breakfast, lunch and dinner costs on the days of travel. And they are adding actual restaurants and wine bars to their lounge collection. Few examples-
Obtaining Elite Status through Credit Card and then Match the Status with other programs:- Having a elite status with airline or hotel goes a long way in getting valuable benefits like-
Here is an example of how it can be really stacked. I did this earlier this year, and as far as I know it is still very much doable today.
Southwest Companion Pass:- Southwest companion pass is arguably one of the best travel perks out there and almost too good to be true. This pass gives you the ability to have one companion fly FREE with you (anywhere you go) in the year you become eligible for the pass AND the next full calendar year. Sky is the limit on how much value you extract out of it, depends on how much you are willing to travel in southwest.
As you can see, one of the ways to obtain the pass is to earn 110,000 base points. It is a lot of points to earn with butt-in-seat flying. Not a lot as far as credit card sign-up bonuses go. Chase has two personal and one business southwest-co-branded credit cards. It often offers 50,000 signup bonus on each of these cards. So, if you can get approved for two out of the three cards at the same time, you have 104,000 points (100,000 bonus and 4,000 from spend). Rest 6000 points can be attained very easily. The earlier in the year you do it, the better off you are- as you might be getting close to 2 years of companion pass.
Triple Dipping Annual Travel Credit:- All the premium credit cards offer annual travel credits between $200 to $300. Here the interesting part is 'Annual'. Some card issuers define 'Annual' as "Calendar Year", some as "Card-member Year". If it is calendar year, as the name suggests, the credit resets at the end of the year. So to give you an example, you applied for a card at March,2018. You get the $200 travel credit which can immediately be used. You are also charged the high annual fee at April, 2018. You would be eligible to receive the next travel credit on January,2019 again whereas the next annual fee doesn't become due until April,2019. So you have ample time to cancel the card if you wish before April,2019.
Let's take it a step further. If you can apply and get approved for a card for which the first billing cycle falls in the month of December of any year- you would be golden. This is because most issuers has at least one month grace period to cancel the card since the annual fee was billed and get a full refund.
For the "CardMember Year"- it doesn't work as you become eligible only on the card member anniversary. So double dipping might still work but not triple-dipping.
These details, I hope, would get you started on your path of credit card nirvana. Please share and leave a comment on what you liked and what you didn't. I will have a very fast follow-up post with the best credit card offers in the market and would keep the list updated based on the better signup bonus offers. And then I will write the 4th and final part of the 'getting started' series.