Credit Card Churning May Get More Difficult.

[burmans]

Easier to churn yes - if focused solely on getting an approval. But also harder to manage the overall churn process, and with a likely loss in functionality.

If one has an Amex Platinum Edge card earning say around 60,000 points a year, another much lower point earning card for all other payments, and a card for foreign exchange free overseas purchases - it is going to be kind of difficult closing those useful cards, and reducing them to one or two new ones while making sure that bills are paid (e.g. phone bills, health insurance bills, water bills etc etc). Some of the functionality afforded by the current useful cards will be lost if one wants to maintain the churn activity.

Regards,
Renato

Yeah I get it, you are going to have to make decisions as to what cards really offer the most value. I don't disagree on this, but my view is if you do this you will not be disadvantaged. In my view the advantages offered by churning outweigh the disadvantages you mention and if for you they don't the answer is simple, don't churn so much.

To reiterate what some on here say quite often, those who understand the game and play it best get the main benefit.

 

[Renato1]

Yeah I get it, you are going to have to make decisions as to what cards really offer the most value. I don't disagree on this, but my view is if you do this you will not be disadvantaged. In my view the advantages offered by churning outweigh the disadvantages you mention and if for you they don't the answer is simple, don't churn so much.

To reiterate what some on here say quite often, those who understand the game and play it best get the main benefit.

Thanks for that I suppose that when this new reporting system is implemented we will get an idea of what the coughulative credit limits versus income criterion is that banks will find acceptable, for people making credit card applications. Perhaps then one can start applying for credit limit reductions on useful credit cards, in order to keep them and their functionality. Not that I am much of a churner.

But I just remembered the other very important issue - Complimentary Travel Insurance.

Not all cards are equal in this respect. Some cards with bonus points have no free Travel Insurance, some have relatively limited free Travel Insurance (e.g. Qantas Money only cover you for a month) and some have Travel Insurance provided by say Chubb - who won't cover my minuscule pre-existing conditions under any circumstances, whereas Allianz is happy to cover me providing I pay the extra cash, and some cards require all the air fare to be paid for with the card to activate the insurance, while others require a $500 spend or in the case of CBA zero spend.

One would have to make very sure that Complimentary Travel Insurance is accounted for extremely well in any churning process, else the trip taken with the points may wind up being ruinously expensive.
Regards.
Renato

 

[TomVexille]

Or you just buy an annual policy to cover yourself

 

[Renato1]

Or you just buy an annual policy to cover yourself

Thanks. You have prompted me to check for the first time in ages how much it costs to buy cover outright from Allianz at the Defence Health site. For our two trips this year, without putting in the pre-existing conditions, the cost would have been $1117 for our trip to Europe and $185 for the trip to Thailand. So our card saved us $1302 this year.

The Frequent Traveller option isn't available to us as our trip is longer than 45 days.

That would be a lot of churn points for someone to make up something like the $1302, but for someone making a few small overseas trips, I can see your point.
Regards,
Renato

 

[lovetravellingoz]

Easier to churn yes - if focused solely on getting an approval. But also harder to manage the overall churn process, and with a likely loss in functionality.

If one has an Amex Platinum Edge card earning say around 60,000 points a year, another much lower point earning card for all other payments, and a card for foreign exchange free overseas purchases - it is going to be kind of difficult closing those useful cards, and reducing them to one or two new ones while making sure that bills are paid (e.g. phone bills, health insurance bills, water bills etc etc). Some of the functionality afforded by the current useful cards will be lost if one wants to maintain the churn activity.

Regards,
Renato

Well I too would never close all of my cards. Moreso if retired in case the banks become more likely to say no!

If I understand correctly you are part of a couple. As such depending on your affairs it is still quite manageable to keep and also churn, but yes for retirees will be harder due the approval process.

ie
- Partner One: Amex Explorer/Edge Combo. Partner to have supps for each if desired. If you can use the included flight is effectively free.
- Partner Two: ANZ Traveller for a point earning CC for international spend without the fees. If you can use the included flight is effectively free. Also provides TI (for upto 6 months away).
-One of both partners to have a Citiplus and/or ING Debit card for ATM withdrawls overseas.

Above this each partner churns the best CC deals that they qualify for. These churns to pay for domestic spends etc to meet qualifying spend for these cards.

The above keeps your cost low as kept cards are effectively free, and any paid cards would only be taken out when there is an attractive sign-on bonus.

 

[Renato1]

Well I too would never close all of my cards. Moreso if retired in case the banks become more likely to say no!

If I understand correctly you are part of a couple. As such depending on your affairs it is still quite manageable to keep and also churn, but yes for retirees will be harder due the approval process.

ie
- Partner One: Amex Explorer/Edge Combo. Partner to have supps for each if desired. If you can use the included flight is effectively free.
- Partner Two: ANZ Traveller for a point earning CC for international spend without the fees. If you can use the included flight is effectively free. Also provides TI (for upto 6 months away).
-One of both partners to have a Citiplus and/or ING Debit card for ATM withdrawls overseas.

