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Are you just starting out with points and miles? Perhaps you have an old store credit card or two, but you're wanting to really maximize your rewards. It can be tempting to simply apply for the first card you see — or the one with the biggest bonus. But you may not get the best results this way. In this article, we'll discuss the best ways to plan a long-term credit card strategy.
Every card issuer has its own set of rules when it comes to credit cards, including how often you can apply for a card, the kind of credit score you'll need, and how many cards you're allowed to hold. This means you should be strategic when it comes to credit card applications to truly maximize both your bonuses and the points you'll earn later on. Let's take a look at building a long-term strategy for credit cards, the order in which you'll want to apply for cards, and any restrictions you need to be aware of.
- Creating the Perfect Credit Card Portfolio
- Starting With Chase
- Moving to Barclays
- Opening Cards With Capital One
- Beginning a U.S. Bank Relationship
- Applying for Citi Cards
- Acquiring American Express Cards
- Ending With Bank of America Cards
- How Long Will This Take?
- Earning More Points is Part of a Good Credit Card Strategy
- The Bottom Line on Credit Card Strategy
Creating the Perfect Credit Card Portfolio
There are a ton of different credit cards available to consumers. These range from cash-back cards, hotel credit cards, and airline credit cards to cards that earn flexible rewards currencies and more.
The ultimate goal of any credit card portfolio is to earn as many points as possible with your spending. If you're someone who spends a ton of money on groceries, you'll definitely want to keep a card like the American Express® Gold Card in your wallet. This card will give you 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X). This will help you really maximize your spending.
You'll also want to consider welcome offers for different credit cards. Card issuers offer these bonuses as a method of enticing you to sign up for the card. Sometimes, they offer increased bonuses, which is (obviously) the best time to hop on these cards.
Finally, be sure to give yourself enough time to earn all your welcome offers without creating additional stress on your finances.
Factors to consider when opening credit cards
When figuring out the portfolio you're going to keep, these are the factors you'll want to consider — in this order of importance:
- Card issuer: Some card issuers are more strict than others, so they'll need to be at the top of the list when opening new cards.
- Welcome offer: Sign-up bonuses are a great way to earn points quickly, but you'll want to be sure you're jumping on them at the right time.
- Annual fee: For how many years are you willing to pay the card's annual fee? When will it stop being worth it to you?
- Annual benefits: Do the benefits of the card add up? Does it offer statement credits or elite status that can offset the fee?
- Long-term earning: There's no reason to earn 1x point per dollar spent on anything, ever. Keep the right cards in rotation to make sure you're not missing out on your points.
Note that once you open a credit card, it doesn't mean you have to hold it forever. Some banks will allow you to close your card, wait a while, then reapply to earn the bonus all over again.
Others only allow you to earn a bonus on a card once per lifetime. Or they may require that you haven't received a bonus within the last 48 months to be eligible for another. Make sure you understand these rules before opening or closing any cards.
Understanding banks' application rules
You're probably familiar with the biggest names in credit card issuers. These include American Express, Chase, Capital One, Citibank, Barclays, and U.S. Bank, among others. In the good old days, card issuers didn't place limits on how many cards you could hold or how often you could acquire a new card.
Unfortunately, those days are long gone. Issuers have wised up to people who got welcome bonuses and then disappeared, now placing restrictions on acquiring cards. Chase, for example, is one of the most notorious, due to its 5/24 rule. This rule dictates when you're allowed to open a new Chase card: If you've opened five or more credit cards within the last 24 months — with any bank — Chase will automatically deny your application.
You can see how quickly things can get thorny. Let's break down a chronological strategy for getting the best credit cards with the greatest chance of success.
Starting With Chase
Chase is a unique beast when it comes to the world of credit cards. This is because it perfectly combines the most lucrative cards with the strictest restrictions around. As we mentioned above, 5/24 dictates whether or not you're eligible to open a new card from Chase.
Hopefully, you've started this journey at 0/24, so you can hop right in with some of Chase's best cards. These include:
- Chase Sapphire Reserve®: This is a high-end travel credit card that'll give you $300 per year in travel credits. It also offers 3x Ultimate Rewards on all travel purchases, making it one of the best general-use travel credit cards out there, and provides Priority Pass lounge access. Its annual fee is $550.
- Chase Sapphire Preferred® Card: If you can't stomach the annual fee of the Reserve, the Sapphire Preferred can be a good alternative. With just a $95 annual fee, you'll receive a $50 annual hotel credit as well as 3x Chase points on restaurants, online groceries, and select streaming services.
