switching main credit card

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RustyShackleford
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switching main credit card

Post by RustyShackleford »

I have been a loyal Penfed customer for years (starting with the awesome 6.25% APY CDs years ago). Their VISA has been my main credit card since then (1% cashback on everything, 2% on groceries, 5% on gasoline). But the card is gradually "eroding". For years, they just credited the cashback to your monthly bill. Then they went to a "rewards points" system where you have to take action to get the bonuses. Then they devalued those so you no longer effectively get $0.01 in gift cards per point (more like $0.008 or so).

So I'm thinking of making Southwest VISA be my primary card, and would like to run my logic by the group. I signed up for it for their huge 50,000 signup bonus. But they give 1 point per dollar spent, which at the redemption rate of 70 points for a dollar of Southwest airfare, works out to about $0.015 per point, a lot more than the less than $0.01 of Penfed. Yes, there's a $99 annual fee (versus none for Penfed), but you get a 6000 miles annual bonus, which effectively gives you $86 of the $99 back.

This makes the huge assumption that the Southwest airfare money is as valuable to me as cash, but I think that's reasonable, as I fly almost exclusively on Southwest.

I will miss that Penfed automatically pays my bill via bank draft. And I might keep the Penfed for the 5% on gasoline, though I hate having a fistful of credit cards. Also, this will prevent me from signing up for new Southwest VISAs every two years and getting a new 50,000 bonus.
2stepsbehind
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Re: switching main credit card

Post by 2stepsbehind »

when did you get the Southwest card and how much have you spent on it? It would have been better for you to get two southwest cards so that you could get a companion pass. It might not be too late, but you'd be cutting it very close on qualification.
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Doom&Gloom
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Re: switching main credit card

Post by Doom&Gloom »

2stepsbehind wrote:when did you get the Southwest card and how much have you spent on it? It would have been better for you to get two southwest cards so that you could get a companion pass. It might not be too late, but you'd be cutting it very close on qualification.
+1

Check the timing of your spending carefully. IIRC, the critical issue is whether your 50k points will post to your account in 2014 or 2015.
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Re: switching main credit card

Post by RustyShackleford »

Doom&Gloom wrote:
2stepsbehind wrote:when did you get the Southwest card and how much have you spent on it? It would have been better for you to get two southwest cards so that you could get a companion pass. It might not be too late, but you'd be cutting it very close on qualification.
+1

Check the timing of your spending carefully. IIRC, the critical issue is whether your 50k points will post to your account in 2014 or 2015.
Thank you both for replying.

Why does it matter if the points post in 2014 or 2015 ? The critical issue (for getting another bonus) is that you have to wait 24 months, as I understand it, calendar year having nothing to do with it. FWIW, first payment due date is 12/24, but I had not reached the $2000 threshold (for bonus) by the time that statement closed, though I have now, so likely the statement with those add'l charges (that put me over $2000) will close by New Years.

What's all this about two cards and a companion pass ? You mean get a business card too ? Please explain more, thanks !
2stepsbehind
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Re: switching main credit card

Post by 2stepsbehind »

RustyShackleford wrote:
Doom&Gloom wrote:
2stepsbehind wrote:when did you get the Southwest card and how much have you spent on it? It would have been better for you to get two southwest cards so that you could get a companion pass. It might not be too late, but you'd be cutting it very close on qualification.
+1

Check the timing of your spending carefully. IIRC, the critical issue is whether your 50k points will post to your account in 2014 or 2015.
Thank you both for replying.

Why does it matter if the points post in 2014 or 2015 ? The critical issue (for getting another bonus) is that you have to wait 24 months, as I understand it, calendar year having nothing to do with it. FWIW, first payment due date is 12/24, but I had not reached the $2000 threshold (for bonus) by the time that statement closed, though I have now, so likely the statement with those add'l charges (that put me over $2000) will close by New Years.

What's all this about two cards and a companion pass ? You mean get a business card too ? Please explain more, thanks !
The critical issue for getting the companion pass is all points earned have to be done in a calendar year. There are 2 personal cards (I believe one has a $69 annual fee, the other $99) and 2 business cards. If you get two of these cards (any combination) with the 50k bonus offer attached on each and do some additional spend you can amass 110k points fairly easily which would qualify you for the companion pass. You don't have to wait 24 months to get multiple cards.

Unfortunately, as I alluded to above it is unlikely that you could get a new card and get the required spending done and have the card close by the end of the year but it might be possible if you applied today, got the card expedited, and requested a statement close date on the 20th or so, but that requires you making at least 6k in spend in the next ~10 days.

edit: any chance you could return some of your purchases that you made that took you over the 2k threshold? It is unlikely to work, but it might be worth the attempt.
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midareff
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Re: switching main credit card

Post by midareff »

I have their Platinum Visa and they deduct the 5 percent for gas monthly. I only use it for gas. You might like BOFA's double cash card as a replacement.
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Re: switching main credit card

Post by Lafder »

I love my Southwest Airlines Visa. Everytime I look at other cards and think about changing it isn't worth it. SWA does fly to the locations I go to most often.
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runner9
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Re: switching main credit card

Post by runner9 »

Is the Southwest card better than Fidelity AMEX, 2% back on everything?
aw82
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Re: switching main credit card

Post by aw82 »

midareff wrote:You might like BOFA's double cash card as a replacement.
I think you're talking about the Citi Double Cash card (pays 1% cash back on purchased, plus 1% back when you pay your bill, so essentially 2% cash back).

Comparing the PenFed card and the Southwest card (or Fidelity Amex and Southwest) is apples and oranges. There are basically two types of rewards credit cards: 1) loyalty points/miles and 2) cash back. It's easier to compare the latter type as all cash is relatively equal (although some give more cash for certain categories while others give higher average cash back levels). Comparing points and miles cards/programs is very complicated and depends on your travel habits/preferences.

