@IcyCool7227 wrote:I have an idea for a credit card signup bonus. A lot of cards offer them but why only in like the first 6 months of spending? I think if a card let you choose when you wanted to start earning the bonus - say 3 months or 6 months after you get approved that would be more conv. Maybe people would just want to start out not purchasing so much and get an idea of how much they'd like to spend. In my situation it'd be conv. for me so I wouldn't have to worry about it for awhile but still getting the rewards. Do you think this would be a good idea? Like after approval you would get the option to choose when you'd like that bonus period one time and then it's set in stone.
IMO, it defeats the whole purpose of the SUB for the lender. The SUB isn't there for you to just sign up for the card. The lender wants you to be excited about your new card and use it regularly to meet the SUB. Then, they hope you're "conditioned" to continue to reach for it after the SUB period. They want to be your new daily driver. For most "regular" consumers, unlike those of us on My FICO who have a lot of cards and options, they may continue to use that card purely out of habit. If it didn't work, I don't think SUBs wouldn't be so common as lenders would be losing a lot of money if all applicants were like many of us on the forums.
That option already exists to a degree. It's called delaying your application until you're ready to spend for the SUB.
@IcyCool7227 wrote:Well that sure was a lot of info to process! What do you mean when you are talking about P1 and P2? I also already have two spreadsheets on my PC to keep up with every transaction and overall budget. Adding SUB is as easy as putting it next to the credit card balance of how much I've spent so far. The card spree I was applying for - I didn't care so much about the bonuses but was looking at my long term reward spending. That 5/24 limit - are you talking about inquiries or new accounts? Only Chase has a 5/24 account limit. And unless I'm making huge amounts of money which I'm not yet, I couldn't see doing SUBs all the time.
@IcyCool7227, the P1 and P2 reference is "Player 1" and "Player 2" meaning two related people (usually spouses or partners) both applying in synchronization for SUBs from which they can mutually benefit, most typically for travel together.
The above posting was a complex explanation of churning SUBs as a primary credit card strategy. This strategy isn't for every type of credit profile on My FICO forums as I've advised members in other threads. Sure, most everyone can take advantage of the occasional SUB but churning them multiple times a year is best reserved for moderately developed to advanced credit profiles with enough assets to ensure they won't need to access their credit for financing in the near future, including for a mortgage or auto loan. The heavy hits on a profile are much more punitive and risky for a young, thin file than for an older developed file. With a FICO in the high 700's to the 800's, decades of credit history, and a strong net worth, churning can be a good way to leverage your past credit success into a positive cash flow. But again, it's not for everyone and I don't advocate it universally for our members without a discussion of these variables.
Before beginning such a strategy, a consumer needs to not only have that credit file development but to have an understanding of how hard inquiries, new accounts, and decreasing Average Age of Accounts (AAoA) may impact their FICO and ability to borrow in the future. Likewise, a thin file won't be able to do this very long before they start to run into wasted hard pulls for denials or low starting limits. Applying for many cards which one doesn't intend to keep will slowly lower AAoA, which is especially risky if there aren't some well-seasoned accounts on the profile (9+ years) to hold up the average. If there will be a need for borrowing (especially on a mortgage), new credit applications should be suspended for 12-24 months prior to the mortgage application to allow FICO to recover and not to alarm lenders with new credit accounts. These are just a few of the considerations of this potentially complicated strategy.
@Realist wrote:
When dealing with SUBs it should be strategic.
1. Do you have a P1 and possibly a P2? You can produce double the opportunity.
2. Do you have a decent enough score to acquire approval - to work towards a SUB?
When you sign up for a credit card, your signature, aka your pledge, monetizes a debt that didn't once exist. It creates out of thin air, by your backing of stated amount and signature, and the backing banks fractional lending practices, monetary valuation. With this newly created money, the bank should earn a financial income greater than what you spend to achieve the welcome offer, or collectively over time should you keep utilizing the card ideally. Meanwhile, the cost of doing business, your bonus, is a write off for the financial instituation. It's a very clever system, one that actually benefits both parties, even if the financial institution gives money away. Additionally, don't discount all the free information they receive about you, to learn about your spending habits. There are profiles that are created among the populace, and these profiles are sold.
Next, you don't get to choose what SUBs you wish they offered. You can only choose between which ones they offer you. Make no mistake, each one is carefully crafted in a way that benefits the financial institution. You either choose to participate, or simply don't.
P1 and P2 in our household, have a primary line we use to acquire rewards annually. We spend "X" per month, we know what we earn at the end of the year. It's typically valued at about $2000-$3000 simply by reallocating the money we would spend already. We find this a better value, than if we were to simply "cash back" onto a card, but we are not opposed to taking advantage to cash back SUB cards. Now, with welcome offer SUB's, we pepper these in all throughout the year, some for P1, some for P2, and then we simply allocate spending to the offers upon completion, to earn the free weeks vacation or airline points, and then readjust afterwards back to the primary card again. Meanwhile, you are earning weeks of free vacation, or numerous airline miles, for doing nothing more than you ever did before. All you do is reallocate spending that rewards you for it. By placing it into it's own and unique bucket, you will likely use it for it's intended purpose.
