As I’ve become more engrossed in the points and miles game, I’ve realized I made some pretty silly mistakes when starting out. Some of them had to do with not doing enough research while others were a result of poor planning. Here are 5 credit card churning mistakes and how to avoid them.
1. Not prioritizing Chase credit cards while under 5/24
If you’re new to credit card churning, the first thing you should know is that Chase cards have some of the best sign-up bonuses. You need to open Chase cards first since you will not be approved if you have opened five or more credit cards in the past 24 months (more on the 5/24 rule here).
The first card I opened was the Capital One Venture card. I wasn’t seriously considering churning at this point, but when I changed my mind a few months later, I was already 1/24 instead of 0/24. Even if you aren’t sure if you will open more credit cards for the rewards in the future, it still makes sense to start with Chase 5/24 cards just in case you choose to pursue this full time.
2. Not taking advantage of the best sign-up bonuses
Sometimes the best sign-up offer is available through dummy booking or a referral link. When I signed up for the Hyatt credit card from Chase, I went with the public offer and missed out on the $50 statement credit available through dummy booking. I almost made an even more tragic mistake with the Gold Delta SkyMiles credit card from American Express. I was planning on signing up for the 30,000 mile offer but luckily was able to find a targeted 50,000 mile offer right before applying. This would have been a big mistake since you can only get the bonus on American Express cards once!
Look around for the best offer before signing up for a credit card. Whether it’s a higher point offer or an added statement credit, it’s usually worth it to do a little digging. I also keep a list of the best offers here.
3. Missing out on authorized user sign-up bonus points
On my first few cards from Chase, I saw that you could get additional bonus points for adding an authorized user. Since I had no one to add to my card, I dismissed this and moved on. Since Chase doesn’t require a social security number to add an authorized user, you can simply add a nickname or a pet’s name to get your bonus points. I should note that this is not the case with other card issuers like American Express. Since being an authorized user counts against your 5/24 status, don’t let other people add you as an authorized user.
I made this mistake with both the Hyatt credit card and Chase Sapphire Preferred. I’m still kicking myself for these two!
4. Failing to recognize rules besides Chase’s 5/24
Last fall, I was on a roll with my credit card applications. I hastily applied for the Citi Hilton Honors credit card (no longer available) despite opening Chase Sapphire Preferred, Chase Sapphire Reserve, Chase Freedom, and the Amex Gold Delta card in the past three months. While there’s no official rule, Citi is known to be inquiry sensitive. I should have cooled off a bit before applying for a Citi card especially since I had no prior history with them. Unsurprisingly, I was denied.
I hate wasting a hard pull, but I learned the importance of having a strategy when applying for credit cards.
5. Being scared to sign-up for business credit cards
You don’t necessarily need to have a functioning business to sign up for a business card. Some activities like selling on eBay or Amazon actually count as a business. While you may not have started a business venture yet, it’s smart to open a business card to separate expenses. Given that it’s so easy to justify why you need a small business card, there’s no reason you can’t be reaping the benefits of these sign-up bonuses, too! Even better, these credit cards are not reported to your personal credit report (i.e., Chase can’t see them).
Had I known this earlier, I would have taken advantage of small business credit card offers to keep myself under 5/24 longer. One of the cards I really missed out on because of this is the Chase Ink Plus (no longer available). The thing about the Chase Ink cards is that getting them won’t impact your 5/24 status, but you can only get them if you are under 5/24. I could have pocketed another 60,000 Chase Ultimate Rewards points and earned 5x points in categories like office supply purchases with Chase Ink Plus.
There are a zillion mistakes you can make when signing up for credit cards, but if you are able to meet your travel goals, it doesn’t really matter how you get there. This is a learning process. As long as you know how to avoid these pitfalls in the future, making mistakes is just part of the game.