- Day 1 – What’s Travel Hacking all about?
- Day 2 – Getting Organized
- Day 3 – Types of Miles and Points
Now that you are familiar with all of the different types of miles and points, it’s time to put together a strategy for applying for new credit cards. My favorite strategy is to focus on acquiring large balances of the most flexible and valuable points (Ultimate Rewards, Membership Rewards, Marriott Points, Thank You Points, and Capital One Miles).
One of my mistakes when first starting out was blindly signing up for all sorts of different credit cards in many different programs and not having a plan in place. At the end of the day, I had a small amount of Hawaiian airline points, a few American Airline points, some Hilton points, etc. I couldn’t really do much of anything with the small amounts of points scattered across numerous programs.
Changing Rules
The big three (Chase, American Express, & Citi) and other banks have also gotten more strict in the past few years to limit us (Travel Hackers) from earning large amounts of points quickly. It seems like every few months a new bank has a new policy that we have to follow which makes understanding the rules more important. Here are the current rules with each:
Chase
Applying
The 5/24 Rule:
Chase does not have a formal policy that limits the number or timing of credit card applications. There are a few reports of people received multiple personal credit cards in a single month and even less reports of people being approved for two Chase credit cards on the same day. But generally you can apply for one personal and one business card within a 3 month period.
In late 2015, Chase implemented a ‘5/24’ rule. For their best premium credit cards and then expanded it to ALL of their credit cards in November 2018. Chase won’t approve you for the credit card no matter what your credit score is if you have opened 5 or more credit cards in the past 24 months. I wouldn’t even waste your time applying if you are over the limit.
One thing to note is while typically BUSINESS credit cards don’t show up on your personal credit score, business credit cards from Capital One, Discover, & TD Bank will show up on your personal credit report and hence count towards your 5/24 status.
Not sure how many credit cards that you have opened in the past 24 months – here’s an easy way to check your 5/24 status. Beginners will definitely want to apply for and obtain Chase cards first – but don’t run off any apply for any cards just yet!
The Sapphire Card Rule:
In late August 2017, Chase starting limiting individuals to only receive one ‘Sapphire’ card. Currently there are three ‘Sapphire’ cards – the plain no annual fee Sapphire card, the Sapphire Preferred, and the Sapphire Reserve. Also, you simply can’t close one Sapphire card and open another unless you wait 48 months from earning a cardmember bonus.
Doctor of Credit has a copy of the memo Chase distributed to its employees about this new rule.
Quantity of Cards
Chase doesn’t seem to limit you to quantity of cards you can hold with them. I currently have four personal cards and three business cards. But Chase will restrict you on how much credit they extend to you. Let’s say you have three Chase credit cards with $20,000 credit limits and Chase is only willing to extend you $60,000 in credit – if you apply for a fourth Chase card, you most likely will not be approved instantly. You may have to reduce credit down on one of your existing cards before they will approve you for the fourth card.
Sign-Up Bonus
Chase typically allows you to earn a signup bonus more than once – usually you can earn the bonus a second time ‘if you have not received the bonus within the past 24 months or 48 months’. This will all be spelled out in the fine print of the credit card terms – I will show you how to evaluate the offer in the next lesson.
American Express
Applying
American Express does not have a formal policy on applying for their cards. The general consensus is that you can apply for two cards in one day but one will usually go ‘application pending’ for fraud prevention. I would recommend waiting at least a week if you would like to apply for multiple American Express cards.
Generally American Express will allow two new cards in a 3 month period. There have been reports of some people being approved for three new cards in a 3 month period but usually one of the cards is a charge card which American Express seems to treat a little different since you must pay the balance in full each month.
Quantity of Cards
American Express typically limits individuals to five credit cards and four charge cards (although there are reports of people holding more)
A credit card is most common – it has a spending limit. With a credit card you are able to only make a minimum payment leaving a balance that you pay off over time.
On the other hand, a charge card doesn’t have a pre-set spending limit but you have to pay off the balance each month – you can’t only pay the minimum and carry a balance over to the next month.
Welcome Offer/Bonus
American Express credit cards are usually pretty easy to get approved for but they limit you to a welcome offer/bonus bonus ‘once per lifetime’. So you definitely want to wait for the highest ever welcome offer/bonus for each credit card before applying since you can only get it once.
The ‘once per lifetime’ is per product. So if you apply for the American Express Platinum credit card that has a 100,000 welcome offer/bonus, you can still get the American Express Business Platinum credit card with its own welcome offer/bonus. They are considered different products.
In 2018, American Express made it a little bit easier to determine if you are eligible for a welcome offer/bonus by having a pop-up box tell you after you submit your application but before it gets processed. It looks like this:
Citibank
Applying
Citi has rules for applying for new credit cards. First you can only apply for one personal credit card every eight days and no more than two in a 65 day period. Second, you can only apply for one business credit card every 95 days.
Quantity of Cards
Citi does not have a limit on the number of credit cards you can obtain, but uses the same approach as Chase. Citi will limit the amount of overall credit they will extend to you – so they don’t care if you have ten credit cards with $5000 credit limits each or two credit cards with $25,000 credit limits each.
Bonuses
In April 2016, Citi began restricting their credit card sign-up bonuses. They added language to credit card applications stating you can only earn the sign-up bonus if you haven’t opened or closed that specific credit card in the past 24 months.