Your only limitation to SUB cycling are hard inquiries. As most know, there are certain rules for certain card holders, but a 5/24 limit does translate towards many instituations, no matter how perfect your score or profile. There are exceptions, but you will find yourself in rare company. If you don't believe it, I would challenge you to push your luck, and apply while at this limit. You will find how many doors are closed to you, simply and soley due to hard limits. With that said, especially if you have P1 and P2 combination working, ideally you could and should be churning SUB opportunities once every two to maybe three months between both P1 and P2. It's four hard inquiries a year each, where cycling enough will not only offer FREE points, hotel rooms, airline travels routinely, it offers the satisfaction of cycling hard inquiries off the credit report routinely while keeping a clean and healthy profile.
At some point, you will need to create a spreadsheet to keep up with all the opportunity you've created for yourself. There's just too much opportunity for those that want to take advantage of it.
@IcyCool7227 wrote:Aim High thanks for all the valuable info. I'm like you - I have a lot of cards, not many as yours but a lot of options. My situation though is that I like having cards that I will use at least periodocally. The cards I'm looking at next after the Double Cash...most of them are excellent for long term reward spend but come with (from two Citis and an Amex) SUBs that equals a min. of $5,000 spend in 6 months with one Citi card requiring $1,500 in 3 months. That is a lot to meet for a person like me who doesn't want their spending to be so out of control again that there isn't interest and collections happening again (and I only make so much money). I've become very credit disciplined and want to stay that way. Even with $600 bonus CB plus any reward points after that spend is still a lot. I thought the Chase $500 spend bonus last year was more easier to meet.
Of course I don't have to take advantage of the SUBs but I feel I'd be at a loss if I didn't. I still wish to take advantage of unique cashback offers that Amex could provide (I watched a YouTube video several months ago on how to maximize the value w/ a 3rd party cashback site) and of course get to experience a new credit app plus experience awesome Amex service but don't want to feel compelled to spend more than what I'd feel comfortable with. That's why I would want to have the option after I'm approved for the card to be able to take advantage of the SUB like 6-8 months afterwards. I just feel that I couldn't meet that huge combined $5k spend yet don't want to miss out on those other things.
Of course there's other ways to meet that minimum spend besides huge planned purchases but won't mention that here since that may be against the forum rules. I just wish I could have the conv. of choosing when I'd like to do that without delaying applying for a new card. Or having an option of a longer time period like 8-12 months to meet the SUB.
The Citi Rewards Plus move would be a no brainer seeing how that could increase both those Citi bonuses by 10% more TYP (unless the value of TYP of R+ is really only 0.88 cents per point), plus Citi is so sensitive to new inquiries anyways. So I think I'll go for the Citi Rewards Plus card soon but also look at my transaction spreadsheet to see if I should apply for anything else and figure if I could just move what I normally spend on other debit and credit cards over to the new ones as I'd be getting at least 10%-13.33% per transaction anyways for either Citi (13.33%) and Amex (10%). If it wouldn't work out, then I could simply delay the other card apps for a few months. I'm proud of myself for doing this rationally to avoid getting caught up in lots of unnecessary debt again.
So to add to that strategy you mentioned Aim High, a consumer also needs to be aware of how much they could comfortably spend on new purchases for SUBs as well and plan it out efficiently.
You're welcome, @IcyCool7227 and those are great points about why the SUB strategy has limitations. Like you, I prefer to primarily apply for new cards mainly for those I plan to keep or at least give at least a decent trial run for a couple of years. And as you pointed out, meeting the SUB spend is easier for some consumers than for others. There have been times I decided not to pursue a SUB because I saw the spending might exceed what I could put towards it comfortably. There have been other times where I took on a high SUB because I knew I had some unusual spending requirements coming up anyway that would help me to meet it. So you are wise to plan it out and not get caught up in unnecessary spending.
It's just a theory, but I imagine the reason the SUB spend window is abbreviated is similar to what I stated above; the lender hopes the consumer will be more "conditioned" to putting ALL their spend over a brief period of time on their card and then continue to do so after they meet the SUB. But yes, I do appreciate when they give six months instead of three, especially on larger required spending levels!
@Realist wrote:Well said Aim_High.
I address this in prior posts, but the caveat is I don't repeat it with each and every post. The strategies I post are at times geared more towards mature credit profiles, but not exclusive to them, as we have successfully replicated these similar strategies successfully to what you may call P3 and P4, whose profiles aren't as deep, nor do they have the annual income near the same level. And yet, they still utilize a very active and successful strategy while keeping an eye on hard inquiries, and will move at a recommended slower pace, strategically, but still participate in earning these opportunities.
I think the beauty in financial creation is that it can be done with nothing more than an idea. A concept. The ability to create something from nothing at times, where your only limitation is your own mind and action. Every opportunity sprouts from a simple seed. The best time to have planted that seed was twenty years ago. The second-best time is now. Never jump headfirst into anything but instead dip your toes in and see where it takes you. You only need to start.
Thanks, @Realist. I agree that the mature credit profiles can attain the best (and safest) value from SUB-oriented credit strategies but that anyone can benefit at lower velocities. Some of us though, myself included, prefer not to pursue SUBs on just any card for the short-term gain without a longer term purpose. I will occasionally break that rule if the prize is lucrative enough. For example, AMEX just offered me a huge 250K MR SUB on their Business Platinum card which I would normally not even consider since it's not a good fit for me. But that SUB was just too tempting to pass up. 
My strategy, and the one I recommend most often to our members, is to apply for cards that fit my profile and that will give me value over time. The SUB just becomes icing on the cake. While I could push my new card applications much more aggressively, I don't wish to add that complexity to my financial world and place a high value on the stability of my credit file.
