topic Re: Teach me about churning? in Credit Cards

Teach me about SUB chasing?

Azza — Thu, 03 Sep 2020 17:59:19 GMT

Hey everyone.

I actually discovered MyFico from the r/churning subreddit a few years ago. Since then I've had a lot of fun playing the credit game and min-maxing what I can out of what I have.

Well, now that my credit and finances are in good repair, I am starting to receive pre-approvals and pre-screened offers that seem pretty great. Earlier last month I received the Alaska Airlines Mileage Plus with big bonus, and in my mail today I just received Chase Freedom Unlimited $200 cash back on $500 spend and 5% groceries offer (the card in my sig is an authorized user of my wife's account, her Chase Freedom Flex or whatever it's about to be called.)

So... that's a pretty stellar offer at 40% cash back. I like the groceries thing, but I have Cash Card with 10% off groceries—and it's a debit card I can use at WinCo—so I don't want to be tempted.

The thing is, my AAoA is 5.1 years and my AoOA is 13.5 years. So on the one hand, I'm probably okay, but I feel like I'd be undermining myself by getting cards, using their bonus periods then canceling them. Or is this just how people start collecting credit cards?

Please teach me about sub chasing and getting great bonuses. I would like to receive offers that are beneficial to me, but at the same time I don't want to get a bunch of cards closed on me for lack of utilization and stuff. Thanks a lot, you guys are so great

Re: Teach me about churning?

coldfusion — Thu, 03 Sep 2020 17:49:25 GMT

This is a sensitive topic because it could easily fall off the rails and devolve into subjects that violate MF's TOS. One specific area to completely avoid is anything involving manufactured spend - don't ever broach that subject here.

The classic correct description of churning is when you open a card, put just enough spend to meet the SUB, close the card, and then later reapply for that same card in order to collect another SUB. The major issuers all got burned by this practice which drove all the different policies like the AMEX lifetime, Chase Sapphire 48 month, and Citi 24/48 month restrictions on collecting bonuses as well as acquiring black marks with issuers for closing cards held less than 12 months.

What you're talking about is more correctly known as SUB chasing or bonus chasing. How effectively you can do that legitimately depends on the strength of your profile as well as your ability to meet sign-up bonuses with organic spend.

That's about as far as I'm even remotely comfortable with going on the subject given the sensitivity of the topic. There are other sites that delve into this topic in more detail where there are fewer TOS considerations.

Re: Teach me about churning?

BmoreBull — Thu, 03 Sep 2020 17:54:39 GMT

I don't think churning is a really popular topic around here. Actually I think it's frowned upon.

Re: Teach me about churning?

Azza — Thu, 03 Sep 2020 17:57:55 GMT

@coldfusion wrote:

What you're talking about is more correctly known as SUB chasing or bonus chasing. How effectively you can do that legitimately depends on the strength of your profile as well as your ability to meet sign-up bonuses with organic spend.

That's about as far as I'm even remotely comfortable with going on the subject given the sensitivity of the topic. There are other sites that delve into this topic in more detail where there are fewer TOS considerations.

I want to be clear, I am not interested in MS. I am interested in organic purchasing, using my cards for good purposes (like I said, I do my shopping for groceries mostly at WinCo, so I wouldn't go do MS over at Safeway or something to satisfy the bonus.)

Teach me about sub chasing then? Opening/closing/keeping cards and what not. How do you guys do it, what are the ramifications of having so many cards? When to close? When to do certain credit-keeping tasks, etc.

Yeah, not trying to break rules here. Sorry if my vernacular was incorrect!

Re: Teach me about churning?

randomguy1 — Thu, 03 Sep 2020 19:38:21 GMT

@BmoreBull wrote:
I don't think churning is a really popular topic around here. Actually I think it's frowned upon.

I'm not sure if it's front upon, we should be relatively judgement free around here. I think MFicoers just tend to be more risk adverse and believe in slow and study. Keep in mind, there are senior members with 20+ cards however they mostly have thick, aged profiles. Nothing wrong with a little (or a lot) of SUB chasing IMO!