So the question is, what is your primary goal? Cash back, which is what your PenFed card gives, or travel rewards?
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Re: switching main credit card

Post by RustyShackleford »

2stepsbehind wrote:The critical issue for getting the companion pass is all points earned have to be done in a calendar year. There are 2 personal cards (I believe one has a $69 annual fee, the other $99) and 2 business cards. If you get two of these cards (any combination) with the 50k bonus offer attached on each and do some additional spend you can amass 110k points fairly easily which would qualify you for the companion pass. You don't have to wait 24 months to get multiple cards.
Thanks for explaining. I don't want to tie myself in knots trying to get the companion pass - to me this only makes sense if it's not THAT much trouble: apply for a card online, use it for main spending 'til I reach the bonus threshold, wait for the miles, cancel it. BUT, you do bring up a good point about getting multiple SW cards; I'm a bit confused - you can get ANY two, so personal and business, or $69 or $99 version of either, or mix and match ?
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Re: switching main credit card

Post by RustyShackleford »

midareff wrote:I have their Platinum Visa and they deduct the 5 percent for gas monthly. I only use it for gas. You might like BOFA's double cash card as a replacement.
You mean the direct-deduction version of the Penfed ? Yeah, I thought about retaining the Penfed for gasoline and maybe groceries.
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Re: switching main credit card

Post by RustyShackleford »

runner9 wrote:Is the Southwest card better than Fidelity AMEX, 2% back on everything?
Probably not, but since I don't have any accounts with Fidelity, I feel kind of like it' be the tail wagging the dog to open one just for that card.

Dunno about the BofA one, how does it work ?
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Re: switching main credit card

Post by RustyShackleford »

aw82 wrote:So the question is, what is your primary goal? Cash back, which is what your PenFed card gives, or travel rewards?
My goal is maximizing my monetary benefit. For the purposes of this decision, let's assume I[m going to fully utilize the frequent-flyer miles for air travel that I'd otherwise purchase with cash; given the straightforward conversion rate for Southwest points, coupled with my preference for flying with them*, I think this is reasonable.

* They have the most non-stops to western cities (my typical destination, preferring driving in the east) of any airline from my home airport. Also, I love that they don't screw you for cancellations and changes. Oh, and there's the free bags.
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Re: switching main credit card

Post by johnny847 »

For a general purpose credit card that will be used for purchases don't fit a targeted category like groceries, gas, etc., you're better off with either the Fidelity Amex or Citi Double cash:

1) Fidelity Amex - 2% cash back, must be deposited into a fidelity account (but you can set one up for free, no minimum deposit required). This is an Amex, so some small merchants may not accept it. Depends where you live.
2) Citi Double Cash - 1% cash back + 1% when you make your payment (so really 2% since you should be making on time payments anyway). Can redeem cash back as statement credit or check. This is a Mastercard, basically 100% acceptance.

Neither of the above have any fees. Assuming you could really treat Southwest points like cash, you're looking at 1.43 cents per dollar spent (well not really, I'll explain later), with an effective annual fee of $13.20 because of the 6000 mile annual bonus. So clearly, you're earning less than either of the above options.

Caveats:
1) You can't treat Southwest points like cash. They can be devalued (it used to be 60 points per dollar to redeem, not 70).
2) You're saying that you have an effective annual fee of $13.20 because of that annual miles bonus. But you're trading the most liquid asset - cash - into an illiquid psuedo currency.
3) You don't earn 1.43 cents per dollar, because when you redeem, it costs 70 points per base fare dollar. So most taxes and fees are excluded (9/11 security fee is not excluded). You can see some examples http://millionmilesecrets.com/2014/06/0 ... nts-worth/

I'd recommend the following:
1) Get either the Fidelity Amex or Citi Double Cash
2) Consider a Sallie Mae Mastercard. It gives 5% back on the first $250/250/750 on groceries/gas/bookstores every month, and 1% thereafter. Amazon counts as a bookstore. You can get cash back as statement credits. You do not need to be a student to get this card. If your gas and/or grocery budget fits within those limits, the Sallie Mae is incredibly good. If you are married and don't fit in those limits but would fit in double those limits, have your spouse get one too.
3) If the Sallie Mae isn't for you, I'd look at the BoA Cash Rewards (3% gas, 2% groceries, 1% everything else), the Amex Blue Cash Everyday (3% groceries, 2% gas, 1% everything else), or the Amex Everyday.
All of the above have no annual fee.

The Amex Blue Cash Everyday has an annual fee version, the Blue Cash Preferred, that gets 6% on groceries, 3% on gas, and 1% on everything else. For both blue cashes, there is a limit on the bonus grocery cash back of $6000 in purchases a year.

The BoA Cash Rewards has a limit on bonus gas + groceries cash back of $1500 in purchases a quarter.

The Amex Everyday earns 2x Amex membership points to groceries (first $6000 in a year) and 1x everywhere else. It earns a 20% bonus on all points if you make at least 20 transactions a cycle (hence the everyday name). The Amex Everyday Preferred earns 3x points at groceries (first $6000 annually), 2x at gas stations, 1x everywhere else. 50% bonus if you make at least 30 transactions per statement.

These Amex points are transferrable to 18 or so different airlines and hotel partners. The notable ones are Delta, JetBlue, and British AIrways (for their short haul redemptions).
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Re: switching main credit card

Post by aw82 »

You should also consider the Barclaycard Arrival. It blurs the lines between a travel rewards card and a cash back card. Essentially, you earn 2.2% on all your purchases (2% on purchases plus 10% of your points refunded after redemption), which can be redeemed dollar-for-dollar to reimburse yourself for travel purchases (plane tickets, hotels, Uber, rental cars, Amtrak, things purchased via Travelocity/Priceline/etc.).

For example, you spend $20,000 on the card, which gives you 2% back (they enumerate it as 40,000 points). You then buy a $372 ticket from Southwest. In a separate purchase, you pay $52 for an Enterprise rental car. After your purchases post, you can redeem 37,200 points to reimburse yourself for the plane ticket. The Arrival card then gives you a 10% refund on your points, returning 3,720 points to your account. Your point balance is then 6,520 (worth $65.20). You can then redeem 5,200 points for your Enterprise purchase. Then you get 520 points refunded and your point balance is 1,840. You can also do partial redemptions (if, say, your rental was $78, you could redeem 6,520 points to get a $65.20 account credit).

