Credit card bonus complexity

Last Friday, I published results from my successful retention call with Citi: My 130K phone call.  That made me realize that I should write a post about Citibank credit card strategies.  When should you sign up for new cards?  When should you call for retention offers?  How can you keep your points when you don’t want to pay the annual fee?  Etc.  So, I figured I would publish a post like that this week.

As I thought about the contents of a Citi credit card strategy post, I realized that a credit card signup strategy can’t be done in isolation bank by bank.  Chase’s 5/24 rules, in particular, need to be acknowledged.

OK, so I would write a Chase strategy post first and follow up with a Citi strategy post a day or two later.  But… part of any Chase strategy post should include specific strategies for staying under or flying over the 5/24 rules.  That brings me to Amex.  Of all the banks, Amex probably has the most business card offers.  And, since those do not impact the 5/24 count, I need to fit in an Amex signup strategy too.  Maybe a general business card strategy would be even better…

At this point I was just overwhelmed thinking about it all.  It reminded me of my post about how to prevent your brain from exploding.  To save my brain, I decided to start with this simple-to-write post detailing credit card complexity…

Credit Card signup complexity

For those who like to earn points, miles, and cash by signing up for credit cards regularly, the landscape has become more complicated than ever before.  For example, Chase has implemented its infamous “5/24” rule for most, but not all cards.  You can sometimes get approved despite the 5/24 rule, or you can find ways fly under the rule.  The latter is possible because many small business cards do not contribute the 5 card limit.  But some do.

On top of the 5/24 rule, Chase has a 24 month rule that is different from any other bank’s rules.  With Chase, the 24 month clock starts, not when you open or close an account, but when you receive your signup bonus.  Well, who the heck tracks that?

Amex too has made things harder by implementing their once per lifetime rule across both personal and business cards.  That is, the signup offers state that you can’t get the bonus again if you’ve had the card before.  But, is the rule really enforced?  We know that the rule is not enforced when people receive targeted offers without the once per lifetime language.  That’s a nice exception (except that my family has yet to receive any of these offers!).

Amex then sprinkles additional complexity on top of their processes by limiting people to signing up for no more than 1 credit card per day and no more than 2 per 90 days, and you can’t have more than 4 credit cards total.  Except when you can.  And, of course, Amex charge cards are exempt from these rules.  How do you know which cards are charge cards instead of credit cards?  Most cards named after colors and metals are charge cards: Gold, Green, Platinum, and Plum.  Co-branded cards (Delta, Hilton, SPG), “Simply” cards, Everyday, and Blue cards are credit cards.  Simple, right?

Citibank didn’t want to be left out of the complexity fun so they implemented a 24 month rule on top of their already complicated rules.  To apply for the same card you’ve had before, you have to wait 24 months after opening or closing the prior account.  What about product changes? Do those reset the clock too?  It’s unclear.  If you product change from product A to B, does that mean you have to wait 24 months before applying for product A?  What about B?  And then Citi has it’s great old standbys: You can signup for, at most, 1 personal card per 8 days and 2 personal cards per 65 days.  Business cards seem to be limited to 1 per 95 days, but since they only advertise one rewards business card (the American Airlines card) I’m not sure it matters anyway.  But, maybe it does matter since as recently as September 2015 our own Devil’s Advocate found a 40K in-branch offer for the old CitiBusiness ThankYou Card.

Complicated Credit factors

There are many factors that impact your credit score and your ability to get new credit: credit inquiries, credit utilization, payment history, age of credit history, account mix, etc.

Credit Inquiries are tracked separately by credit bureau, but the other factors are shared.

Credit utilization is reported by banks, usually based on your statement balance.  In other words, if you pay off your balance before the statement is finalized, they’ll report a low utilization (which is good).  But some banks report utilization on specific dates.

When you are added as an authorized user to an account, it can impact these factors.  Authorized user cards don’t generate new inquiries, but they usually appear on your credit report as new accounts.  Except that some banks don’t require SSNs for authorized users.  In those cases, if the primary cardholder’s address does not match any addresses on your credit report, your new authorized user card most likely won’t appear on your credit report.

When you apply for new business cards, the credit inquiries will impact your personal credit, but the new accounts won’t show up on your personal credit history.  In other words, business cards have very little impact on your personal credit.  Notable exceptions include business cards from Barclaycard, Capital One, and Discover since they are known to report business cards to the personal credit bureaus.

Complicated signup bonus requirements

Most signup bonuses have seemingly simple requirements: spend $X in Y days, and get Z points.  But… Does the clock start on the day you apply, the day you are approved, the day you activate your card, or some other time?  Doctor of Credit has many of the answers here.

What charges count?  We know that cash advances and credit card fees, including annual fees, do not count towards bonus minimum spend.  But what about other types of charges?  Amex’s terms & conditions say that “purchases or reloading of prepaid cards” do not count, but in practice we know that they do.  Do any banks enforce restrictions like these?  Then there’s US Bank.  Some people have discovered the hard way that spend on employee cards does not count towards minimum spend requirements.

Wrap Up

On the surface, signing up for credit cards in order to earn bonuses appears simple.  And, for those who just dabble in it, it really is simple.  For those who sign up for cards often, though, the details become important.  And, unfortunately, the details can be overwhelming.

I’ve done a bit to simplify things by adding an App Tips table to the top of each bank’s section on my Best Offers page.  Next, I’ll start writing up strategies based on the current rules as we know them.  Then, the banks will undoubtedly change the rules that those posts are based on.  When that happens, I’ll publish new strategies… if my brain doesn’t explode first.

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