Re: Teach me about churning?

M_Smart007 — Thu, 03 Sep 2020 19:56:35 GMT

@randomguy1 wrote:
@BmoreBull wrote:
I don't think churning is a really popular topic around here. Actually I think it's frowned upon.
I'm not sure if it's front upon, we should be relatively judgement free around here. I think MFicoers just tend to be more risk adverse and believe in slow and study. Keep in mind, there are senior members with 20+ cards however they mostly have thick, aged profiles. Nothing wrong with a little (or a lot) of SUB chasing IMO!

@randomguy1, I read that really fast and thought ...Hmmmm? .. Talking about Me?

Good thing I don't drive a SUBaru

I mean, SUB's are nice .. have done fairly well, but I don't recommend "churning and burning"

Re: Teach me about churning?

SecretAzure — Thu, 03 Sep 2020 20:31:59 GMT

This is not my game but people here seem to be pretty pragmatic about the whole thing. It is not a good idea to open cards just for subs and then close them, especially not en masse. That could have damaging repurcussions that extend over time. Your AAOA will drop and drop until you are getting approvals with $300 SL's. You accrue hard points and are put into a "New Account" bucket. Your scores will drop for a while (and keep dropping if you don't let those accounts age).

People often do them in sprees, apply for X amount of cards and then garden on those for at least 6 months before applying again. Many here keep these cards until they no longer serve a purpose. That purpose could be padding utilization, points, CB, financing options, or just a plain backup for their wallets.

I believe in only applying for what I feel will be of value to me. But to each their own. Good luck!

Re: Teach me about churning?

kdm31091 — Thu, 03 Sep 2020 20:48:02 GMT

Regardless of one's feelings on whether you should SUB chase or not, the fact is most major issuers have cracked down a lot on it. Citi only allows one Thank You point bonus per 24 months, Amex is one bonus per product in a lifetime, Chase has several restrictions on bonuses plus the 5/24 policy, even BoA has cracked down...you get the idea. It's not as simple as it was in the past to get multiple approvals/bonuses in a short timeframe.

Your best bet, both for your credit health and so that you don't trip up any algorithims within issuers, is a slower, steadier approach.

Re: Teach me about SUB chasing?

SouthJamaica — Thu, 03 Sep 2020 21:23:35 GMT

@Azza wrote:
Hey everyone.

I actually discovered MyFico from the r/churning subreddit a few years ago. Since then I've had a lot of fun playing the credit game and min-maxing what I can out of what I have.

Well, now that my credit and finances are in good repair, I am starting to receive pre-approvals and pre-screened offers that seem pretty great. Earlier last month I received the Alaska Airlines Mileage Plus with big bonus, and in my mail today I just received Chase Freedom Unlimited $200 cash back on $500 spend and 5% groceries offer (the card in my sig is an authorized user of my wife's account, her Chase Freedom Flex or whatever it's about to be called.)

So... that's a pretty stellar offer at 40% cash back. I like the groceries thing, but I have Cash Card with 10% off groceries—and it's a debit card I can use at WinCo—so I don't want to be tempted.

The thing is, my AAoA is 5.1 years and my AoOA is 13.5 years. So on the one hand, I'm probably okay, but I feel like I'd be undermining myself by getting cards, using their bonus periods then canceling them. Or is this just how people start collecting credit cards?

Please teach me about sub chasing and getting great bonuses. I would like to receive offers that are beneficial to me, but at the same time I don't want to get a bunch of cards closed on me for lack of utilization and stuff. Thanks a lot, you guys are so great

IMHO you should only apply for cards that you will find useful over the long term.

Re: Teach me about churning?

red259 — Thu, 03 Sep 2020 21:27:34 GMT

The days of going on large app sprees are well behind us. For years I have been heavily invested in the credit card reward scene when it comes to travel. I have obtained a massive amount of value out of credit card awards.