Then in August of 2016, Citi added additional language with another restriction to bonuses – ‘one sign-up bonus per ‘type’ of card every 24 months’.
sample offer – current offer may be different
You used to be able to get multiple Thank You points in just a few months. Not any more, in the screenshot above if I was to apply for the Citi Prestige card – I could only receive the 40,000 bonus points if I have not had it, ThankYou Preferred, or ThankYou Premier card in the past 2 years.
This is almost as restrictive as American Express – with AmericanExpress you are only getting the bonus once, but you are able to get multiple Membership Reward earning cards within a few months.
With Citi, if you were to get the sign-up bonus for the Citi Prestige now and use the card for 6 months then close it. You would have to wait 2 years to apply for the Citi ThankYou Preferred, use it for 6 months and close it. Then wait another 2 years to apply for the ThankYou Premier. Use it for 6 months and close it. Wait 2 years, then you could start the cycle by applying for the Citi Prestige again 7.5 years later (if it still exists).
With this information, I would again, like with American Express, recommend waiting for the highest ever signup bonus on Citi credit cards before applying. It is also very important to keep a record/spreadsheet of when you applied for and closed each type of Citi credit card.
Bank of America
Applying
In 2017, Bank of America began implementing what is referred to as the ‘2/3/4 rule‘. Bank of America will only approve you for at most 2 cards per rolling 2 months, 3 cards per rolling 12 months, and 4 cards per rolling 24 months.
Then in early 2019, Bank of America started to add additional language to their credit card applications which generally further limit you to getting the credit card if you have had in the the past 24 months. For example their Alaska Airlines Visa credit card application includes the following language:
Some preselected offers and the Alaska Airlines Business Visa don’t appear to contain this 24 month language – so it is very important that you check the terms before you apply.
Quantity of Cards
Bank of American does not limit the amount of credit cards you can have with them. There are reports of some people having more than 10 Bank of America credit cards.
Bonuses
Bank of America also does not restrict the amount of bonuses you can receive as long as you follow their rules for applying.
The Others
While Chase, AmericanExpress, and Citi are considered the ‘Big 3’ credit card issuers that have a family of cards that offer flexible points, there are many other banks that have some great credit cards. Most notably, I have had cards by the following issuers:
- US Bank
- Barclays
- TD Bank
- Wells Fargo
- BBVA Compass
Your Strategy
Before you apply for any credit cards, please be sure to go through the next few lessons first as your strategy will change if you have a business or fly Southwest a lot.
My recommendation for beginner’s is keep it simple when starting out. Just apply for a single credit card to start with and have your spouse/partner also apply for a single credit card if you are comfortable meeting the minimum spending requirements to receive the sign-up bonus. Due to the Chase 5/24 rule, start with those cards first unless there is currently a huge (100,000+) signup bonus on an American Express or Citi card available.
Here are The First Five Credit Cards You Should Apply For if you don’t own a business.
Put all of your spending on this card for the next few months while continuing to research the highest ever signup bonuses for each credit card. Typically the requirements for sign-up bonuses is to complete a certain amount of spending in 3 months – plan to apply for another credit card every 3 months for a total of 4 cards per year.
Don’t forget your spouse/partner is also doing this, so together you both will have received 8 credit card sign-up bonuses in a year. Which frankly may sound like a lot, but it’s not.
So what are these 8 credit card sign up bonuses worth?
As of May 2017, the following offers are available:
- Chase Ink Preferred (80K after $5K in 3 months) = 85,000 Chase Ultimate Reward Points
- Chase Sapphire Preferred (55K after $4K in 3 months) = 58,000 Chase Ultimate Reward Points
- Amex Business Gold Rewards (50K after $5K in 3 months) = 55,000 Amex Membership Reward Points
- Chase Hyatt (2 free nights + 5K after $2K in 3 months) = 2 free nights at any Hyatt + 7,000 Hyatt points
If we assume you (and your spouse/partner) signup for these 4 cards each (8 total) this year, together you will have earned:
- 286,000 Chase Ultimate Reward Points
- 110,000 Amex Membership Reward Points
- Four nights at any Hyatt in the world
- 14,000 Hyatt points
It’s safe to assume you can get two cents of value from each point. That’s over $8200 worth of travel + 4 nights in any Hyatt in the world which can be worth $2000 or more. And we didn’t even include any other 100,000 mega bonus points offers that periodically pop up.
Let me show you a few examples on what points can buy:
- 44,000 Chase UR points transferred to Air France – roundtrip economy flight to Paris
- 115,000 Chase UR points transferred to United – roundtrip business class flight to Europe in a lie-flat seat
- 25,000 Chase UR points transferred to Hyatt – a night in a villa in the Maldives
- 20,000 Hyatt points – a night at Hyatt Place in Dewey Beach, DE which typically goes for over $400/night in the summer
- 20,000 Hyatt/Chase UR points – a night at Andaz Peninsula Papagayo Resort
Sound amazing? And yes it really is that easy.
Need to Knows
If you are finding this FREE course useful and want to support the site – please use my affiliate link to apply for your first/next credit card through CardRatings.com.
Need to Knows
- As a beginner to travel hacking, a credit card opening strategy is critical to maximizing results due to credit card companies trying to limit travel hackers
- Chase’s premium cards subject to the 5/24 should be first on your list to obtain – here are the first five cards you should apply for if you don’t own a business.
- Since American Express limits sign-up bonuses to ‘once per lifetime’ – it is best to wait for a high offer
- Start slow – one new credit card per quarter
- Help support this FREE course by applying for your next credit card using this CardRatings.com link