The Southwest card will edge out the Arrival card slightly in terms of redeeming for Southwest flights, but the Arrival card offers much, much more flexibility.
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Re: switching main credit card

Post by johnny847 »

aw82 wrote:You should also consider the Barclaycard Arrival. It blurs the lines between a travel rewards card and a cash back card. Essentially, you earn 2.2% on all your purchases (2% on purchases plus 10% of your points refunded after redemption), which can be redeemed dollar-for-dollar to reimburse yourself for travel purchases (plane tickets, hotels, Uber, rental cars, Amtrak, things purchased via Travelocity/Priceline/etc.).
That's the Barclaycard Arrival Plus you're talking about (the non plus earns 2 miles per dollar on travel and dining, and 1 mile on everything else, but no annual fee).

It's a great card for the first year because of the $444.44 signup bonus and the introductory annual fee waiver, but after the first year, there is an annual fee of $89. When you compare it to either the Citi Double Cash or Fidelity Amex, you would need to spend $44,500 on the card after the first year to make the annual fee worth it. You can downgrade to the regular arrival after the first year, but then you only earn 2.2% on travel and dining.
aw82 wrote: The Southwest card will edge out the Arrival card slightly in terms of redeeming for Southwest flights, but the Arrival card offers much, much more flexibility.
Incorrect. The Arrival+ earns 2.2% cash back for redeeming for Southwest flights (or any other travel for that matter). The Southwest card earns 1 point per dollar. Each Southwest point is nominally worth 1.43 cents (but see the link in my previous post, it's actually somewhat higher than that - but still less than 2.2 cents). The Arrival+ earns more than the Southwest card. And, also consider that if you are using the Southwest card, your earnings are in the form of Southwest points. Meaning that compared to using the Barclaycard Arrival+, you will redeem for Southwest award flights using points more often (but you will still have more free flights through statement credits on the Arrival+). But, if you were using the Arrival+, your rewards are in the form of credit card "miles" - so you're earning "miles" for flights that would have been reward flights if you were using the Southwest card instead.

EDIT: Oops I forgot that the Southwest card earns more points for Southwest purchases. But for this to edge out the Arrival+ award rate, a large portion of the OP's spending would need to be Southwest purchases....while the OP didn't give us that proportion, I doubt that the math would work out in favor of the Southwest card.
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Re: switching main credit card

Post by takeshi »

I'd also suggest one of the 2% cards. If you're looking to move away from PenFed due to devaluing it doesn't seem to make sense to move to another points/miles system.
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Re: switching main credit card

Post by aw82 »

johnny847 wrote:
aw82 wrote: The Southwest card will edge out the Arrival card slightly in terms of redeeming for Southwest flights, but the Arrival card offers much, much more flexibility.
Incorrect. The Arrival+ earns 2.2% cash back for redeeming for Southwest flights (or any other travel for that matter). The Southwest card earns 1 point per dollar. Each Southwest point is nominally worth 1.43 cents (but see the link in my previous post, it's actually somewhat higher than that - but still less than 2.2 cents). The Arrival+ earns more than the Southwest card. And, also consider that if you are using the Southwest card, your earnings are in the form of Southwest points. Meaning that compared to using the Barclaycard Arrival+, you will redeem for Southwest award flights using points more often (but you will still have more free flights through statement credits on the Arrival+). But, if you were using the Arrival+, your rewards are in the form of credit card "miles" - so you're earning "miles" for flights that would have been reward flights if you were using the Southwest card instead.

EDIT: Oops I forgot that the Southwest card earns more points for Southwest purchases. But for this to edge out the Arrival+ award rate, a large portion of the OP's spending would need to be Southwest purchases....while the OP didn't give us that proportion, I doubt that the math would work out in favor of the Southwest card.
You're not considering the companion pass. It depends on the OP's overall spending volume, but if he can attain the companion pass every year, the Southwest card will be slightly better than the Arrival+.

That said, I wouldn't go for the Southwest card unless the OP is very likely to attain the companion pass since the redemptions aren't that great on Southwest. Nor would I keep the Arrival+ more than a year unless the OP will put $40,000 per year on it (so the 10% refund will make up for the annual fee). I would either go with the Double Cash or find a more lucrative airline card (such as British Airways to use for shorthaul on American, which can be worth 3-4% of spending).

PS: Sorry for not specifying the "+" part of Arrival+ in my earlier post. I've never heard of anyone purposefully getting the non-plus Arrival, so I'm not used to having to specify.
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Re: switching main credit card

Post by chrysogonus »

RustyShackleford wrote:
2stepsbehind wrote:The critical issue for getting the companion pass is all points earned have to be done in a calendar year. There are 2 personal cards (I believe one has a $69 annual fee, the other $99) and 2 business cards. If you get two of these cards (any combination) with the 50k bonus offer attached on each and do some additional spend you can amass 110k points fairly easily which would qualify you for the companion pass. You don't have to wait 24 months to get multiple cards.
Thanks for explaining. I don't want to tie myself in knots trying to get the companion pass - to me this only makes sense if it's not THAT much trouble: apply for a card online, use it for main spending 'til I reach the bonus threshold, wait for the miles, cancel it. BUT, you do bring up a good point about getting multiple SW cards; I'm a bit confused - you can get ANY two, so personal and business, or $69 or $99 version of either, or mix and match ?
I don't think you can get two 50k point bonuses for two personal cards or two business cards, but I could be wrong. It's also better if you can get all the bonus points to post in 2015, since then the companion pass would be good for 2015 and 2016 (it's the year you earn it plus the next year).

