Credit Card Strategies (intrigued)

[big_RED]

I'm keen to hear how everyone decides to manage their credit card churning/every day credit card strategy as I feel I'm in a pickle now.

For me, I always look for the 1ppd Qantas cards. This is proving hard as ANZ, nab and Qantas Premier are really the only cards that provide this (at an affordable yearly fee).

After having the Qantas nab card for 9mths I move to ANZ, and now that the ANZ 12mths is approaching I'm looking to move again. However, unless I want to move to a 0.75ppd earning card there aren't many options to stay with a 1pdd card... I'm still waiting to hear back from Qantas Premier (previously CitiBank) to understand if me having a nab card 9mths ago considers me a "current customer" as that'd mean I won't receive bonus points, and I have no other 1ppd cards to go to.

It made me wonder, should I just pay the ANZ yearly fee and keep this as my day-to-day card which gives me 1ppd. Or do others out there just take the hit, sign-up to the 0.75ppd cards and just keep churning through them all, capturing the larger sign-up bonuses which you consider better value than worrying about 0.75 vs 1ppd earn rates for your every day spend?

 

[piratematerial]

Unless you’re spending tens of thousands a month that ppd difference is a rounding error compared to sign up bonuses.

 

[levelnine]

Unless you’re spending tens of thousands a month that ppd difference is a rounding error compared to sign up bonuses.

Exactly. When you are spending towards a sign up bonus, the regular earn rate is irrelevant. You should always be working on a sign up bonus if you are able to churn credit cards. Keep a spread sheet to track your eligibility for sign up bonuses. Generally you become eligible for a new one 12 months after closure of the same card (or a card in the same family), so close cards ASAP. (One notable exception is Amex, where it is 18 months.)

If you can't churn cards for any reason (eg retired or about to attain a home loan), I still wouldn't fret over the earn rate. The difference between 1 point per dollar and 0.75 point per dollar is a mere 12.5K points on $50,000 spend — not even enough for one way business class between SYD and MEL. You need to be spending hundreds of thousands of dollars per year for the 1/0.75 difference to make a sizeable impact on your points balance. If you are unable to churn, you are far better off spending your time chasing other bonuses, such as bonus points with wine orders and the current Optus 60,000 points deal.

 

[NoName]

I don’t even consider the earn rate because I never plan to keep the card long or spend much on it anyway. I only care about the sign on bonus & what sort of annual fee I will have to pay.

 

[Dr Ralph]

I'm keen to hear how everyone decides to manage their credit card churning/every day credit card strategy as I feel I'm in a pickle now.

Strategy? Churn every card available as quickly as you can and then start again.

 

[big_RED]

Appreciate the replies. Looks like I've been getting too focused on the ppd earn rate vs aiming for the sign up bonuses.

I tend to keep my cards for about 6-9mths just so my credit score is high enough to keep the game going. But I'll start focusing on the smaller banks to collect all the bonus points.

Thanks!!

 

[Dr Ralph]

I tend to keep my cards for about 6-9mths just so my credit score is high enough to keep the game going.

There's your mistake.

Income and ability to repay is all you need to worry about

For the most part, credit score is irrelevant. I promise you that my credit score is lower than yours, but I churn 6+ cards a year.

 

[Ade]

After having the Qantas nab card for 9mths

That is 6 months too long to hold a card. To be efficient in churning, it is recommended to close the cards ASA the bonus points have landed in your QFF account. The sooner you close, the sooner you can can churn again ... some cards have 12 & some have 18 month waiting/exclusion period.

your every day spend?

For everyday spend, I use QF Amex Ultimate. Earns 1.25 (or 1.125, can't remember) per $

 

[big_RED]

There's your mistake.

Income and ability to repay is all you need to worry about

For the most part, credit score is irrelevant. I promise you that my credit score is lower than yours, but I churn 6+ cards a year.

Haha ok. Note taken! I needed to be careful before I got a mortgage last year, but now that's done let the fun scale back up!

 

[big_RED]

That is 6 months too long to hold a card. To be efficient in churning, it is recommended to close the cards ASA the bonus points have landed in your QFF account. The sooner you close, the sooner you can can churn again ... some cards have 12 & some have 18 month waiting/exclusion period.

I was never too fussed about this as I could do ANZ, nab, Westpac, Amex, Citibank and therefore had plenty of cards to choose from. But things have obviously declined in the last few yrs so thought the ppd was important as well.

Obviously not!

 

[MG1]

Hi, guys,
I'm fairly new to the credit card game and would appreciate some guidance.
1) Is the second-year bonus ever worth sticking around for (especially as, in most cases, you'll be paying the full annual fee)?
2) When closing a credit card, is it as simple as closing it on the bank's website (after the that month's points have transferred across)? Is there anything else that I need to look out for before applying for another card (in order to not adversely affect my credit score)?
3) How long does it normally take for the credit reporting agencies to show that the card has been closed (in order to show that my credit limit has been reduced)?
Any responses would be greatly appreciated.

