Credit Card Churning May Get More Difficult.

[Lawrage]

I think its one of those things that depends a lot on where you are traveling as well.

Flying from Perth to any east coast destination on points is well worth it for us, the taxes and points are both very low and I don't really need business class on such a short flight. Factor in the cost of normal domestic flights and this one a no-brainer for us.

Perth - Europe / UK which we tend to do quite a bit. using points for economy on QF or EK to me just doesn't add up with the fees they charge. We find it better value paying the fees and more points to do the long haul in a higher cabin class.

But as JohnK mentioned, everyone puts a different personal value on these things.

 

[EestiTiger]

Given what you say about the pain of cancelling not really sure why you prefer that route, letters are painless and take way less time.

Agree with what both you and Dr Ralph say but for myself I find it easier and have a better feeling it has been done. I don't have a home office (ie printer, stationery, stamps) so it is just more stuff I don't want in my life! It is usually pretty quick after a phone call that the access to internet banking is terminated and I like to think this is a reasonable sign my request has been actioned, at least to some level. I just don't like the thought of a letter left to make its way to the relevant department via Australia Post. I guess seeing what I do working in IT for banks affects my decision too.

 

[Renato1]

Something has been bugging me in regards to our interesting discussion here.

Scenario - my wife and I are somewhere in the world on vacation where we really don't know how the health system works. One of us either has an accident or an illness. Regardless of travel insurance, someone demands a big payment for treatment or for the best treatment . With big credit limits on credit cards, the payment can be made. With little credit limits, one of us may wind up dead.

That's why I have a certain amount of comfort carrying cards with big credit limits - knowing that I can probably pay for the unanticipated.

Am I worrying too much about something impossible, or is there some small likelihood that it can happen?
Regards,
Renato

 

[Dr Ralph]

Something has been bugging me in regards to our interesting discussion here.

Scenario - my wife and I are somewhere in the world on vacation where we really don't know how the health system works. One of us either has an accident or an illness. Regardless of travel insurance, someone demands a big payment for treatment or for the best treatment . With big credit limits on credit cards, the payment can be made. With little credit limits, one of us may wind up dead.

That's why I have a certain amount of comfort carrying cards with big credit limits - knowing that I can probably pay for the unanticipated.

Am I worrying too much about something impossible, or is there some small likelihood that it can happen?
Regards,
Renato

I'd say your scenario is unlikely, but not impossible. Health insurance policy is ordinarily sufficient.

Although there are otherways to provide an assurance of payment.

 

[Renato1]

I'd say your scenario is unlikely, but not impossible. Health insurance policy is ordinarily sufficient.

Although there are otherways to provide an assurance of payment.

Thanks Dr Ralph,
I'd say extremely unlikely in western Europe - but worry about Asia, eastern Europe, the Middle East and Africa, each of which I either am going to or was thinking of going to in the next year and a half.
Regards,
Renato

 

[JohnK]

Am I worrying too much about something impossible, or is there some small likelihood that it can happen?

I'll try not to go somewhere where they would require payment up front for treatment.

The rest can be taken care of by my comprehensive travel insurance.

 

[There'sOnlyOneJimmy]

Completely agree.

Can't wait to have a drop down box in their internet banking portal and hit cancel, no phone agent asking "why are you cancelling, could we look at doing anything additional" yada yada. No, click the button, get the confirmation, and get on to the next churn card!

Looks like you’re getting your wish... spotted today on the WBC banking app... (look to the bottom of the screenshot)

 

[rock86]

Looks like you’re getting your wish... spotted today on the WBC banking app... (look to the bottom of the screenshot)

Nice. Really though, I (naively) can't believe something has taken so long to be implemented..........

 

[Renato1]

I'll try not to go somewhere where they would require payment up front for treatment.

The rest can be taken care of by my comprehensive travel insurance.

Thanks, but that's the problem - how does one know that will or will not be the situation until it happens?
Cheers,
Renato

 

[JohnK]

Thanks, but that's the problem - how does one know that will or will not be the situation until it happens?

We don't know. Let's hope it doesn't happen and you have to sell your left kidney to get treatment.

 

[Renato1]

We don't know. Let's hope it doesn't happen and you have to sell your left kidney to get treatment.

The recipient wouldn't be too happy - I get kidney stones.
Cheers,
Renato

 

[travelislife]

I guess if people value points highly then it makes them feel much better accruing points.

My thinking is the same as yours as I am comfortable in economy. I would value points at around 0.5c-0.7c/point on international redemptions. Sometimes more depending on the complexity of the route and seasonality if one can get awards early.

I can usually purchase 3 economy airfares to Thailand for $2000. Using points for economy awards would require 168,000 points + AUD854 which would make my points worth 0.0068c/point. With 50% awards that makes points worth 0.0136c/point.

I don't value business that highly. At a stretch 50% more and certainly not what an airline thinks business is worth. I can't see premium surcharges as QF23/QF24 have no availability but on EK there and back surcharges are ~AUD1850 which would value 360,000 points at 0.00319c/point. Going to HKG is a little better as surcharges are ~AUD1150 and would value 360,000 points at 0.00513c/point.

I look at it completely differently (each to their own!). For starters those surcharges are ridiculous that you are paying. Our upcoming trip trip return to Europe with stop in coughet had cost a total of $380 of fees for 2 adults plus 1 infant.