These two cards both earn Chase points, which can be transferred to its 14 hotel and airline partners. Known as “transferable points” for the ability to move these points to your desired redemption option, these types of points will be the building block of your credit card rewards strategy.
However, Chase also has a number of co-branded credit cards, all of which are also subject to 5/24. The cards you'll want to apply for will depend on the type of travel you do.
If you're a frequent Hyatt guest, The World of Hyatt Credit Card may be a good option. If you often find yourself flying United, one of the handful of United cards on offer may be a good fit.
Chase also has small business credit cards, so if you have a small business you'll want to consider these. As an aside, some small business credit cards offered by other issuers (such as American Express) don't show up on your credit report and thus don't count toward 5/24.
In summary: You should pick out the five best Chase credit cards for your travel goals before you apply for any cards from any other issuers.
Moving to Barclays
Are you familiar with Barclays Bank? Although it may be more popular abroad than in the U.S., it still holds a handful of lucrative credit cards.
Barclays is nearly as sensitive as Chase when it comes to opening new cards. However, it applies the 6/24 rule, which gives you a little extra leeway when getting a card. You'll find co-branded Barclays credit cards from the likes of JetBlue, Emirates, Frontier, and even Holland America.
However, there are two standout options available to you when it comes to Barclays cards:
- AAdvantage® Aviator® Red World Elite Mastercard®: This card gives you perks while flying on American Airlines, such as a free checked bag and priority boarding. However, its best attribute is the fact that you'll earn its welcome offer of 50,000 bonus miles after making your first purchase and paying the annual fee in full, both within the first 90 days. This is in direct contrast to most other offers, which usually require you to spend thousands of dollars to earn your bonus.
- Wyndham Rewards® Earner℠ Business Card: This card has some excellent multipliers, such as 8x Wyndham points on gas and at Wyndham hotels, but its best feature is that it offers complimentary Wyndham Diamond elite status. Thanks to a partnership with Caesars Rewards, you'll also be able to get Caesars Diamond status simply by holding this card, which will entitle you to waived resort fees and complimentary valet parking at its hotels in Las Vegas and Atlantic City, among others.
Opening Cards With Capital One
Unlike Chase and Barclays, Capital One doesn't have any limits regarding credit cards from other card issuers. This means that you'll want to move here once you've finished with Chase and Barclays.
However, Capital One does have restrictions on the number of its cards you can have simultaneously. You can get one card every six months with a total cap of two credit cards. It'll take you a year to get both Capital One credit cards for which you're eligible and you'll want to make your selections wisely.
For those looking to earn the most with their everyday spending (which doesn't fall into bonus categories on other cards), the Capital One Venture X Rewards Credit Card is a good option. This is the premium version of the Capital One Venture Rewards Credit Card and offers an annual $300 travel credit, a 10,000-mile anniversary bonus, up to 10x miles on travel, and 2x miles on all other purchases, plus lounge access and four free authorized users — all for a $395 annual fee.
Beginning a U.S. Bank Relationship
U.S. Bank is so, so, fickle when it comes to approving you for its best travel rewards credit card, the U.S. Bank Altitude™ Reserve Visa Infinite® Card. The points that it earns are worth 1.25 cents each, and it gives you up to $325 in annual statement credits. In addition, you earn 3x points on mobile wallet spend (such as Google Pay or Apple Pay).
You won't be approved for this card without a relationship with U.S. Bank, so your next move is to create one. Open a checking or savings account and ensure that you have regular activity here. Depositing your paycheck here twice a month could be a good idea. After that, cross your fingers and hope that you're approved. If not, keep working on the relationship and try again at a later date.
And while U.S. Bank only approves its own customers for its premium credit card, experience shows that your approval odds for other U.S. Bank credit cards are much higher if you have a bank account here.
Applying for Citi Cards
Citi is another issuer whose card options include the ability to earn flexible point currencies. Cards such as the Citi Premier® Card earn ThankYou Points, which can be converted to 18 hotel and airline partners.
Citi also offers co-branded credit cards, including a handful of American Airlines cards. These offer similar perks to the Barclays card, but its most expensive card, the Citi® / AAdvantage® Executive World Elite Mastercard®, also includes American Airlines Admirals Club access as part of its annual fee.
Citi has a few rules when it comes to opening new cards:
- You can apply for one card every eight days.
- You can't open more than two cards every 65 days.
