How do I maximize sign up bonuses with Qantas points whilst minimizing the downsides?

Credit Cards & Credit Card Programs
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Hi everyone,

Thought I’d start this post with a few things about me. I spent a large part of my youth working and haven’t travelled in a very long time. I’ve only recently ventured into the world of earning points for flights abroad because I feel like I have a lot of time to make up for. So, I got my first QFF points earning credit card a couple months ago. I’ve since racked up 190K points with the bulk of this obviously being the sign up bonus. But, needless to say, I’m hooked.

My first card got approved almost instantly. I think this has something to do with my salary. Over the past couple weeks, I’ve been talking to a couple people who have said something about getting the sign up bonuses and then cancelling, then reapplying.

Now, there just seems like there’d be downsides to this. What I’ve been able to discover so far is that it might hurt your credit score or risk you being rejected for QFF points earning cards in the future. You also can’t apply for the same card within 12 months of cancelling it. I really don’t want to get rejected from other applications I might want to make in the future.

I wanted to reach out to the community to confirm if cycling through credit cards for introductory offers has a huge downside. On top of this, what is the best way to maximize signup bonuses without risking your future prospects?

Thanks so much.

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Hi @naeiou

Thanks for your very thoughtful question and welcome to the world of point hacking!

I’m looking forward to reading other people’s thoughts on this because everyone has different opinions and perspectives. Here are mine:

  • The big potential downside of cycling through credit cards is that it will negatively affect your “credit rating” or “credit score”. Potentially, this means that applications for credit in the future may be rejected. So if, for example, you know that within the next six to twelve months you’ll be applying for a large amount of credit for something you really want or need (eg. a home loan or car loan), then it might be worth going easy on your credit card cycling.

  • To be honest, having an application for a credit card rejected is no big deal. It’s happened to me a couple of times and, apart from a feeling of slight deflation that lasts for about five minutes, I can confirm that it has not in any way, big or small, affected the quality of my life, wellbeing, personal happiness, “future prospects” etc. It happens, but it doesn’t actually matter.

  • There are plenty of things you can do to limit the negative impact on your credit score (apart from the obvious ones such as always paying bills on time). The two I would strongly recommend are (1) before you take out a new card, cancel the old one, and (2) always opt for the minimum credit limit that the credit card allows.

  • Finally, take the time to learn how credit scores are calculated and what impacts them positively and negatively. Two good websites which allow you to monitor your credit score, and learn about how they’re calculated, are getcreditscore.com.au and clearscore.com.au . Ignore foreign (eg. American) guides because credit scores are calculated differently in different countries.

Hope this helps!

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Hi @sixtyeight,

Thanks for that incredibly thoughtful response :slight_smile:. The credit score websites were not something I knew about.

It’s reassuring to know that I’m already doing a few right things like paying everything on time and setting the minimum credit limit. My plan in cycling was also to always pay everything off, cancel, then swap as opposed to going with the option to transfer the credit.

It sounds like for now it’s not such a huge risk to do this annually (to avoid the annual fee of the next year), but best to avoid doing it at a higher cadence like quarterly especially if there’s an imminent home loan which I might need.

If I’ve misunderstood something, please let me know. But if not, you’ve been such a great help. Thanks a lot!

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Hi @naeiou

Glad to have helped! Yes, if you’re looking to take out a home loan, it’s best to minimise your credit applications before you apply — just in case. Having said that, I’ve taken out four credit cards this year (with Virgin Money, Westpac, NAB and ANZ). As a result my Credit Score with Get Credit Score is slightly lower than 12 months ago, and my score with Clearscore is slightly higher.

Going forward, my only other advice to you for the time being would be to seriously consider Velocity and flexible rewards programmes: if you’re looking to redeem your points for an international business class flight, at the moment having only Qantas points will potentially lead to a world of frustration.

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Thanks @sixtyeight. This is really good to know. Hadn’t considered that because I didn’t know about the flexible program. I just thought Qantas had more international presence. I’ll do a bit more research on this end and consider switching!

Looking at the interest rates at the moment, maybe I’ll hold off on the home loans for now so I’m open to taking out 4 cards similar to you. Are you taking out the credit cards to get the bonuses, paying them off, then cancelling as well?

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That’s exactly what I’m doing!

There are some credit cards that I keep (my American Express cards and a Coles Rewards Mastercard which is great overseas as it has no international transaction fees). Everything else I cycle through for the points.

