Part 2 of 4: How does Credit Card Churning Impact your Credit Score?
Part 3 of 4: Are you ready for your First Credit Card Churn?
Part 4 of 4: Credit Card Churning: 7 Easy Tips to Maximize your Churn
Bonus: 7 Reasons Why You Shouldn't be Churning Credit Cards
Welcome back to our third post regarding "credit card churning", where we will address the circumstances
surrounding a churn as well as some practical strategy.
Okay so now we can get into the finer details of how to successfully churn. There are many aspects to consider and it has taken Anneli and I quite a bit of research (and excel sheets), but we now feel very comfortable with our credit card churn strategy short term and long term.
There are a lot of cards out there, but generally you can classify cards into four rewards types.
This would be your airline and hotel cards that allow you to exchange your points directly for discounted or free flights and/or hotel nights (our Marriott Rewards Credit Card is an example of this).
2. Statement Credit
This would be a card where you pay for the travel you want, and then apply statement credit to reduce your bill (our AmEx Blue Sky is an example of this).
3. Cash Back
This would be any card that provides cash back to you, like 3% for gas, 2% for groceries, 1% on anything else (our BofA Cash Rewards is an example of this).
You spend on your credit card and you get nothing (womp womp)
While we love the points cards because we can trigger big bonuses for free flights and hotel nights, we also value the other types (well, not the fourth). Statement Credit is capable of just paying for all or some of your travel costs, but we are banking our Blue Sky points right now so that when we need to rent car during our upcoming Hawaii trip it will be free (aka free 99). The cash back cards are great to fill in the gaps. We were pleasantly surprised with how much we got back just from gas and groceries. (don’t use your debit card ever again...you are throwing money away!)
What creditor is offering the card?
Below are some examples:
Bank of America - Alaska Airlines, Cash Rewards
Citi Bank - American Airlines Aadvantage, HiltonHonors
Chase - Sapphire, British Airways, United, Southwest, Marriott, Hyatt, IHG
American Express - Delta Skymiles, Starwood, Blue Sky, Blue Cash
Barclays - US Airways, Arrival
Discover - It
Capital One - Venture
Why is this important to know?
Depending on your credit history, you may only be able to get one card at a time with each creditor. Two or more is certainly possible, but it often requires a call into the reconsideration line (more on this in a bit).
Check out www.creditboards.com and select the "Credit Pulls” tab to look up a card, the city the applicant is
from, and the bureau that pulled the credit report. Chances are, you can make an educated guess as to what Credit Bureau a particular creditor is going to pull based on this information.
Which credit bureau (Experian, Transunion, Equifax) pulls a hard credit inquiry when you apply?
This is actually tremendously critical to the credit card churning process. Anneli and I are based in Los Angeles and what we have found thus far is that almost every card that we have considered pulls from Experian as their primary source. For those that may have a 30-40 year card history, this is probably not that big of a deal. For those that are younger with a shorter history (like us), it often leads to discomfort from credit card companies about approving multiple new lines of credit at once (even though we both have excellent credit scores). Don’t fret, because there is always a second chance with...
The Reconsideration Line
Every single credit card company has a phone number you can call where they will have a “credit analyst” take a look at your application and “reconsider” the initial declination. Anneli was initially denied the Marriott card because she accidentally inputted our address incorrectly, and with a quick call and confirmation of the accurate address she was approved. My Dad was initially denied the Alaska Airlines card, and with a quick call to verify some address and spouse information, he was approved. If they say no, don’t be shy about calling again and speaking to a different analyst. We have not had to call four or five times (yet), but we have heard from others that it took a few calls to finally find the analyst that was willing to positively reconsider.
Now you know what things to think about as you begin the churning process.
What types of rewards do you prefer? Do you feel better prepared to begin your churn? Have you ever used the reconsideration line?
The Reconsideration Phone Numbers
- Chase: 888.245.0625
- AMEX: 866.314.0237
- Barclays: 866.408.4064
- Citi: 800.695.5171
- Bank of America: 877.721.9405 x3
- Capital One: 800.548.4593