Also, the signup bonus for the other cards is now only 25k points. There will probably be a 50k bonus on another card in 2-3 months, so it might be worth delaying a bit and going for the companion pass later.
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Re: switching main credit card

Post by 2stepsbehind »

chrysogonus wrote:
RustyShackleford wrote:
2stepsbehind wrote:The critical issue for getting the companion pass is all points earned have to be done in a calendar year. There are 2 personal cards (I believe one has a $69 annual fee, the other $99) and 2 business cards. If you get two of these cards (any combination) with the 50k bonus offer attached on each and do some additional spend you can amass 110k points fairly easily which would qualify you for the companion pass. You don't have to wait 24 months to get multiple cards.
Thanks for explaining. I don't want to tie myself in knots trying to get the companion pass - to me this only makes sense if it's not THAT much trouble: apply for a card online, use it for main spending 'til I reach the bonus threshold, wait for the miles, cancel it. BUT, you do bring up a good point about getting multiple SW cards; I'm a bit confused - you can get ANY two, so personal and business, or $69 or $99 version of either, or mix and match ?
I don't think you can get two 50k point bonuses for two personal cards or two business cards, but I could be wrong. It's also better if you can get all the bonus points to post in 2015, since then the companion pass would be good for 2015 and 2016 (it's the year you earn it plus the next year).

Also, the signup bonus for the other cards is now only 25k points. There will probably be a 50k bonus on another card in 2-3 months, so it might be worth delaying a bit and going for the companion pass later.
You can get any two cards; you may have to explain why you need both flavors of the personal/business card, but that should be simple (e.g. I want to segregate expenses/better track spending).

Edit: you could probably get 3 or 4 of the cards if you like, but you only need two for the companion pass and limiting yourself to two helps you apply for the next two the following year so that you can re-qualify for the companion pass.
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Re: switching main credit card

Post by johnny847 »

aw82 wrote:
johnny847 wrote:
aw82 wrote: The Southwest card will edge out the Arrival card slightly in terms of redeeming for Southwest flights, but the Arrival card offers much, much more flexibility.
Incorrect. The Arrival+ earns 2.2% cash back for redeeming for Southwest flights (or any other travel for that matter). The Southwest card earns 1 point per dollar. Each Southwest point is nominally worth 1.43 cents (but see the link in my previous post, it's actually somewhat higher than that - but still less than 2.2 cents). The Arrival+ earns more than the Southwest card. And, also consider that if you are using the Southwest card, your earnings are in the form of Southwest points. Meaning that compared to using the Barclaycard Arrival+, you will redeem for Southwest award flights using points more often (but you will still have more free flights through statement credits on the Arrival+). But, if you were using the Arrival+, your rewards are in the form of credit card "miles" - so you're earning "miles" for flights that would have been reward flights if you were using the Southwest card instead.

EDIT: Oops I forgot that the Southwest card earns more points for Southwest purchases. But for this to edge out the Arrival+ award rate, a large portion of the OP's spending would need to be Southwest purchases....while the OP didn't give us that proportion, I doubt that the math would work out in favor of the Southwest card.
You're not considering the companion pass. It depends on the OP's overall spending volume, but if he can attain the companion pass every year, the Southwest card will be slightly better than the Arrival+.

That said, I wouldn't go for the Southwest card unless the OP is very likely to attain the companion pass since the redemptions aren't that great on Southwest. Nor would I keep the Arrival+ more than a year unless the OP will put $40,000 per year on it (so the 10% refund will make up for the annual fee). I would either go with the Double Cash or find a more lucrative airline card (such as British Airways to use for shorthaul on American, which can be worth 3-4% of spending).

PS: Sorry for not specifying the "+" part of Arrival+ in my earlier post. I've never heard of anyone purposefully getting the non-plus Arrival, so I'm not used to having to specify.
True. But more importantly, the 50,000 points bonus is now gone, so it'd be pretty difficult to attain the companion pass (unless the OP spends tons of money or flies very frequently with Southwest) And yup, I already mentioned the breakeven point (acutally a bit higher than $40k)
johnny847 wrote:When you compare it to either the Citi Double Cash or Fidelity Amex, you would need to spend $44,500 on the card after the first year to make the annual fee worth it.
Yea I wouldn't recommend anybody purposely apply directly for the non plus Arrival, unless they really want to get another signup bonus. It's usually mentioned in the context of downgrading the plus to the regular.
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RustyShackleford
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Re: switching main credit card

Post by RustyShackleford »

Wow, thanks so much for all the info and suggestions, folks ...

On the Southwest, it looks like the 50K bonus is now gone. I don't think I qualify for the business card. I could the get the Plus, in addition to my current Premier, but it'd only be 25K; like someone said, maybe I should wait. The link about the value of Southwest miles actually argues that they're worth MORE than 1.43 cents, typically 1.7 - not less. Anyhow, with these various options for 2% or more, I agree it's probably worth it only for the signup bonuses - especially since I don't see myself getting a Companion certificate every year.

I can't find anything that verifies for me that the Citi Double Cash is actually a MasterCard. Any links ?

The Sallie Mae is intriguing, certainly I won't typically exceed the limits for the 5% earnings on gas and grocs.

The ArrivalPlus looks nice too.

Some may think this kind of silly, but indulge me ... One thing I love about Penfed cards is the ability to download transactions, in comma-separated format for pasting into Excel; very useful for tracking spending, looking at stuff at tax time, etc. Can people with the Citi Double Cash, SallieMae, and ArrivalPlus tell me (or check) if that's possible with those cards ? I'm not interested in the printed out summaries of the year's spending that many cards provide, or with the ability to only download into Quicken (I don't use it). Thanks !
Last edited by RustyShackleford on Tue Dec 09, 2014 1:14 pm, edited 1 time in total.
aw82
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Re: switching main credit card

Post by aw82 »

RustyShackleford wrote:I can't find anything that verifies for me that the Citi Double Cash is actually a MasterCard.
Reports on FlyerTalk is that it is a MasterCard. Even if it's not, it would be a Visa (same level of acceptance)

Edit: I just checked my Barclaycard account and you can download in Excel, Quicken, and QuickBooks formats.
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Re: switching main credit card

Post by johnny847 »

aw82 wrote:
RustyShackleford wrote:I can't find anything that verifies for me that the Citi Double Cash is actually a MasterCard.
Reports on FlyerTalk is that it is a MasterCard. Even if it's not, it would be a Visa (same level of acceptance)

Edit: I just checked my Barclaycard account and you can download in Excel, Quicken, and QuickBooks formats.
Same here. And the Sallie Mae Mastercard is administered by Barclaycard so you're covered there too. I don't have a Citi Double Cash so I can't say anything about that with respect to downloading transactions.