As for Qantas having a greater international presence than Virgin: it absolutely does. But that doesn’t mean that more flights are available to book with Qantas points.

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It’s a great response by @sixtyeight but I can’t agree on the comment - “The big potential downside of cycling through credit cards is that it will negatively affect your “credit rating” or “credit score”. Potentially, this means that applications for credit in the future may be rejected.”. If you have the discipline and know your way around, the credit scores are not impacted negatively (at least for me and the family members). I churn thru at least 4 cards a year (5 card applications this year) and my credit score has always been at the Excellent level

I can’t say what you should do but this is what I follow

  • Apply for a card
    I always make sure to churn only 1 card at a time and opt for the min credit limit - this helps with keeping my overall credit limit at a min
    I always make sure to pick the correct card (the highest bonus points may not be the best deal all the time - in my opinion a Platinum card offering 110k bonus points for $0 annual fee is a better deal than a Black/Signature card offering 130k bonus points for $450 Annual fee)
  • Meet the min spend ASAP but be smart (make sure I am not spending on categories that don’t meet the min spend requirements for that specific card)
  • Get the bonus points (Always make sure the bonus points are credited to your account)
  • Close the card (Close the churning card ASAP to minimise the waiting period for that card)
  • Repeat

Other things that I follow (very strictly),

  • Always pay off the CC bills in full
  • If planning to take a new home loan or refinance, I keep off new card applications for around 3 months before I apply for the HL/Refinance
  • Credit card application rejections happen (happened twice in last 4 years) but I keep quiet for a month and then apply for a new one
  • I have a list of preferred cards (specific cards with specific banks) and usually stick to them unless the bonus is very very tempting
  • I always try to balance the points type (Qantas/Velocity) and prefer flexible rewards
  • Same as @sixtyeight my ongoing cards are an AmEx and Coles MC - Never let go of a chance to earn the referral bonus on the AmEx card
  • Have a record of all the card application dates and card closure dates
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Hi @ck009,

Thanks for sharing your opinions!

I’d really love to hear more about a couple of your points. Mainly:

  • I have a list of preferred cards (specific cards with specific banks) and usually stick to them unless the bonus is very very tempting What sort of criteria do you use to select your cards? Why do you prefer certain cards and banks over others?

  • I always try to balance the points type (Qantas/Velocity) and prefer flexible rewards Could you say more about what you mean by this? Are you pumping points into both programs?

  • Same as @sixtyeight my ongoing cards are an AmEx and Coles MC - Never let go of a chance to earn the referral bonus on the AmEx card Having more than one CC seems a bit daunting for me because of the annual fees. Do you just have the $0 annual fee ones and use them irregularly or swap your purchases between the cards based on category to maximize points?

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This seemed like quite the conversation so I thought I’d chime in as well.

The law of diminishing marginal returns definitely applies when it comes to credit cards. Eventually, you will extract minimal benefit for an additional card you apply for and keep in the long run. I do churn sometimes maybe once or twice a year just to top up the points balances but for AMEX, I can’t because I’m holding one consistently. I don’t see much downside to doing it, and I’ve managed to keep my portfolio of cards pretty small (definitely no insane wallets with 27 credit cards or anything you see on Youtube).

Currently, I have a few go-to cards for different purposes.
For general points earn, I have the AMEX Platinum. I was going to cancel but they gave me a little stash of points to keep it so I was happy to keep it at least till next year. I think it is the highest flexible points earning card in Australia so it’s where the bulk of spend goes. For travel, I use this as well for the insurance if I’m paying in Australian Dollars.
For supermarkets specifically, I have the Platinum Edge as well as it gives 3 points per dollar which is the highest earning of all my cards.
The annual fee for the Platinum is high, but worth it for me given I travel quite a bit (both personally and for work), and I can use the dining credits, hotel statuses, and travel credits. The platinum edge pays for itself with the 200 dollar travel credit.

For international spend, I use the newly released Bendigo Bank credit card which doesn’t earn any points, but gives me travel insurance. It’s free and has a pretty low credit limit so it doesn’t hurt me one bit.

Otherwise, I put non-Amex local spend on the HSBC everyday debit as it gives 2% cashback under $100 paywave, which covers most other transactions. For amounts greater than that, I have a suncorp clear options platinum credit card I got with my home loan which earns a marginal amount of points so it’s better than nothing.

