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On Friday last week I applied for three rewards-earning credit cards. Many in the miles and points world refer to this as a “churn”. The definition of “churn” can mean applying for the same card over and over, or it can mean applying for rewards earning credit cards in batches even if you have never had them before. In this case my definition of churn is the latter.
First, I looked at my credit scores and points balances to determine what my travel goals were for the next 18-24 months. I like to apply with a specific redemption in mind. Sometimes plans change and that isn’t what the points are used for, but it helps me prioritize which offers to go for. Given my goals, I then reviewed which offers were out right now, including giving special preference to those that are short-term offers that might not be around when it is time for me to potentially get new cards in about three months. I identified that I needed to build up SPG points and Hilton points. I would have liked to add some more Ultimate Reward points to my collection, but I decided to go conservative with Chase and not use them on this round of applications. I selected three cards from three different banks, other than Chase. One was a business card and two were personal cards. Here are the cards I selected and why I selected them:
Starwood Preferred Guest Business Amex:
This offer was for 30,000 Starwood Preferred Guest points after spending $5,000 on the card in the first six months. The $65 annual fee is waived the first year. The temporarily increased offer (from 25K points) is only available until September 4th, and historically it is an offer that has only come around 1-2 times per year, so I wanted to get in on the additional points while they were available. Not only do I need the sign-up bonus points, but I also like the 2 stay credits/5 nights toward elite SPG status that come with the card. I have written extensively about this offer and how to maximize the points either for hotel stays or flights, so I won’t go into detail again here.
I called American Express to try to get the application pushed through and was told that I would be receiving a letter detailing some documentation they need from me before they can approve the application. I was told that they would likely require a letter from our bank on letterhead that verifies our business address. I was told that they are also likely to request a completed T-4506 which is an IRS form that is a “Request for Transcript of Tax Return”. I’m less than thrilled about that, but it is a reasonable request before they extend me more credit. Not all parts of this “hobby” are enjoyable. Getting rewards-earning credit cards is very lucrative, but it isn’t always super simple. It will be interesting to see what comes of this application since my business income for 2011 is very small. I’m willing to play the game for the points and do whatever I reasonably can to get the application approved. I’ll wait and see what the official letter asks for before I actually go around collecting letters and filling out forms.
This offer is for 35,000 Hawaiian Airlines Miles after spending $1,000 on the card in four months. The $79 annual fee is not waived the first year. I applied for this card as I wanted build my HHonors points toward a future redemption. There are tons of cards out there that can earn Hilton points, but I selected this one as it is from a bank I don’t use as frequently for credit cards, and you can get the card on a regular basis…. This card awards 35,000 Hawaiian miles, which could be useful as Hawaiian miles, but they can also be converted 1:2 to Hilton points, which is the option I am planning to implement. This can also be done with the Bank of American Virgin Atlantic card that comes up to 50,000 miles when you sign up that can be converted to 100,000 Hilton HHonors points.
70,000 Hilton points is a decent start on a stash of points that I will possibly use at either Waikoloa Beach Resort (50,000 points per night) or the Conrad Maldives Rangali Island (also 50,000 points per night). Before I redeem my Hilton points for a big drip I hope to get the Hilton Amex so that I have access to AXON awards. I’ll go into more details on that in a later post, but it will allow me to book 4 nights at a Category 5, 6, or 7 hotel for a reduced number of points. For a Category 7 Hotel, like the ones I mentioned above, that means instead of 200,000 points for four nights, it would be just 145,000 points for four nights. That is a huge savings!
I don’t think that Hilton HHonors points are very valuable for “everyday” hotel stays (for example, some Hampton Inns in Houston are 30K points per night – no thanks), but there are some fancy schmancy places where they can come in quite handy. As my husband and I plan our “five year anniversary trip” (aka honeymoon that we never really took), we have our eye set on some pretty great spots. I do also plan to get other cards that provide Hilton points (including a virtually identical offer from the Bank of Hawaii) over the next year or so as I build my stash of points, but this one worked for this churn.
Status: Instant Approval
This offer was tied to how well the US did at the Olympics and will award 33,150 FlexPerks points after spending $2,500 in five months to get the points. The $49 annual fee is waived the first year. This is a limited time offer available until August 31st. I will be using these points to obtain airlines tickets as the points are most valuable when redeemed in that manner. 33,150 FlexPerks are worth a little more than a $600 airline ticket. However, the best play with these points is to spend the $2,500 required in a bonus category such as travel or groceries (or to purchase gift cards sold at grocery stores). That way you are earning double points for those purchases. That will bring a total of 38,150 just by meeting the spending requirement. Then you just have to earn another 1,850 points (ie another $925 in spending in a bonus category) to hit a threshold of 40,000 points. You can read a very detailed and helpful post from Hack My Trip on how to maximize the bonus and related spending.
Since their rewards system is tiered, 40,000 points are much more valuable to me than 38,150 points. With 40,000 points I can get two airline tickets that cost under $400 (or one that costs up to $800). What is great about these tickets is that they will be mileage-earning tickets. I’m not 100% sure how I will use these points yet, but they may help with positioning Little C and myself to the West Coast for our flight to Hawaii! The trick will be to use them for airline tickets that cost as close to $400 as possible in order to maximize the value of the sign-up bonus.
I called to check the application status at US Bank today (1-800-947-1444) and was told that they would likely be getting to my application and getting an answer to me by Wednesday. That is the fourth business day from when I applied. I was actually very hesitant to apply for this card since they really don’t seem to like to approve customers with very many inquiries on their credit report. Since I am a fairly conservative churner, I did apply for this once I started to see some approvals on this Flyertalk thread, but I knew it was somewhat of a risk. My fingers remained crossed on this one.
If you have a credit card churn coming up, I recommend going through some of the same steps I did in evaluating which offers to go for now, and which ones to shelve until a later date. I’ll keep you posted on how these applications turn out.
Disclosure: I do receive a commission for the SPG Business Amex. The other cards mentioned are not my affiliate links – they are just the best available offers out there. As always, thanks for your support.