I'd probably pair a Sallie Mae with one of Double Cash, Arrival+, or Fidelity Amex.
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Re: switching main credit card

Post by surfstar »

In summary, airline rewards cards are great when you get a 30-50k signup bonus and annual fee waived. Afterwards, you're best off with a ~2% cashback card.

I'm still working my way through signup bonuses, I am slightly bummed that I don't use my Sallie Mae card for gas because I need to hit spending requirements. But 40k miles for free isn't too shabby... currently on Citi AA card, had previously done United and Chase Sapphire Preferred (can be pooled and got 100k+) Planning on a free NZ flight next year :D
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Re: switching main credit card

Post by RustyShackleford »

johnny847 wrote:
aw82 wrote:
RustyShackleford wrote:I can't find anything that verifies for me that the Citi Double Cash is actually a MasterCard.
Reports on FlyerTalk is that it is a MasterCard. Even if it's not, it would be a Visa (same level of acceptance)

Edit: I just checked my Barclaycard account and you can download in Excel, Quicken, and QuickBooks formats.
Same here. And the Sallie Mae Mastercard is administered by Barclaycard so you're covered there too. I don't have a Citi Double Cash so I can't say anything about that with respect to downloading transactions.

I'd probably pair a Sallie Mae with one of Double Cash, Arrival+, or Fidelity Amex.
Yeah, just talked to Citi, they say it's MasterCard; I said it's not written on the card so how would a merchant know, and they said it's written on the back of the card. I really think Citi Double Cash is the way to go for me. I mean, 2% on EVERYTHING, with no limits, and no annual fee - what's not to love ?

Just use the Southwest cards when good signup bonuses available. Cancel my Penfed VISA and AMEX (or maybe keep the latter, because I guess an AMEX is useful occasionally, or not really ?) No Fidelity AMEX, since have to open another account. No ArrivalPlus, since too many hoops to jump through. Maybe a SallieMae too, but not sure worth it to have another card just to save 3% extra (over the Citi 2%) on the small amount I spend on gas and grocs (GF buys grocs in lieu of rent, and I don't drive to office these days).

Thanks for the download confirmation on the Barclay cards. Hope someone can confirm same for me with the Citi card.
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Re: switching main credit card

Post by aw82 »

RustyShackleford wrote:
Thanks for the download confirmation on the Barclay cards. Hope someone can confirm same for me with the Citi card.
I don't have the Double Cash card, but I just checked on my Citi AAdvantage card and Thank You Preferred and both will allow transactions to be downloaded in a variety of formats (Quicken, MS Money, CSV, TXT, and a couple of others).
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Re: switching main credit card

Post by RustyShackleford »

surfstar wrote:In summary, airline rewards cards are great when you get a 30-50k signup bonus and annual fee waived. Afterwards, you're best off with a ~2% cashback card.
Well said !
I'm still working my way through signup bonuses, I am slightly bummed that I don't use my Sallie Mae card for gas because I need to hit spending requirements. But 40k miles for free isn't too shabby...
Maybe I misunderstand you, but Sallie Mae looks like signup bonus is only 2,500.
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Re: switching main credit card

Post by RustyShackleford »

Thanks again, everyone - especially those who checked on my question about downloading transactions.
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Re: switching main credit card

Post by johnny847 »

surfstar wrote: I am slightly bummed that I don't use my Sallie Mae card for gas because I need to hit spending requirements.
With a 5% reward rate, it can still be advantageous for you to use the Sallie Mae anyway, depending on the numbers Here's why:
Call the card you're trying to meet a minimum spend on as X. Assume X earns 2.2% on everything, including gas purchases. Also, assume that you can manufacture spend on X for a net fee of 1,2% (one example is to buy prepaid Visa gift cards for a 1% fee, still earn 2.2% on the transaction and then offload it to an Amex Serve). Hence, by using your Sallie Mae, you get 5% back, at an opportunity cost of 2.2% + 1.2% = 3.4% because you could have used X to earn 2.2% directly, and avoid paying 1.2% to manufacture spend on it. You're still coming out ahead by using your Sallie Mae for gas.

Of course, if you don't want to get an Amex Serve, or you don't have a Walmart nearby to offload a Visa gift card onto a Serve, then this can change things. You can still buy those cards, but then you have to go through the inconvenience of spending them down (and now, if you use that card for a category that you would've earned higher than 1.2% on another card, you're incurring another opportunity cost). But there are other MS strategies, such as sending a friend money on Venmo with a 3% fee (so net 0.8% fee) and having your friend cut a check. You still come out ahead using the Sallie Mae on gas.
RustyShackleford wrote: Maybe I misunderstand you, but Sallie Mae looks like signup bonus is only 2,500.
I believe surfstar means he or she is using a different card that has a minimum spend requirement for a signup bonus for gas, as opposed to the Sallie Mae.
Last edited by johnny847 on Tue Dec 09, 2014 1:50 pm, edited 1 time in total.
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Re: switching main credit card

Post by johnny847 »

RustyShackleford wrote: Maybe a SallieMae too, but not sure worth it to have another card just to save 3% extra (over the Citi 2%) on the small amount I spend on gas and grocs (GF buys grocs in lieu of rent, and I don't drive to office these days).
Perhaps your gf should consider getting the Sallie Mae :D
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Re: switching main credit card

Post by niceguy7376 »

Citi Double cash is a Mastercard. They have every standard info on the backside.

What is Amex Serve and how does it fit into Credit Card bonus? Want to be enlightened,
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Re: switching main credit card

Post by aw82 »

niceguy7376 wrote:Citi Double cash is a Mastercard. They have every standard info on the backside.