A couple of things to note:

1. You need to be in a solid financial position to even do this. If you don't have significant spend then you aren't going to get many SUBs. I don't MS and I wouldn't want to be one of the people who rely on that method in the current economic climate.

2. You need to have goals. Yes a 100,000 point offer sounds great, but if there is nothing worthwhile that you want to spend those points on then its a terrible offer. You need to figure out what your goal(s) is/are first and then figure out how to work towards them, which leads us to....

3. Know the different travel partner programs. Understand where the sweet spots are in each program and how that fits in with your goals. You also have to stay on top of all developments. Right now things are rather turbulent and there can be devaluations etc. I honestly wouldn't be suggesting to people to try to get into the travel game at this point. Too many changes happening and its easy for the rug to be pulled out from under people before they can even book an award redemption.

4. Know the different credit card programs. You have to know all the rules of the different lenders. What are the SUB rules, how long until the bonus clock resets, does the entire family of cards share the same lockout, which lenders have rules like 5/24 or are inq sensitive, or only do once in a lifetime bonus on card, which lenders may take AA if they see aggressive credit seeking, which lenders may penalize you on future applications if you don't use their cards. I usually know what my plan is for credit card applications a year in advance and have a decent idea of what I will likely do in the following year as well. Beyond SUBs you should also look at synergy between cards and the perks cards bring and how it can all be leveraged. There is no reason why you can't keep building up point balances while you are in the garden.

5. Think about what you will do with cards in the future. It is silly to close a card immediately after getting the bonus. Lenders crack down on that and some have even clawbacked the bonus. Is the card worth keeping beyond the first year? Is there a No AF card that you can PC to? Do you need to reduce your credit limits to help get future approvals?

This is just some food for thought. Don't rush out and apply for whatever card you see. People who do that end up losing money in the end. Once you know which cards you want to go after and have prioritized them then you should check the SUB history for those cards to see if the current SUB is worth pulling the trigger on or if its better to hold out for a higher offer. High end cards probably are not going to be worthwhile for another year with travel in its current state.

Re: Teach me about churning?

sxa001 — Thu, 03 Sep 2020 21:45:35 GMT

This is a topic that is of some interest to me. My last "Spree" was in 2016, since then I have been pretty selective about my cards. In the past year through work travel I was able to meet SUBs with little effort (and did receive pretty good ones in my Citi AA, Delta AMEX, CSP, and Marriot). I would never do MS, just isn't for me and that is all I will say on that one.

I opened two cards in 2017, one card in 2018 and one card in 2019. I have not opened any cards or accounts this year but hopefully will have a new Mortgage before the year is over. My point is I have really cooled it, but still have way more cards than the every day Joe. Where this topic is of interest to me is that now that I am under 5/24, after I get my mortgage and give 3-6 months for my scores to recover a little bit I may wish to start opening up accounts again. While I haven't been getting as many offers I used to get, I used to get some pretty nice ones in the mail from AMEX. So I do wonder if once I get into the mid 800's across the board how big a deal it would be to get a card or two each yeah, leave them open for a year or two and then maybe close one or two that I am not using (leaving my oldest cards open of course). This probably isn't in the same league as those serious about SUB chasing but I could see advantages to taking advantage of some bonuses that pop up if I coordinate around times when I will have the spend organically but I can't see myself having a bunch of cards with large AF's (like having both a platinum and a gold AMEX at the same time as my spend isn't going to make up for the $800 in AF's).

Re: Teach me about churning?

randomguy1 — Thu, 03 Sep 2020 21:50:58 GMT

@M_Smart007 wrote:
@randomguy1 wrote:
@BmoreBull wrote:
I don't think churning is a really popular topic around here. Actually I think it's frowned upon.
I'm not sure if it's front upon, we should be relatively judgement free around here. I think MFicoers just tend to be more risk adverse and believe in slow and study. Keep in mind, there are senior members with 20+ cards however they mostly have thick, aged profiles. Nothing wrong with a little (or a lot) of SUB chasing IMO!
@randomguy1, I read that really fast and thought ...Hmmmm? .. Talking about Me?
Good thing I don't drive a SUBaru
I mean, SUB's are nice .. have done fairly well, but I don't recommend "churning and burning"

You or K maybe

Re: Teach me about churning?