Above this each partner churns the best CC deals that they qualify for. These churns to pay for domestic spends etc to meet qualifying spend for these cards.

The above keeps your cost low as kept cards are effectively free, and any paid cards would only be taken out when there is an attractive sign-on bonus.

Thanks. You are right, assuming the credit limits on Amex Explorer/Edge Combo and ANZ Travel Adventure card aren't too high and both members of the couple are earning reasonably good money, your scenario would work fine (though that doesn't apply to us). Your ANZ card also gives you the good travel insurance with Allianz.

Using the exact same information I provided to Citibank and NAB, I was given a $16,000 limit on the Citibank Signature card and a $6000 limit on the NAB card, which leads me to the conclusion that some card providers are stingier than others, and that churning may thus be more difficult if other cards are held.

The ANZ Travel Adventure card actually solves a lot of issues I raised - it earns 0.75 Velocity points a dollar, has foreign exchange fee-free transactions and has good travel insurance - since it is one card instead of another point earning card and the 28 Degree Mastercard. Only problem is cost. At $225 per annum, yes it does pay for itself if one uses the free trip - but I've lost interest in travelling around Australia.
Regards,
Renato

 

[Dr Ralph]

unless one cancels nearly all cards

This is a point I have been making in another thread (Amex "I'm going to cancel my card" - bonus points given thread.) and a reason why I cancelled all of my AMEX cards. The bonus points next time around will for the new AMEX card(s) and the other new cards will outweigh any points I accumulate on this card in the next 12 - 18 months. Yet there have been a number of members vociferously telling me that I was wrong.

I disagree, it makes it easier to churn.

because a lender could see that you have applied for 10 credit cards in the last 3 years, but only have 1 current.

Maybe. But who only applies for 10 cards in 3 years????

 

[Renato1]

This is a point I have been making in another thread (Amex "I'm going to cancel my card" - bonus points given thread.) and a reason why I cancelled all of my AMEX cards. Yet there have been a number of members vociferously telling me that I was wrong.

But Dr Ralph - you are a Doctor and institutions are falling over themselves to give you cards. It's not the same for many of the rest of us - I spend a good chunk of the process explaining to people with a subcontintental accent that my income is largely tax free, and that my notional before tax income is thus higher, and equivalent to that of people that they are approving cards for.

Yes, I could close my Amex Edge card, and earn 10,000 points grocery shopping with another card instead of the 60,000 points I get now. Then after 13 months apply for an expensive Amex card with 100,000 points and a $400 card fee and $400 travel credit (who may or may not approve it, given the new reporting rules). If I use that card for a year I earn 20,000 points grocery shopping.

So over a two year period, I'd have lost 90,000 points that the Edge card would have given me, to gain 100,000 points plus a benefit of two that I may actually use with the new Amex card. I just don't think it's worth the effort for 10,000 points.
Regards,
Renato

 

[mviy]

I don’t churn as much as many here. Exclusion periods are the biggest annoyance I have with churning. I’m not eligible for sign up bonuses that I’d like to go for because of the exclusion period.

I don’t expect CCR will have a big impact on me.

 

[Lynda2475]

The biggest points earning potential for me is signon bonus not ongoing spend.

For me both are important. Wiith exclusion periods there is a limit to how often one can churn and i rarely use cash so need active cards. Whilst i dont have a business i can at least pay for then claim my work travel expenses which adds extra points.

 

[Dr Ralph]

Wiith exclusion periods there is a limit to how often one can churn

The limit is not as restrictive as you might think. There's enough cards on offer that you should be able to churn a new card at least every 2 months whilst waiting for other card's exclusion period to expire. Factor in a partner and you should be able to churn a card a month.

 

[lovetravellingoz]

This is a point I have been making in another thread (Amex "I'm going to cancel my card" - bonus points given thread.) and a reason why I cancelled all of my AMEX cards. The bonus points next time around will for the new AMEX card(s) and the other new cards will outweigh any points I accumulate on this card in the next 12 - 18 months. Yet there have been a number of members vociferously telling me that I was wrong.

If you mean advice that all are better off cancelling all cards. Then yes you are wrong and moreso for those that prefer Krisfyer over QFF.

I have provided the maths of this in a number of threads why many but not all, and not just those with large business spend, are better off not churning all cards.
What is best varies by the circumstances of the individual person. But for many a combination of churning and keeping select cards will for them provide the optimum result. It should also be noted that for individuals that benefits in determining this are not just FF points gained (though in my case I certainly earn more FF points by the combo approach, and other benefits are just cream).


For those such as Renato who are retired it also needs to be noted that the big sign-on point offers on CCs are often denied to them by the providers due to the qualifying income and what the providers deem as acceptable. This has been reported by numerous posters.