What is Amex Serve and how does it fit into Credit Card bonus? Want to be enlightened,
It's a prepaid debit card* that you can load with up to $1000 per month via credit card. You can then use the account to pay your credit card bill (or better yet, your gas bill, rent/mortgage, etc.). You can effectively generate rewards from your credit card without actually spending any money. It's a good way to help you meet minimum spending requirements for credit card sign-up bonuses, or to generate $20/month (if you have a 2% cash back credit card). You have to be careful what credit card you use though. Amex cards won't generate any rewards and some cards (Citi, notoriously) code it as a cash advance. Barclaycard and Chase cards tend to be safe, though.

*I've never used the physical debit card, I just treat it like an online bank.
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Re: switching main credit card

Post by RustyShackleford »

johnny847 wrote:
RustyShackleford wrote: Maybe a SallieMae too, but not sure worth it to have another card just to save 3% extra (over the Citi 2%) on the small amount I spend on gas and grocs (GF buys grocs in lieu of rent, and I don't drive to office these days).
Perhaps your gf should consider getting the Sallie Mae :D
Dude, she is NOT into these credit-card games. It took a LOT of arm-twisting to get her to accept a Delta AMEX offer that gave her 60,000 miles as a signup bonus; yeah, there's a $195 annual fee, but she only has to spend $1000, and I'm fairly sure if she spends it by the statement where the annual fee is charged, and then the miles are tx'd to Delta before the due date, she can cancel the card and not have to pay the annual fee either.
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Re: switching main credit card

Post by 2stepsbehind »

RustyShackleford wrote:
johnny847 wrote:
RustyShackleford wrote: Maybe a SallieMae too, but not sure worth it to have another card just to save 3% extra (over the Citi 2%) on the small amount I spend on gas and grocs (GF buys grocs in lieu of rent, and I don't drive to office these days).
Perhaps your gf should consider getting the Sallie Mae :D
Dude, she is NOT into these credit-card games. It took a LOT of arm-twisting to get her to accept a Delta AMEX offer that gave her 60,000 miles as a signup bonus; yeah, there's a $195 annual fee, but she only has to spend $1000, and I'm fairly sure if she spends it by the statement where the annual fee is charged, and then the miles are tx'd to Delta before the due date, she can cancel the card and not have to pay the annual fee either.
I would not play those games with Amex.
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Re: switching main credit card

Post by johnny847 »

2stepsbehind wrote:
RustyShackleford wrote:
johnny847 wrote:
RustyShackleford wrote: Maybe a SallieMae too, but not sure worth it to have another card just to save 3% extra (over the Citi 2%) on the small amount I spend on gas and grocs (GF buys grocs in lieu of rent, and I don't drive to office these days).
Perhaps your gf should consider getting the Sallie Mae :D
Dude, she is NOT into these credit-card games. It took a LOT of arm-twisting to get her to accept a Delta AMEX offer that gave her 60,000 miles as a signup bonus; yeah, there's a $195 annual fee, but she only has to spend $1000, and I'm fairly sure if she spends it by the statement where the annual fee is charged, and then the miles are tx'd to Delta before the due date, she can cancel the card and not have to pay the annual fee either.
I would not play those games with Amex.
Agreed. And this probably won't even work - the miles will more than likely be transferred to Delta after the statement close.
RustyShackleford wrote: Dude, she is NOT into these credit-card games.
Well the Sallie Mae isn't even one you you churn for a signup bonus - you get it for the long term, for that 5% cash back rate. I wouldn't really call it a credit card game. But obviously you know your gf far better than I do
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Re: switching main credit card

Post by surfstar »

flyertalk
the bogleheads of airline rewards cards

and cancelling prior to an annual fee is standard. The miles are with your applicable airline frequent flyer program and not attached to a credit card.
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Re: switching main credit card

Post by johnny847 »

surfstar wrote:flyertalk
the bogleheads of airline rewards cards

and cancelling prior to an annual fee is standard. The miles are with your applicable airline frequent flyer program and not attached to a credit card.
Yes that's true. Maybe I misunderstood what RustyShackleford was saying, but it sounds like this Delta credit card has an annual fee that is not waived in the first year. He was advocating to meet the signup bonus, bank the miles, and cancel before the annual fee gets assessed (remember, the annual fee charged within the first month or two. Not the annual fee that gets charged a year form account opening). if I did understand RustyShackleford correctly, this sounds like a terrible plan (and I'm pretty sure this wouldn't even work, as generally the miles post to the frequent flyer account after account closing).

But cancelling around months 10-12? Yup, standard practice amongst churners. I plan on doing that too.
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Re: switching main credit card

Post by RustyShackleford »

2stepsbehind wrote:
RustyShackleford wrote:
johnny847 wrote:
RustyShackleford wrote: Maybe a SallieMae too, but not sure worth it to have another card just to save 3% extra (over the Citi 2%) on the small amount I spend on gas and grocs (GF buys grocs in lieu of rent, and I don't drive to office these days).
Perhaps your gf should consider getting the Sallie Mae :D
Dude, she is NOT into these credit-card games. It took a LOT of arm-twisting to get her to accept a Delta AMEX offer that gave her 60,000 miles as a signup bonus; yeah, there's a $195 annual fee, but she only has to spend $1000, and I'm fairly sure if she spends it by the statement where the annual fee is charged, and then the miles are tx'd to Delta before the due date, she can cancel the card and not have to pay the annual fee either.
I would not play those games with Amex.
Why ? Do you think it's dishonest or something, or just afraid it would backfire ?
meet the signup bonus, bank the miles, and cancel before the annual fee gets assessed
Not exactly before the fee gets assessed, but I think it's actually a federal regulation that if you choose to cancel a card without the statement cycle after the annual fee is assessed, you don't have to pay the annual fee. I know I've done this with the first Southwest card I got, and it wasn't even on purpose; I was happy to pay $69 for 50,000 miles. But I paid the bill which included the annual fee, received the miles, and then cancelled. A few weeks later I received a check refunding the annual fee to me, without even asking for it.
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Re: switching main credit card

