Monday, June 19, 2017

Credit card churning, level 2

Ok, here the main game is:
- get a card with a sweet bonus
- meet the Minimum Spend
- get some bonus points
- downgrade it at the end of your first year
Who can do this? Anyone who can get approved for sweet credit cards. (if you can't get approved, then get some less-prestigious credit cards with no fees, use them for a while, always pay them off, and eventually your credit rating will be better and you'll get approved.
You might not want to do this if you're buying a house soon - it'll ding your credit just a bit. But that wears off.

1. Get a card with a sweet bonus.
You're looking for, ideally, 30-50k points/miles, and annual fee waived for the first year. Some of these that I've done include:
Barclay AAdvantage Aviator Red
Barclaycard Arrival Plus
Capital One Visa Signature
Chase Sapphire Preferred
Chase IHG Rewards Club
Chase MileagePlus Explorer
Citi ThankYou Premier
Citi American Airlines AAdvantage Platinum Select

Maybe check r/churning to see what's popular now. Sometimes there are particularly good deals (like the MileagePlus Explorer is usually 30k miles but sometimes 50k), so try to jump on those. The Chase Sapphire Reserved was even 100,000 miles when it first came out! 100k deals usually don't last long, though. If I see a 100k I'll jump on it; and usually a 50k is worth it too.
Note that, to me, hotel miles are worth about half of airline miles. So if you're looking at a hotel card, try cutting those values in half.

Ideally this will be in an airline/hotel you want to use, or use often, or a convertible rewards program. For example, Tati and I had our wedding planned at an IHG hotel in Pittsburgh, so I used the IHG points I got from this thing to book us some free rooms. And I fly United a lot, so those miles will get used.
Convertible rewards programs are stuff like Chase Ultimate Rewards or Citi ThankYou. These are points that you can convert into specific airline/hotel miles, or sometimes use them for other things too.

2. Meet the Minimum Spend
All these deals will have some kind of minimum spend to get the big bonus, like "50,000 bonus miles after you spend $3000 in the first 3 months." Just start using the card for everything. If you wouldn't end up spending that much in 3 months, there are ways to spend a small fee to "buy" points - just look up "manufactured spend" on r/churning. For this reason, I usually don't churn more than one card at a time - it can be hard to meet the MS on all of them.

3. Get the points
They'll usually automatically post with little fanfare, and it's not usually as soon as you meet the minimum spend, so you might have to check on it a little bit.

4. Downgrade at 1 year
The CC companies are trying to get you to start paying the annual fee (after they waive it for the first year). You just have to remember to "downgrade" your card - roughly, trade it in for a "lesser" card with no annual fee. Like, I traded an AAdvantage Platinum Select ($90ish fee) for an AAdvantage Bronze (no fee). Course, the AAdvantage Bronze has no big perks... but that's ok, because at this point, you stick it in a drawer and don't really use it for anything.

To do this, just call them, at the number on the card or wherever. Ask them to downgrade this account to a no-fee card. They are usually more than happy to help. They'll often have a bunch of different ones - it doesn't matter which one you pick, because you're not going to use it anyway. You can usually do this a little after the 1 year mark; then they'll refund your annual fee. Sometimes they'll let you do it before 1 year.

An added benefit of this is you now have more credit available to you, which improves your credit score. If they won't downgrade your card, you could always just close the account. But I think I've only had that happen once.

Total benefit: ~50k points, up to 3-4 times a year. 1 point is worth roughly $0.01, so we're talking ~$500 each time.
Total cost: $0.
Total effort: well, nonzero. But it's not terribly a lot of work.

Monday, June 12, 2017

Credit card churning, level 0 and 1

Sometimes I play the credit cards game, to get a little bit of bonuses without paying money. I'm a pretty-inactive member of reddit.com/r/churning. Many friends have asked me "if I don't want to think about it and just get a decent bit of credit card rewards what should I get?" Basically, what's the 80/20?

I tried to check /r/churning, but it's an insane mess, I think mostly because this question is complicated, because obviously that's the CC companies' game. Nobody will just make a card that is Strictly The Best, because they're all grabbing the tiny percent of edge from people who aren't quite using their cards to the max potential. So, everyone in /r/churning is trying to figure out how they particularly can get a tiny percent of edge because they always fly Delta or buy a lot of groceries or something. And it's the kind of nerds who love to get a tiny bit of edge.

So for me, there are a lot of answers, and I feel like I should have a good canned one. It depends on a lot. Let me tell you a few of your options, depending on how much you want to spend:
- Level 0: 40/1/$0. 40% of the benefits for 1% of the work and 0 dollars.
- Level 1: 60/1/$100. 60% of the benefits for 1% of the work and $100/year ish.
- Level 2: 80/20/$100. 80% of the benefits for 20% of the work and $100/year ish.
- Level 3 and beyond: beats me. I think I'm at about level 2.

Level 0:

At this level, you basically never want to think about which credit card you have. I think that for you the Chase Freedom Unlimited is the way to go. Click a link here:
https://www.reddit.com/r/churning/comments/5ta38h/official_chase_freedom_unlimited_referral_thread/ (or if it's later than about July 2017, search for the new Freedom Unlimited Referral Thread)
Simple 1.5% cash back on everything, and $150 signup bonus. And Chase's web site is not as terrible as some others.
(I think this because I feel like I've heard about it on forums sometimes. so, confidence about 70%. also, I gave you the /r/churning link, b/c if you click someone's link there, they get $100 referral bonus, which doesn't hurt. I would give you my own referral link but I don't have a Freedom Unlimited so I can't, unfortunately.)

Level 1:

Here, you basically never want to think about which credit card you have but you are willing to spend about $100/year on it. Two options, and they both give you Chase Ultimate Rewards points, which you can redeem for a bunch of different mileage programs, or Amazon or whatever. They are pretty good points. Plus, on either of these, you'll get 50k bonus points after you spend $4k within the first 3 months - so get the card then use it as much as possible within that time frame.

Chase Sapphire Reserved

$450/year, but $300 of travel expenses (planes, hotels, airbnbs, etc) gets automatically refunded. So if you're using it, and you travel, it's effectively $150/year. Gives you a bunch of points and some other travelly benefits (some lounge access, reimbursement for TSA Global Entry).
(More info on this card, and the difference between it and Preferred.) No referral link for this one, but you can get there on that "more info" link.

Chase Sapphire Preferred

$95/year after the first year, gives you almost as many points. Good in-between if you don't want to spend quite $150, or if you don't think you'll spend $300 on travel in a year. Apply here (my personal referral link).

Just get one of these cards and then use it for everything. Then one day you will have a ton of points and you can book a flight or something.
(boy, this sounds like I'm paid by Chase, doesn't it? I mean, I'm not. They just do tend to have the best points for most people. Note that if you have an airline you fly a lot, especially Southwest, you might want to get the card for that airline instead, as long as it has a 30k or more point signup bonus.)

Level 2

I'm gonna leave this part of the guide for another day.