- Those applying for a business credit card can open one every 95 days.
Acquiring American Express Cards
American Express is probably one of the most well-known issuers here, thanks to its reputation for high-end cards. However, although it absolutely offers premium cards with expensive annual fees, it also has more affordable options.
American Express-branded cards can be some of the best around since they earn Membership Rewards. These, like other bank rewards programs, can be transfered to 21 hotel and airline partners. The aforementioned Amex Gold is good for this, as is The Platinum Card® from American Express, which earns 5X points on flights booked directly with airlines or with American Express Travel (on up to $500,000 on these purchases per calendar year) and 5X points on prepaid hotels booked on amextravel.com.
While earning Amex's own points is a cornerstone of your credit card strategy, its co-branded credit card offerings are strong also. These include options from Hilton, Marriott, and Delta, so you'll want to do the research to figure out which ones fit your needs.
Amex isn't nearly as strict as Chase and some other issuers. You can have a maximum of five different credit cards at one time, plus you can have up to 10 cards with no preset spending limit.
Amex will approve you for one credit card every five days and no more than two cards every 90 days. These limits don't apply to their cards without preset spending limits. However, Amex also has a “once per lifetime” rule on its credit cards, so you'll want to time your applications for cards when their bonuses are as high as possible.
Ending With Bank of America Cards
The last in our line is Bank of America. Like Chase, Bank of America has a 24-month rule for waiting periods after closing a credit card and then applying for it again in the future if you want to earn the welcome bonus again later (which some issuers don't allow at all).
Additionally, Bank of America has something called the 2/3/4 rule, which breaks down like this:
- You can only open two new cards in a two-month span.
- No more than three new cards in a year.
- A maximum of four new cards every two years.
Additionally, Bank of America looks at how many cards you've recently opened with other issuers. Whether you'll be approved for one of its credit cards can vary, based on whether you have Bank of America banking accounts. Rules are more lenient for those with a checking or savings account here, so a good strategy is opening a checking account here to gain access to additional credit card perks.
Bank of America doesn't have the greatest selection of credit cards, but both the Bank of America® Premium Rewards® credit card and the Alaska Airlines Visa® credit card are worth a look. The latter is one of the best and easiest ways to earn Alaska Airlines miles.
How Long Will This Take?
How quickly you move is up to you. But this article is about long-term strategy, rather than blitzing through credit card sign-up bonuses. Would it be great to have a million points on hand in six months? Sure, but it's neither smart nor strategic to do so.
Creating the perfect portfolio is going to take time and a lot of research. You'll want to figure out how much spending you can place on a credit card each month, how you're going to use these credit cards, where you tend to spend the most, and how much money you're willing to spend on annual fees.
Here's a general guide for this breakdown: Most card issuers require that you meet a minimum spending goal within three months or 90 days of card opening. This means you'll want to plan for at least three months between opening any new cards — and sometimes more, depending on your card issuer.
This means it'll take you a few years to make it through opening your new credit cards (and maybe more, if you tend to open and close cards). But there's never really an end to tweaking the cards in your wallet. New cards are launched, banks change the earning rates on existing cards, and your lifestyle will evolve.
Earning More Points is Part of a Good Credit Card Strategy
Once you've got your credit card lineup working like a well-oiled machine, you may be wondering how else to bump up your earnings. Here are some options to consider.
- Register for increased bonus point offers such as Chase Offers.
- Refer others to receive referral bonuses.
- Transfer points during promotions.
- Use shopping portals to stack earnings when shopping online.
- Strategically buy additional miles using the right credit cards.
- Look for targeted offers to upgrade your credit card to another one, typically with an offer of bonus points.
- Before closing a credit card, see if the issuer will provide a retention offer to change your mind.
- Use the best credit card in your wallet for each purchase.
The Bottom Line on Credit Card Strategy
When you open a new credit card, it can be an exhilarating experience. This is especially true once those bonus points hit your account. But earning a welcome offer isn't the end of the line. Instead, you'll want to create a rotating handful of cards that'll earn you the most points on your purchases. You'll also want to do the math for any other cards you hold to see if the benefits they provide outweigh the annual fee.
Finally, even if you've got everything down pat, there's still more to do. Wring every last ounce of value from your cards with shopping portals, bonus points / bonus cash-back offers from your card issuer, and more so that you'll always be getting the best value from the money you spend.
What are your best tips for building a long-term credit card strategy? Anything that you think we're missing?
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