Seeking advice for someone starting out Point Hacking

Credit Cards & Credit Card Programs
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1

Is it possible to:

  • Sign up to a new CC with bonus points
  • Obtain bonus points
  • Sign up to another CC a few months later with bonus points
  • Do an (interest free) balance transfer to this new card of the remaining balance of original card (understanding that this doesn’t go towards bonus)
  • Spend enough to get bonus on new card?

Or is this plan flawed? The only thing I can tell from reading up about it is how soon after getting the first card I apply for the second one. Apparently it might affect credit rating or similar?

Thanks for your help!

2

Hi benthomas,

In answer to your three questions:

Is it possible? Yes, it’s perfectly possible.

Is it flawed? In my opinion, yes. The problem is that balance transfers cancel out the normal interest-free repayment period until the full balance transfer is paid back. So if you do a balance transfer, all purchases etc, on the credit card that you do the balance transfer to, are charged at the full interest rate – probably about 20% – from day one. This is the case no matter how small your balance transfer is. It’s a much better strategy to pay off your previous balance in full before the end of the interest-free period.

Will it affect your credit rating? Yes, applying for credit puts downward pressure on your credit rating. The good news is that cancelling cards will put upward pressure on your credit rating! So it’s a good idea to cancel old cards at more-or-less the same rate as you apply for new ones.

Hope this helps!

3

Just to add on to @sixtyeight , interest free balance transfers typically aren’t offered along with some kind of bonus points offer. Usually its just one or the other.