Anonymous — Thu, 03 Sep 2020 23:02:37 GMT

I would define "safe" SUB chasing as, relatively infrequently, if you spot a card with a big SUB with a spend that you can meet, you go for it even if the card has no real long term use for you. (And as pointed out by others, the SUB must be in a form you can easily use!). If it is from an issuer you have no other interest in, even better. You then keep the card open for at least a year to avoid flagged.

In the past (and some still do) people would be more aggressive about going after any SUB, $200 here, $150 there etc. Now issuers have clamped down and even when there are no official policies the risks can be too great.

But, LTLs equation still holds true: MS > SUB > rewards on spend. So a good SUB is going to be more profitable than organic spend even on a high yielding card. e.g. a fairly modest $200 sub would take more than $6600 spend to beat on a 3% card and $10K on a 2%

So the temptation is there. And so are the risks!

Re: Teach me about SUB chasing?

AverageJoesCredit — Thu, 03 Sep 2020 23:16:29 GMT

Step one :

Hold up 5 fingers and sing the SUB way anthem🎵

Step two Buy your SUB and use the app for discount

Step three:

Pay with a Chase card

SUB CHASING🤑

Re: Teach me about SUB chasing?

Azza — Fri, 04 Sep 2020 03:46:54 GMT

Great advice and suggestions in this thread.

Yeah, I'm not really sure if I want/need to sub chase or churn right now. Citi Costco covers almost all of my spending, and for everything else there's Alliant (not MasterCard lulz).

I can see a function out of the Freedom, with the grocery bonus that is a very sore hole for me since Amex keeps declining me, but is it short-sighted of me to use a card for a year then basically bail out on it?

I made $170 with my Discover IT cashback bonus. Felt pretty good; was utilizing categories and spent on it like it was a 2% card. But now I just use it for categories (which are actually very good) then when I max one I stop using it again. I was also spending less last year than I am now.

So yeah. As some of you said, it's a different situation for everyone. $200 doesn't seem like an awesome bonus, so I wonder if I hold out can I find that $500-1000 cash back offer free and clear?

*Ponderous*

Re: Teach me about SUB chasing?

NRB525 — Fri, 04 Sep 2020 11:17:14 GMT

In cards that earn cash back as their reward system, with no annual fee, expect to be in the $200-$500 zone.

The larger apparent bonuses are on travel cards that charge an annual fee. But then there's the AF to pay, and to use the rewards best one should travel. That last step is problematic these days.

Any idea why AMEX keeps declining you?

Re: Teach me about SUB chasing?

Azza — Fri, 04 Sep 2020 16:50:58 GMT

@NRB525 wrote:
In cards that earn cash back as their reward system, with no annual fee, expect to be in the $200-$500 zone.

The larger apparent bonuses are on travel cards that charge an annual fee. But then there's the AF to pay, and to use the rewards best one should travel. That last step is problematic these days.

Any idea why AMEX keeps declining you?

No idea. My first app with them I was at 680 with no utilization, second was at 780 with some utilization and the third was at 760.

I'd have to look at the reasons for sure, but they seem to love their fico codes for saying no

Edit: went back and took a look, their most recent one (fico 777) said too many inquiries recently, too many accounts reporting balances, ratio of highest loan to account balances too low (mortgage?) Bleh.

Honestly I can garden for a while. No great products out right now they I don't already have coverage for.