Post by johnny847 »

RustyShackleford wrote:
2stepsbehind wrote:
RustyShackleford wrote:
johnny847 wrote:
RustyShackleford wrote: Maybe a SallieMae too, but not sure worth it to have another card just to save 3% extra (over the Citi 2%) on the small amount I spend on gas and grocs (GF buys grocs in lieu of rent, and I don't drive to office these days).
Perhaps your gf should consider getting the Sallie Mae :D
Dude, she is NOT into these credit-card games. It took a LOT of arm-twisting to get her to accept a Delta AMEX offer that gave her 60,000 miles as a signup bonus; yeah, there's a $195 annual fee, but she only has to spend $1000, and I'm fairly sure if she spends it by the statement where the annual fee is charged, and then the miles are tx'd to Delta before the due date, she can cancel the card and not have to pay the annual fee either.
I would not play those games with Amex.
Why ? Do you think it's dishonest or something, or just afraid it would backfire ?
meet the signup bonus, bank the miles, and cancel before the annual fee gets assessed
Not exactly before the fee gets assessed, but I think it's actually a federal regulation that if you choose to cancel a card without the statement cycle after the annual fee is assessed, you don't have to pay the annual fee. I know I've done this with the first Southwest card I got, and it wasn't even on purpose; I was happy to pay $69 for 50,000 miles. But I paid the bill which included the annual fee, received the miles, and then cancelled. A few weeks later I received a check refunding the annual fee to me, without even asking for it.
All the blogs I've read about churning credit cards have advocated to not consider cancelling the card until month ten. These companies offer these signup bonuses to get you to sign up for a card and actually use it - which if you cancel shortly after the signup bonus, its immediately obvious that was never your intention. The credit card company could decide to blacklist you for this. Will they, and are they even allowed to? I don't know. But for almost all cards, the signup bonus is more than worth the annual fee (as you state yourself). So really, if I were you, I wouldn't cancel so quickly. If you still think it's worth the risk, then go for it I suppose.
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Re: switching main credit card

Post by lhl12 »

If you spend a lot on your credit card each year and you'd rather have a Visa or MasterCard than Amex, you might consider the Fidelity Visa, which also give unlimited 2% cash back on all purchases with the exception of the first $15,000 of annual spending (which only earns 1.50% cash back). This differential of 0.50% on the first $15,000 of spending is equivalent to a $75 annual fee (for those who spend over $15,000 annually). I find it worthwhile to pay $75/year for the certainty of knowing that I never run the risk of someone not accepting Amex (while also having the convenience of having my rebate automatically deposited into my account each month with no manual intervention of any kind on my part).
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Re: switching main credit card

Post by johnny847 »

lhl12 wrote:If you spend a lot on your credit card each year and you'd rather have a Visa or MasterCard than Amex, you might consider the Fidelity Visa, which also give unlimited 2% cash back on all purchases with the exception of the first $15,000 of annual spending (which only earns 1.50% cash back). This differential of 0.50% on the first $15,000 of spending is equivalent to a $75 annual fee (for those who spend over $15,000 annually). I find it worthwhile to pay $75/year for the certainty of knowing that I never run the risk of someone not accepting Amex (while also having the convenience of having my rebate automatically deposited into my account each month with no manual intervention of any kind on my part).
But the Citi Double cash also gives 2% cash back, has no annual fee, and is a Mastercard. Unless merchants in your area for some reason accept Mastercards more often than Visas, I don't see how the Fidelity Visa is better.
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Re: switching main credit card

Post by 2stepsbehind »

johnny847 wrote:
RustyShackleford wrote:
2stepsbehind wrote:
RustyShackleford wrote:
johnny847 wrote: Perhaps your gf should consider getting the Sallie Mae :D
Dude, she is NOT into these credit-card games. It took a LOT of arm-twisting to get her to accept a Delta AMEX offer that gave her 60,000 miles as a signup bonus; yeah, there's a $195 annual fee, but she only has to spend $1000, and I'm fairly sure if she spends it by the statement where the annual fee is charged, and then the miles are tx'd to Delta before the due date, she can cancel the card and not have to pay the annual fee either.
I would not play those games with Amex.
Why ? Do you think it's dishonest or something, or just afraid it would backfire ?
meet the signup bonus, bank the miles, and cancel before the annual fee gets assessed
Not exactly before the fee gets assessed, but I think it's actually a federal regulation that if you choose to cancel a card without the statement cycle after the annual fee is assessed, you don't have to pay the annual fee. I know I've done this with the first Southwest card I got, and it wasn't even on purpose; I was happy to pay $69 for 50,000 miles. But I paid the bill which included the annual fee, received the miles, and then cancelled. A few weeks later I received a check refunding the annual fee to me, without even asking for it.
All the blogs I've read about churning credit cards have advocated to not consider cancelling the card until month ten. These companies offer these signup bonuses to get you to sign up for a card and actually use it - which if you cancel shortly after the signup bonus, its immediately obvious that was never your intention. The credit card company could decide to blacklist you for this. Will they, and are they even allowed to? I don't know. But for almost all cards, the signup bonus is more than worth the annual fee (as you state yourself). So really, if I were you, I wouldn't cancel so quickly. If you still think it's worth the risk, then go for it I suppose.
+1. A number of issuers have attempted to clawback miles if the card is closed within six months , but of course ymmv. In general I think the responsible churner would not want to draw attention to him/herself.
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Re: switching main credit card