 

[burmans]

I think the suggestion you close all cards is a bit extreme, but 2 or 3 would seem enough for most needs in my view. And then churn the rest.

 

[mviy]

Bonus points do outweigh the regular earn I can get from cards too. Say I get 100,000 points from an Amex deal and earn half a point more on Amex than I can on a MasterCard/Visa. I'd have to spend $200,000 on Amex over an 18 month period to be better off keeping it indefinitely (and that's ignoring the sign up bonuses from churning). To spend $200,000 on Credit Cards would take me many, many years not 18 months.

 

[Lynda2475]

The limit is not as restrictive as you might think. There's enough cards on offer that you should be able to churn a new card at least every 2 months whilst waiting for other card's exclusion period to expire.

Happy if it works for you, but churning every 2 months isnt very practical for me for a number of reasons:

1. I use cards to book travel - accommodation, short haul LCC flights and you often need to present card to check-in/board; or if relying on CC travel insurance then the card needs to stay open until trip completes. I often book big trip trips 10-11 months out, because of how difficult it is to secure time off from my job.

2. Quite a few recurring expenses and subscriptions, changing CC details every month is a real pain (and maximises chances something wont get paid n time), i just dont have the time to manage all that.

3. If I've paid an annual fee, I want to get max value out of the card so not just the sign-on, I feel its better to keep 11 months and get the ongoing best points earn.

Its easier if you want to do multiple programs, but my primary focus is Qantas as that's who we have to fly with for work (short haul economy) and means i have best change of earning SC. Heaps of points without status means you have less chance of being able to use the points.

I already have Westpac, ANZ and Amex cards - there is really only 4 other semi decent Qantas options NAB (my next visa, but as a fee not til March 19), Citi, Qantas and BankSA/StGeorge/Bank of Melbourne (as SGB group are treated as one) left, and of those only NAB had good ongoing points earn. The CBA cards have insulting earn rate.

If i were to apply for 4 more cards this year, then I'm locked out for 12-18 months (so zero good options next year, and left with not the best earning cards, as the ones I have all earn more points on regular spend than the alternatives) and would have outlaid 4 annual fees for bonus points i wont be able to use this year anyway, so rather save the cash and churn at a slower rate.

I dont think there is a a one size best approach for all scenario. I will have enough points for a J RTW oneworld redemption by July; and dont have the leave to take such a trip until 2019 (as already have 6 weeks personal travel fully paid ffor this year) so i can afford to churn slower.

 

[burmans]

Wiith exclusion periods there is a limit to how often one can churn and i rarely use cash so need active cards.

Would have thought churning every two months you will always have an active card!

 

[sjk]

The bonus points next time around will for the new AMEX card(s) and the other new cards will outweigh any points I accumulate on this card in the next 12 - 18 months. Yet there have been a number of members vociferously telling me that I was wrong.

Not to vociferously tell you that you're wrong, but it is interesting that you were a little keener on the benefits of holding an AMEX card when there was potentially something in it for you via a referral:

You want this card! You need this card! Fee neutral with the $400 travel credit and a great earning rate (especially with the limitations placed recently on bank issued AMEX cards).

(...)

Sign up as soon as possible to ensure you have all 4 supplmentary cards in place (yes you can have up to 4 supplementary cards with this AMEX Explorer account) for forthcoming AMEX cash back offers, including the scheduled Smallshop promotion.

 

[Dr Ralph]

Not to vociferously tell you that you're wrong, but it is interesting that you were a little keener on the benefits of holding an AMEX card when there was potentially something in it for you via a referral:

Not sure that you understand the point of referral offerings. But I am sure that the comment I made at that point (which must be more than a year ago) has no relevance to churning any card including the AMEX Explorer, which was the point of this thread. But if you want to continue to trawl through previous postings (including oddly in different threads which have no connection with this thread) to try to find some kind of evidence (taken completely out of context) by which to 'pin me to the mast' then go ahead. I would have thought that contrary to AFF's ideals, but go ahead with the express knowledge that that type of conduct colours your membership of AFF.

Of course there are benefits in holding an AMEX card. I've never indicated otherwise. I would be happy to hold an AMEX card now and encourage other members to consider an AMEX card. What I have consistently stated is that you should churn cards to maximise your collection of points. If you think otherwise that's fine. But why the need to continually attack me for holding this view is bizarre.

I continue to encourage all members to consider using another members referral link.

At no stage did I ever indicate that you should consider the AMEX Explorer card as a card that should never be churned.

 

[lovetravellingoz]

Happy if it works for you, but churning every 2 months isnt very practical for me for a number of reasons:

.

TIP1: In this case just keep one non-churner

TIP2: For many, a mix of churner cards with some "keepers" can work best to take into account point earn, convenience, other benefits etc. For many this approach also maximises their point earn.

 

[NoName]

Which banks are participating in this lost 1 July? The big 4 are the only ones obligated to it right? Or is my understanding wrong there.