Re: Teach me about churning?

iced — Fri, 04 Sep 2020 18:01:37 GMT

@Anonymous wrote:

But, LTLs equation still holds true: MS > SUB > rewards on spend. So a good SUB is going to be more profitable than organic spend even on a high yielding card. e.g. a fairly modest $200 sub would take more than $6600 spend to beat on a 3% card and $10K on a 2%

In a cash-back only world or a world where one only values points by some arbitrary amount such as that TPG weirdo, I would have a hard time arguing this point. But, in a more realistic travel world, there's very little SUB chasing one can do without getting diluted across ecosystems, which in turn dilutes their value.

If I have a steady stream of use for UR but not MR, throwing organic spend toward the FU and CSR is going to go further for me than chasing random Citi or American Express promotions. Sure, the TPD..er, G is telling me they're all valuable, but at the end of the day I'd rather have 1 million UR than 333k each of UR, MR, and TY because I already have things I can do with UR. With the other two, I'm either having to wait out multiple SUBs to attain enough to cash in or cashing them in at a diluted return for something inferior to what I wanted.

SUB chasing to me is like a slightly less obnoxious form of extreme couponing. Sure, your numbers say you're coming out way ahead, but it's not often mentioned that you're in a constant state of settling or compromising with whatever you can get on deep discount that particular day. You're going to be stuck with things you might otherwise have not gotten, you're going to settle for brands that were on sale rather than brands you prefer, or you're going to be funneling things through 3+ channels to convert them into something you can use.

Again, if your only goal is cash-back, it's a different story. $100 is $100, even if it's only $100.

Re: Teach me about churning?

K-in-Boston — Fri, 04 Sep 2020 20:07:55 GMT

As long as your profile and finances can support it, no problems with opening new accounts here and there. As others have mentioned, heydays like opening 6 AA cards or multiple BoA Better Balance Rewards cards every year are long gone, and you need to be cognizant of what you currently have and how current and potential lenders will view your antics. Barclaycard is notorious for AA (I'm not talking about the airline cards anymore) after a number of new accounts have been opened. Amex isn't a lender I would personally ever close a card prior to at least the 2 year mark with.

The point dilution comment iced made is certainly one to consider. I personally dabble in MRs, URs, TYPs, SkyMiles, Marriott points, and US Bank AR points. Some I have 300k point balances on, others much less. I tend to be more of an earn and burn person. I know what I expect to get from each program (and they all serve my Delta/Marriott needs in some form or another) and I have enough organic spend to accrue a meaningful amount of points (this has been $10k or more in rewards earned annually for the past 4 years). I am not so much the private suite on an Emirates flight or a week in the Maldives kind of redeemer. Knowing that once my miles earnings are factored in that I'm earning more than 2 cents per point on most programs is fine for me on a domestic flight. 5 nights in a Marriott or a weekend getaway in a Ritz-Carlton at 2-3 cpp are also just fine.

But if one cannot be selective about when and where to redeem their points, or they are focused on cash back, travel cards with huge SUBs may not be the best idea.

Re: Teach me about SUB chasing?

recoveringfrombk7 — Fri, 04 Sep 2020 23:03:11 GMT

@Azza wrote:
Great advice and suggestions in this thread.

Yeah, I'm not really sure if I want/need to sub chase or churn right now. Citi Costco covers almost all of my spending, and for everything else there's Alliant (not MasterCard lulz).

I can see a function out of the Freedom, with the grocery bonus that is a very sore hole for me since Amex keeps declining me, but is it short-sighted of me to use a card for a year then basically bail out on it?

I made $170 with my Discover IT cashback bonus. Felt pretty good; was utilizing categories and spent on it like it was a 2% card. But now I just use it for categories (which are actually very good) then when I max one I stop using it again. I was also spending less last year than I am now.

So yeah. As some of you said, it's a different situation for everyone. $200 doesn't seem like an awesome bonus, so I wonder if I hold out can I find that $500-1000 cash back offer free and clear?

*Ponderous*

If you're bored and not bothered by a potential 4506t request, you could always do a 2nd Discover card.