Secondly I view the points I get as giving me the opportunity to travel in the pointy end for less than I would have to pay for economy. Economy fares for our trip would have been $3500+. For $380 plus points that have cost me nothing we are traveling business class.

Let the credit card churning roll on!

 

[sevenfourtyseven]

Just announced this afternoon - this might make churning a lot more difficult as well.

18-257MR ASIC prescribes three-year period for credit card responsible lending assessments | ASIC - Australian Securities and Investments Commission

"Today ASIC published a feedback report (REP 590) which outlines the submissions received and ASIC’s responses. ASIC Credit (Unsuitability-Credit Cards) Instrument 2018/753 has also been created.

In REP 590 ASIC provides further guidance on the assumptions that should be made when assessing whether a consumer can repay the credit limit within three years. This includes guidance on:

· fees on credit card accounts

· interest rates charged on credit card contracts held with other credit providers, and

· the effect of the reform on responsible lending assessments for other credit products.

The new legal requirement commences on 1 January 2019. Credit providers are expected to have systems in place to ensure that that they can meet the new obligations.

The revised obligations will apply to licensees that provide credit assistance and licensees that are credit providers for both new credit card contracts and credit limit increases under existing credit card contracts."

Haven't read in detail just yet but at a glance, there will be other factors taken into account with every application.

 

[Dr Ralph]

Just announced this afternoon - this might make churning a lot more difficult as well.

18-257MR ASIC prescribes three-year period for credit card responsible lending assessments | ASIC - Australian Securities and Investments Commission

"Today ASIC published a feedback report (REP 590) which outlines the submissions received and ASIC’s responses. ASIC Credit (Unsuitability-Credit Cards) Instrument 2018/753 has also been created.

In REP 590 ASIC provides further guidance on the assumptions that should be made when assessing whether a consumer can repay the credit limit within three years. This includes guidance on:

· fees on credit card accounts

· interest rates charged on credit card contracts held with other credit providers, and

· the effect of the reform on responsible lending assessments for other credit products.

The new legal requirement commences on 1 January 2019. Credit providers are expected to have systems in place to ensure that that they can meet the new obligations.

The revised obligations will apply to licensees that provide credit assistance and licensees that are credit providers for both new credit card contracts and credit limit increases under existing credit card contracts."

Haven't read in detail just yet but at a glance, there will be other factors taken into account with every application.

Can't see this having any impact on people who have assets/income.

 

[rock86]

Can't see this having any impact on people who have assets/income.

I would agree.

The majority of banks already assess credit cards at a 3% repayment per month, that is $450 per month on a $15,000 limit. The new legislation of 3 year payback will push this up to a max of around 4.3% per month on premium card rates, so on a $15,000 limit you'll need to allow an extra ~$200 a month in assessing whether you apply for the card or not. This will most likely have an effect on churners that hold multiple cards with high limits, so a review of your churning practise may be necessary.

I always have plenty of headroom on my repayment calculations when churning cards, and have no problem with this legislation as I'd suggest that the people this does effect the most probably shouldn't be applying for those cards in the first place.

 

[burmans]

Can't see this having any impact on people who have assets/income.

Like most of these measures this is designed to stop banks lending to people at exorbitant rates when the people they lend to can't really afford it, in my view a good thing. For those who can and pay off everything each month probably a low/minimal impact.

 

[knightfall88]

To my surprise, I was declined on the spot for the 40k bonus points credit card with Macquarie (only requested $6000 limit). It's my first time and the only card I have active is the Westpac Altitude that I applied for a month ago. I can't imagine it to be anything to do with my income and expenses given I'm a single high income earner who lives with parents. Oh well, time to put on the brakes for a while.

 

[Dr Ralph]

To my surprise, I was declined on the spot for a credit card with Macquarie. It's my first time and the only card I have active is the Westpac Altitude that I applied for a month ago. I can't imagine it to be anything to do with my income and expenses given I'm a single high income earner who lives with parents. Oh well, time to put on the brakes for a while.

There are certain banks that tend to have higher reported reject rates. These include Macquarie, Bendigo, HSBC and Westpac. So don't worry too much. And it isn't necessarily time for a break


Check your credit scores before making any decisions.

 

[deebens]

To my surprise, I was declined on the spot for the 40k bonus points credit card with Macquarie (only requested $6000 limit). It's my first time and the only card I have active is the Westpac Altitude that I applied for a month ago. I can't imagine it to be anything to do with my income and expenses given I'm a single high income earner who lives with parents. Oh well, time to put on the brakes for a while.

Same. As Dr Ralph said, it's bank related. I even got knocked back for the lowest level jetstar card. Noticed over on the ozbargain Bendigo thread someone saying the same, so it wasn't just me. Would like that Bendigo card as I'm in a Qantas points valley until next year, but highly doubt I'll be approved.

 

[Duffa]

To my surprise, I was declined on the spot for the 40k bonus points credit card with Macquarie (only requested $6000 limit). It's my first time and the only card I have active is the Westpac Altitude that I applied for a month ago. I can't imagine it to be anything to do with my income and expenses given I'm a single high income earner who lives with parents. Oh well, time to put on the brakes for a while.

Ha ha, KF88.. welcome to the churner club!
I'm only just recovering from a bank imposed moratorium a couple of years back.
Like you, I have a good income, have never defaulted.
It's just that I applied for too many cards in 3 months