I find that covers all my spending needs and I don’t pay annual fees and get nothing back in return. Essentially, my thought process is, will I use the card enough to at least double my returns for the annual fee. I think that is a pretty good litmus test for most application decisions. For example, I used to have the Commbank Ultimate Awards card which earns extra points for foreign spend, but now I’m not spending as much overseas, I cancelled the card as I no longer see value in paying the annual fee for the points I earned. I’d rather give up the points and pocket the cash.

I do churn the cards that come out from ANZ, Citi, nab, etc when they have good offers. I agree with @ck009 that it is about the opportunity costs of going for those sign up bonuses as well. I don’t find that too difficult though. I think it is generally worth redirecting around $3000 of my planned spending on non-bonus categories to get those 75-100k points. Most often they have the reduced first year annual fee and I think with the opportunity costs added in you are looking at buying say 75k points for around 400 dollars which is way cheaper than the value I’d get out of it.

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This is indeed a great discussion and let me just add one more point about credit card annual fees.

Using points for flights does not mean that the flights are free. It just means that the flights are (relatively) dirt cheap! You’re normally paying taxes and carrier charges, and you’re also paying whatever it costs you to acquire the points.

So, for example, if I’m booking a long-haul business class trip on a premium airline which costs $5000, I’m still getting a bargain if I have to pay, say, $200-$300 in credit card annual fees to get the points I need for the flight on top of, say, $400 in carrier charges, plus the opportunity cost of having the card.

This is my typically long-winded way of saying that credit card annual fees are part of the price you pay to effectively accumulate points. I’m not saying that you can’t accumulate points with no-annual-fee cards. But if you don’t want to pay annual fees, expect points accumulation to take a lot longer.

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Hi all!

Thanks for sharing in such detail @djtech. I suppose what I’m trying to do is trying to get as many points as I can get (annual fees aside) from my existing levels of spend.

For context, I do have a corporate card which I have to use for most work related expenses (some meals, flights, hotels, taxis, etc.). Most of the other things I would be using these cards on would be on personal food, retail, personal travel etc. I haven’t really looked at the fine print for points per each category but should probably do so to see which card to use where (but please let me know if this is overdoing it?).

@sixtyeight, I totally understand. I’m not really against paying the annual fees. I suppose my question was mainly around the fact that we have existing levels of spend (e.g. $2-3k per month). With multiple cards in the wallet, you’d have to split your monthly spend between them. Having too many for different purposes means you might not be able to hit the spend thresholds to get the bonus points. I had interpreted from what you said in your previous message that you might have some cards in your holster that you keep just to earn on the odd transaction.

Another layer to this is my corporate card is an AMEX, and a few places don’t accept it. So I feel like I always need at least a MC/VISA in my wallet.

My current plan is to have:

  • My corporate AMEX (work related expenses)
  • Local (1) Coles mastercard (for the odd transaction and no annual fees?), (2) Cycled credit cards based on best point bonuses (prepared for large annual fees here, to be used as the main card)
  • International Not sure what card this will be yet as everyone has different opinions on this, but please let me know if there are any recommendations. Is it just travel insurance and low forex rates as the primary evaluation criteria?
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For churning purposes, a good way to hit the minimum spend if you don’t want to divert too much away from your existing set up is just to buy some giftcards. Woolworths or JB Hifi giftcards and the like are pretty easy to spend, so I typically go with those especially when they have a little bit of cashback or bonus points offers going.

For International, I only have two key requirements which is fee free FOREX and travel issurance. I try to find the cheapest no annual fee card that does it because the points earning ones often have fees for a modest level of points earn and I just don’t think its worth it.

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Good to see the elite members of the community join the conversation. Very good points asked and answered.

@naeiou I wanted to respond to your questions

What sort of criteria do you use to select your cards?

While choosing cards I consider 2 factors

  1. Assess if my current profile meets the card requirements - for example if I am currently holding 50k worth of credit cards, I probably won’t be approved for another 15k card (Black/Signature card) - in this case I will pick the card with lower min credit limit 6k (Platinum)

  2. See how profitable the bonus offer is (to me). For example, I value each point at a certain $ value (x for Q, y for V, z for MR) etc. I calculate the $ value of each offer and decide which one to apply for.

Why do you prefer certain cards and banks over others?

It’s more of a familiarity than a preference…it’s like - I am familiar with the bank’s processes and the bank is familiar with my profile.

Could you say more about what you mean by this? Are you pumping points into both programs?

