Hi all, just been introduced to this frequent flyer concept and I am excited to travel more.
I saw a card that gives you 100,000 + bonus points on sign up, and costs a small fee every year as long as you spend x dollars within the first few months.
My questions are:
Can you just keep signing up to these indefinitely? If not, how many cards could I get a year?
Can I just cancel them all straight after I’ve got the sign up points?
Are there any things I need to look out for by doing this? Any tax implications, or will I ruin my credit score somehow and be unable to get a bank loan to buy a house?
Hi! Welcome to the wonderful world of points! Let’s address your questions one by one:
Can you just keep signing up to these indefinitely?
Simple answer is yes*!
*Boring T&Cs apply
Longer answer - depends on the credit card provider, they often have a cooling period. I.e. you won’t be considered a new customer if you’ve held the card in the past 36 months or something like that, so you can in effect sign up for that particular bank’s offerings every 3 years. That doesn’t stop you signing up for other banks’ though!
If not, how many cards could I get a year?
There are technically no limits to how many cards you can apply for and get in a year. However, there are limits as too many could be a sign for financial stress which then leads to you getting rejected for credit cards in return. Most churners, as we call them, usually get a new card every 2-4 months. Some are more dedicated and get one every month, but that is certainly a bit rarer. You’ll have to keep in mind that you need to spend to get the bonus. If you already struggle to spend $3000 every three months, then getting multiple cards and needing to spend over $10000 every three months would be a pretty grand challenge and defeat the point of getting the card and points without EXTRA spending.
Can I just cancel them all straight after I’ve got the sign up points?
YES! That’s the beauty of it. You can just hold a card for 5 months or so, and then be done, just like that. Some cards are a bit sneakier and offer their bonuses in stages - first in the 3 months you meet the spending requirements, and then the second after you’ve renewed the card for another year and paid another annual fee. Nothing is stopping you from cancelling anytime - in fact, it is the law that when you specifically say you want to CANCEL the card, they MUST do it for you without any form of persuasion for you to keep the card. There will be cards where the benefits pay for themselves so you hold on to them. That’s often the case with the AMEX cards, where they provide a credit to use at the same value as the annual fee. AND, if you are paying the annual fee anyway, you might as well hold on to it right until the next annual fee is due to max out any potential benefits you have from holding the card (travel insurance, lounge passes, and the like).
Are there any things I need to look out for by doing this?
It all sounds really nice to hold a billion credit cards in your wallet but there are a few things to look out for.
While it’s become less common now, a lot of the more premium cards with the super high bonuses do have minimum income requirements. Make sure you met those before you apply
b) Credit limits
Again, the premium cards with high bonuses have a high credit limit baseline. You have to watch this limit if you ever want to get a home loan or car loan or whatever loan as they calculate your ability to borrow based on your existing credit as one of their many factors.
c) Repayments ON TIME!!
Apart from paying the annual fee, make sure you are also paying off all your purchase in time!! The interest charged on late payments basically negate all the rewards you’d otherwise earn
d) Don’t spend more than you have to (and spend it right!)
Just like how after pay has made us all shopaholics, credit cards have the ability to do the same. The smart way to do this is convert your existing spending on groceries, bills and the like onto your credit card spend to meet those requirements for bonus points. However, check carefully what spending counts towards those bonus points. Things like paying off your tax bill and your rego don’t count a lot of the times! Always read the fine print!
Any tax implications, or will I ruin my credit score somehow and be unable to get a bank loan to buy a house?
The idea of having lots of credit cards ruining your credit score is a pretty outdated concept nowadays. Our system is a bit different to the Americans who dominate the credit score conversation on YouTube and the internet, but generally, as long as you are reasonably getting credit without looking like you are desperate, you should be fine! The biggest risk to your credit score is not making repayments on time. As long as you don’t do that, there is no major risk to your credit score.
Having a high credit limit may affect your ability to get a bank loan to buy a house - this will likely mean not being able to borrow at the very limits of what your income allows as you already have other forms of credit from your credit cards. What people tend to do if they are planning on a major house purchase is cut their churning habits around a year or so before, so they have plenty of available room to borrow.
As for tax, these bonus points are NOT taxed! Easy peasy.
Love @djtech 's response as usual.