Post by 2stepsbehind »

johnny847 wrote:
lhl12 wrote:If you spend a lot on your credit card each year and you'd rather have a Visa or MasterCard than Amex, you might consider the Fidelity Visa, which also give unlimited 2% cash back on all purchases with the exception of the first $15,000 of annual spending (which only earns 1.50% cash back). This differential of 0.50% on the first $15,000 of spending is equivalent to a $75 annual fee (for those who spend over $15,000 annually). I find it worthwhile to pay $75/year for the certainty of knowing that I never run the risk of someone not accepting Amex (while also having the convenience of having my rebate automatically deposited into my account each month with no manual intervention of any kind on my part).
But the Citi Double cash also gives 2% cash back, has no annual fee, and is a Mastercard. Unless merchants in your area for some reason accept Mastercards more often than Visas, I don't see how the Fidelity Visa is better.
Technically citi double cash is a 1.99% cashback card
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Re: switching main credit card

Post by johnny847 »

2stepsbehind wrote:
johnny847 wrote:
lhl12 wrote:If you spend a lot on your credit card each year and you'd rather have a Visa or MasterCard than Amex, you might consider the Fidelity Visa, which also give unlimited 2% cash back on all purchases with the exception of the first $15,000 of annual spending (which only earns 1.50% cash back). This differential of 0.50% on the first $15,000 of spending is equivalent to a $75 annual fee (for those who spend over $15,000 annually). I find it worthwhile to pay $75/year for the certainty of knowing that I never run the risk of someone not accepting Amex (while also having the convenience of having my rebate automatically deposited into my account each month with no manual intervention of any kind on my part).
But the Citi Double cash also gives 2% cash back, has no annual fee, and is a Mastercard. Unless merchants in your area for some reason accept Mastercards more often than Visas, I don't see how the Fidelity Visa is better.
Technically citi double cash is a 1.99% cashback card
Not if you get the cash back as a check.
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Re: switching main credit card

Post by lhl12 »

johnny847 wrote:
lhl12 wrote:If you spend a lot on your credit card each year and you'd rather have a Visa or MasterCard than Amex, you might consider the Fidelity Visa, which also give unlimited 2% cash back on all purchases with the exception of the first $15,000 of annual spending (which only earns 1.50% cash back). This differential of 0.50% on the first $15,000 of spending is equivalent to a $75 annual fee (for those who spend over $15,000 annually). I find it worthwhile to pay $75/year for the certainty of knowing that I never run the risk of someone not accepting Amex (while also having the convenience of having my rebate automatically deposited into my account each month with no manual intervention of any kind on my part).
But the Citi Double cash also gives 2% cash back, has no annual fee, and is a Mastercard. Unless merchants in your area for some reason accept Mastercards more often than Visas, I don't see how the Fidelity Visa is better.
Doesn't the Citi card require you to manually cash in your points each month? Again, it's worth $75/yr to me never to have to worry about or mess with that process.
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Re: switching main credit card

Post by johnny847 »

lhl12 wrote:
johnny847 wrote:
lhl12 wrote:If you spend a lot on your credit card each year and you'd rather have a Visa or MasterCard than Amex, you might consider the Fidelity Visa, which also give unlimited 2% cash back on all purchases with the exception of the first $15,000 of annual spending (which only earns 1.50% cash back). This differential of 0.50% on the first $15,000 of spending is equivalent to a $75 annual fee (for those who spend over $15,000 annually). I find it worthwhile to pay $75/year for the certainty of knowing that I never run the risk of someone not accepting Amex (while also having the convenience of having my rebate automatically deposited into my account each month with no manual intervention of any kind on my part).
But the Citi Double cash also gives 2% cash back, has no annual fee, and is a Mastercard. Unless merchants in your area for some reason accept Mastercards more often than Visas, I don't see how the Fidelity Visa is better.
Doesn't the Citi card require you to manually cash in your points each month? Again, it's worth $75/yr to me never to have to worry about or mess with that process.
From what I could tell from some searching, it appears that it has to be done manually. However, nobody gave a straight answer to the question when asked on forums.

It's really worth $75/year to you to not have to log into the Citi website once every couple months? (You must redeem in $25 increments). Honestly, how long can that take? Five minutes? Even if you did this every month, that's one hour. That's $75/hour. And this isn't a taxable "earnings" either. But sure, if you want to piss away $75 because you don't want to log into a website once a month, be my guest.
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Re: switching main credit card

Post by RustyShackleford »

A number of issuers have attempted to clawback miles if the card is closed within six months , but of course ymmv. In general I think the responsible churner would not want to draw attention to him/herself.
When I call to cancel the cards I've had thus far (one Southwest VISA, at least three Delta AMEXs), they ask why I'm canceling and I say "I just signed up to get the bonus". They always kind of chuckle; I'm sure the guy on the phone doesn't care - probably gets a kick out of my screwing the employer that probably treats him like crap - but perhaps he does have to report it. Anyhow, it hasn't kept me from re-upping yet. And it definitely ends the conversation quickly :D
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Re: switching main credit card

Post by 2stepsbehind »

RustyShackleford wrote:
A number of issuers have attempted to clawback miles if the card is closed within six months , but of course ymmv. In general I think the responsible churner would not want to draw attention to him/herself.
When I call to cancel the cards I've had thus far (one Southwest VISA, at least three Delta AMEXs), they ask why I'm canceling and I say "I just signed up to get the bonus". They always kind of chuckle; I'm sure the guy on the phone doesn't care - probably gets a kick out of my screwing the employer that probably treats him like crap - but perhaps he does have to report it. Anyhow, it hasn't kept me from re-upping yet. And it definitely ends the conversation quickly :D
Well now Amex has changed its policy so that you can only get one bonus per card per lifetime so clearly some issuers are taking note of that behavior. As for chase, if you've only done it once you might slip under the radar, but if they sense a pattern they are not shy in shutting down accounts.
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Re: switching main credit card

Post by RustyShackleford »

2stepsbehind wrote:As for chase, if you've only done it once you might slip under the radar, but if they sense a pattern they are not shy in shutting down accounts.
Ok, well then, I guess that answers my short-term question: should I cancel my new Southwest VISA as soon as I get my 50,000 bonus ? No. Those points are well worth the $99 annual fee. Plus, I'm not that sure it'd work again (that I'd get back my annual fee for a prompt cancellation).

Meanwhile, I just got approved for the Citi Double Cash card. I think it'll become my primary card.
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