I try to apply for bonus points offers for different programs (Qantas/Velocity/MR/ANZR/WAR) so that I have a healthy/balanced stash in all programs. I don’t stick to earning just Qantas or Velocity points and prefer to convert any flexible reward points to Krisflyer points.

Having more than one CC seems a bit daunting for me because of the annual fees. Do you just have the $0 annual fee ones and use them irregularly or swap your purchases between the cards based on category to maximize points?

This was better answered by @sixtyeight and @djtech ….my 2 cents below….

I don’t shy away from cards with Annual fee but look for the value I can get out of them - like travel-credits/ perks / free-subscriptions

Most Amex cards (almost) pay for themselves in the form of travel credits, AmEx offers and some other cards include subscriptions like ‘Priority Pass’ etc.

As @sixtyeight mentioned, it’s not about getting flights/hotels for free - it’s about getting the best flights for your pennies

Re maximising the points, @djtech has explained about using different cards for different categories. You can also maximise by the way you make your spend

For example - my council rates can be paid directly using Visa/MC - this way I will earn 1.5 reward point per $ spent that converts to 0.5 Krisflyer point but if I pay the same bill via PostBillPay and PayPal, I can use AmEx - this way I will earn 2 MR per $ spent that converts to 1 Krisflyer point

@djtech made a comment - I do churn sometimes maybe once or twice a year just to top up the points balances but for AMEX, I can’t because I’m holding one consistently. I have mentioned this earlier but one more time - AmEx DJ cards are considered as a separate product line which means even if you are holding an AmEx card you can apply for the DJ card and get any bonus points on offer (DJ cards are not offering bonus points for new applications atm)

@naeiou made a comment - With multiple cards in the wallet, you’d have to split your monthly spend between them. Having too many for different purposes means you might not be able to hit the spend thresholds to get the bonus points. If I am looking to meet the min spend for bonus points, all my spend goes on that specific card until the min spend is made coz the bonus points (tens of thousands) are more important than the 2s or 3s I get for spending certain card on certain category. Once the min spend is made, I go back to using specific cards at specific places/purposes.

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Thanks @ck009 and @djtech for the insight. There’s a whole world of cards out there with flexible programs and being able to transfer them. I had originally zeroed in on pure frequent flyer points earning credit cards because that was my main redemption goal.

I’ve got a lot of points stocked up on MR because of my corporate card, but need to check out what’s available in ANZR and WAR.

It is genuinely hard to be a points hacker with a lot of research required. It’s exciting though and I’ll try to get a hang of it!

Some small follow ups:

  1. I noticed the points are credited monthly (or by statement). If you cancel your card before this ticks over, do you lose all your earned points for that month or do they still honor it?
  2. Do you keep an eye out for good bonus points deals in Qantas/Velocity/MR/ANZR/WAR and apply, or is it more of “It’s been 3 months and I’ve gotten my bonus points on my previous card already. Time to find a new card.”?. Former is more of sniping good deals while sitting on existing cards vs the taking up a new card at a set cadence.
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@naeiou

  1. I noticed the points are credited monthly (or by statement). If you cancel your card before this ticks over, do you lose all your earned points for that month or do they still honor it? - Amex credits MR points as soon as the purchase is processed/confirmed; ANZ Rewards credits points the same way; most of other cards credit points with the statement. If you cancel a card before the statement, the bank will still credit the points to your account for all the purchases made and then you will get a grace period to redeem your points (transfer to an airline partner or buy gift cards etc)

  2. Do you keep an eye out for good bonus points deals in Qantas/Velocity/MR/ANZR/WAR and apply, or is it more of “It’s been 3 months and I’ve gotten my bonus points on my previous card already. Time to find a new card.”?. Former is more of sniping good deals while sitting on existing cards vs the taking up a new card at a set cadence. - As I mentioned earlier, I close the churning cards as soon as the bonus points are credited and then I start looking for a new card with good deals, TBH good deals turn up quite often but I would not apply for a poor deal. The point is to never miss a good deal if you are eligible for it. For example my BIL finished his waiting time for AmEx and has been waiting for a better bonus points offer on AmEx Explorer for a few months but in the meantime he applies for other deals but not go for the rather poor AmEx Explorer offer (I am waiting for my share of the referral points for his application).

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Just to add to the above post, most banks I’ve found will still credit points owed when you close the card when the final statement comes through. However T&Cs also usually state that you won’t be eligible for bonus points if you close the account prior to them being credited.
So make sure any bonus points have hit your frequent flyer account before you close.

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