I would only add that as not a hardcore churner myself, whenever I have refinanced home loans or applied for home loans in the past couple of years, the banks/brokers will advise to close/reduce credit card limits if that is hindering your desired borrowing power.
Compared to credit card applications, which are generally automated to a certain extent, home loans are assessed individually by an assessor. They would take a look at all your personal finances. If you have a stable income and not many black marks on your credit file, generally you should be fine.
I can’t say whether having 1 new card every month in the last 24 mths will jeapardize your chances of a home loan approval but definitely will raise questions. So might be better to play it safe if you know you will be getting a home loan in the next 12 mths.
As usual, we are not qualified financial advisors so please consult the professionals and consider your own circumstances whenever choosing a financial product.
Good luck. Welcome to PointHacking and keep the questions coming.
Great write ups by @djtech and @w.hiew!!!
The only thing I would add to their wealth of knowledge would be to start a spreadsheet to track each card… include info such as:
- Card name/type
- date applied
- date approved
- Bonus reward points on offer
- Required minimum spend to receive bonus points
- time frame for minimum spend
- annual fee
- bonus points cut off date
- credit limit
- when bonus limit hit
- have bonus points been credited to our FF program account
- date card closed
Lastly, you will need to track each type of card and banking group - when you cancel a card, work out what date 18months in the future that you will once again be eligible to apply for a FF Bonus points card from that same institution again.
At present, the “blackout period” is usually around 18 months, but it does vary so be sure to always read the fine print - all of it - and even the whole PDS document to ensure you aways understand what you’re getting into. It’s not fun or sexy but definitely could save you the pain of missing out on your bonus points.
One last suggestion too… always keep 1 main credit card that you can use for your recurring expenditure and points earning while you are “between” bonus cards or in the black out period etc… That way you can always be earning points and you can have your direct debit payments for say internet or gas bills remain constant. Changing those every time you churn a new card is a pain in the backside. Having said that though, I try to limit the number of direct debit payments I have to make, so that I can maximise the spend when I do have a new card to hit a bonus limit on.
I’ve been points hacking and card churning for 5 years in anger now and have managed to hack my way through 16 Cards, a couple of Mortgage bonuses, Health Insurance, fuel & phone deals to name just a few… plus all the normal spending that earns points too. That in itself can be north of 60,000 points per year. I even used card to pay for a deposit on a car on 2 occasions!
As an idea of what’s possible (and I’m not even as hard core about it as others I’ve come across) but for just the bonus points on cards and services, I’ve earnt just on 2.4 million Qantas FF points over the past 5-6 years. I’ve not found there to be any impact on my credit score either. Follow all of @w.hiew & @djtech’s great advice around payments and not overspending and you should be successful.
I’d suggest pacing yourself with cards - you’ll get a feel for how many you can do per year to spread your bonus points earnings whilst hacking around the blackout periods. Having said that though, if you just want to go large and bank a massive wad of bonus points you may not be concerned with the blackout periods. So in that case the speed with which you can accrue points is only limited to the number of cards you can financially handle and can comfortably hit the spend requirements etc…
I have more than one spreadsheet too. Haha. Used to have one to keep track of all the payments until I’ve decided to align the dates to conserve some brain juice.
Thanks everyone for sharing your knowledge, amazing!
I’ve got two more questions
- when it comes to the annual fee, how is this paid?
- after you’ve done the minimum spend, how long until this is confirmed / transferred to the qantas frequent flyer points? I assume its a bad idea to close the card until the points are transferred over!
Wow 2.4 million points, incredible. I’ve started a spreadsheet!
when it comes to the annual fee, how is this paid?
- It is usually debited to your account and will appear on the first months statement.
after you’ve done the minimum spend, how long until this is confirmed / transferred to the qantas frequent flyer points? I assume its a bad idea to close the card until the points are transferred over!
- It varies - within days sometimes, and up to 6-8 weeks for others. The timeframe for the crediting of bonus points is usually outlined somewhere in the terms and conditions of the card - another reason to read all the fine print. Most times even if there is an 8 week timeframe in the terms, my experience is that it rarely takes that long.
- Yes, never close a card until you see those points sitting in your rewards account.
Best of luck, and happy hacking!