 

[big_RED]

1. Personally I say no. Receiving 30k points for $450 in fees for instance isn't great as previously you'd have got 90k points for $250 fees. It's much more economical to cancel the card once you get the initial, much larger bonus points so you can do it all again with that bank 12mths later (as per "Ade's" message a few above)

2. You need to make sure you've paid the card off in full, and have stopped any recurring debits (e.g Netflix, gyms). Most banks will transfer the outstanding points once the card is closed in my experience. I've always called the bank to cancel the card just to check this last point. I haven't seen many where you can cancel online (but I might not have looked well enough)

3. Someone might be better suited to reply, but I'd say 1-2mths later the credit report would update to show the card has been cancelled. I know with CBA they thought I still had a card active 1mth after cancelling it, so I had to upload the cancellation letter from ANZ to prove the card was cancelled before CBA were happy to give me the card. I've never had that issue with any other bank before as I normally don't cancel a card until I've got my next one in my pocket.

Hope this helps, and welcome to the forums!

 

[Ade]

I know with CBA they thought I still had a card active 1mth after cancelling it, so I had to upload the cancellation letter

Same experience here. Cancelled QF Premier with Citi, but the cancellation did not reflect in credit report for 3 or so months post cancellation. CBA wanted to know if I had any other credit cards, I said no, but they said your credit report still shows as Open. I then sent the cancellation letter to proceed.

 

[Ade]

1) Is the second-year bonus ever worth sticking around for (especially as, in most cases, you'll be paying the full annual fee)?

Depends. If you have a genuine use for the card and the 2nd bonus is a sizable chuck, comparable to the annual fee, then yes. But so far, I have never seen any cards that are worth the 2nd year. As a churner, the intention is to close the cards as soon as the bonus points hit your account and you move on. For instance, sometime this year (2022), ANZ had 130K QF points for $450/year, however, only 100K points were awarded for the first year and remaining 30K on payment of the 2nd year annual fee of $450. IMHO, 30K points for $450 isn't worth it.

2) When closing a credit card, is it as simple as closing it on the bank's website (after the that month's points have transferred across)?

I usually close the credit card on the banks' website. However, in some instances I had to call the bank just to ensure the closure has gone thru. For instance, with ANZ when I closed the Black card, I called them to check because the annual fee was going to be deducted the next day. Wanted to ensure that this doesn't happen and the closure has indeed gone thru successfully.

Is there anything else that I need to look out for before applying for another card (in order to not adversely affect my credit score)?

Cancel any direct debits. I also make sure that I leave a $ or 2 extra on the card when closing. So that the card is in credit. It's just my thing. The bank always sends a cheque to refund that extra $ or 2. I also unlink/remove the cards from my iPhone wallet, Apple Watch etc as well

3) How long does it normally take for the credit reporting agencies to show that the card has been closed (in order to show that my credit limit has been reduced)?

Normally a month or 2, but my experiences have varied. Please see this post

Hope this helps and welcome to AFF. @MG1

 

[MG1]

Thank you big_RED and Ade for your informative and quick replies. What both of you have said makes sense. I think that following up with the bank, to confirm the cancellation, is a good idea.

If the card takes 2-3 months to come off my credit report, it sounds like as long as I've got proof that it has been cancelled, then it should be alright.

With regards to direct debits, if the card has been closed/cancelled, would the transaction just bounce back as it's going to a non-existent account?

 

[big_RED]

With regards to direct debits, if the card has been closed/cancelled, would the transaction just bounce back as it's going to a non-existent account?

I've never had to test this as I always know what direct debits I need to move. I'd assume most cards might bounce the transaction, others might let it go through, but charge you a fee as you aren't good at life admin lol

 

[celsioraus]

I do 6-7 cards a year all for sign up bonus averaging about 400-500k points a year.
Alot of the cards are the 60k, 3k min spend for 99 a year which is much better value than the top card depending on the promotion.
Best Spends are to:
* top up Internet (Aussie Broadband shows credit on the app)
* top up water, gas, electric
* pay land rates year in advance (only 1 card didnt honor this govt spending (ANZ)
* buy amazon gift cards and load into your amazon account (as good as cash)
* buy qantas wine (best bonus points will get you 50k+ for 1k of wine)

I have 9 Business class flights booked this year.
Sitting at 800+ credit score.

 

[MG1]

I've never had to test this as I always know what direct debits I need to move. I'd assume most cards might bounce the transaction, others might let it go through, but charge you a fee as you aren't good at life admin lol

Good to know - thank you.

Post automatically merged: Jan 9, 2023

I do 6-7 cards a year all for sign up bonus averaging about 400-500k points a year.
Alot of the cards are the 60k, 3k min spend for 99 a year which is much better value than the top card depending on the promotion.
Best Spends are to:
* top up Internet (Aussie Broadband shows credit on the app)
* top up water, gas, electric
* pay land rates year in advance (only 1 card didnt honor this govt spending (ANZ)
* buy amazon gift cards and load into your amazon account (as good as cash)
* buy qantas wine (best bonus points will get you 50k+ for 1k of wine)

I have 9 Business class flights booked this year.
Sitting at 800+ credit score.

Nice work - opening that many cards a year and to still have an 800+ credit score.

 

[Stargazer]

If your strategy is to churn cards ASAP (as soon as points land in your account) then why set up direct debits? You will then need to direct these to a new card. Why create extra work?

 

[Stargazer]

If your strategy is to churn cards ASAP (as soon as points land in your account) then why set up direct debits? You will then need to direct these to a new card. Why create extra work?

I should have pointed out in my previous post that I will retain (not close) my two Westpac Altitude accounts as a lot of my banking is processed through these cards. That includes a massive number of direct debits. From a churning perspective, not the most efficient strategy but one I am comfortable with.