Question about app sprees

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drd1170
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Question about app sprees

Postby drd1170 » Tue Mar 03, 2015 8:41 am

I see many people here that go on app sprees (and later "garden")...isn't applying for cards simultaneously terrible for your credit score? Also, do most people cancel these cards after whatever bonus they get?

Little confused here. I guess it could be like a hobby, but it seems like a big hassle/gamble.

And on a side note, which is totally off topic...why do so many people complain about annual fees? For example, I just got the CSP, and having to pay $95/year doesn't seem all THAT hefty...(and by no means am I "rich")

Just curious. New to reward cards.


takeshi
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Postby takeshi » Tue Mar 03, 2015 8:58 am

drd1170 wrote:isn't applying for cards simultaneously terrible for your credit score?

Generally speaking the more applications and new accounts the bigger the impact. However, impact also depends on one's credit profile. A thinner profile is going to be able to handle less than a thicker profile.

Further, the total impact (positive or negative) really depends on one's credit and how the various factors all add up for the individual and situation after adding the new account(s).

Pulls report immediately but new accounts do not so there can be some benefit to a spree in that regard.

drd1170 wrote:Also, do most people cancel these cards after whatever bonus they get?

People vary. Some churn, some do not.

drd1170 wrote:why do so many people complain about annual fees?

Same reason people complain about paying for anything. Always consider the source. Many fixate on AF's and fail to consider total cost versus benefit.

LessIsMore
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Postby LessIsMore » Tue Mar 03, 2015 1:08 pm

I recently went on an app spree, acquiring 4 new cards (out of 7 apps). The 3 denials came from Bank of America, US Bank, and 1st National Bank. I also went to all my existing cards that hadn't increased my CL and asked for CLIs. "All" of them increased my CL ... some substantially. But, after all of that, I noticed my Equifax score going down by 10 points ... but my TransUnion score going up (grin). Go figure. I expected scores to go down further - but they didn't.

The only complaints I've heard about annual fees come from those who can't acquire cards without annual fees. While it's not always true, many card issuers who do charge annual fees are considered predatory - appealing primarily to prospective cardholders who have less than perfect credit. My ex-wife has such a card - a VISA (her only credit card). The CL is $1,000 and the AF is $95. The last time I checked, she was also paying a monthly maintenance fee (small, but still a fee). But, given her credit history, it's not a surprise that's all she can get. Personally, I've never had a card with such fees - and I have 14 credit cards.
"People with a clever plan can assume the role of the mighty."
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drd1170
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Postby drd1170 » Tue Mar 03, 2015 3:54 pm

Thanks for sharing, guys. Very interesting observations here on this forum as a newbie. Learning A LOT as well.

Brad Bishop
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Postby Brad Bishop » Wed Mar 04, 2015 8:05 am

I don't know that I'd call it a "spree" but, every so often (we're talking years apart, here), I'll decide to apply for a card and, because all of my reports are frozen, I have to temporarily lift the freeze. Usually when I do this if there's another card I'm somewhat interested in (wouldn't have applied for otherwise) then I'll go ahead and apply at the same time just because it's easier to keep it all within the same freeze-lift window.

Of course, what usually happens is that second card I was somewhat interested in, but not enough to pull the trigger and lift the freeze on all by itself, will get dumped before the year is up. I don't really plan it out that way but it just seems to happen as I review what's in my pocket and think, "Do I really need/want that card?" If the answer is, "No," then away it goes.

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Xorand
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Postby Xorand » Wed Mar 04, 2015 6:20 pm

When it comes to annual fees, I think it is good to compare the AF with the benefits you expect to receive from the card. Good examples from my portfolio:

My AmEx Blue Cash Preferred has a $75 annual fee. However, I earned around $600-700 cash back on purchases with it last year. Win.

My Chase CSP has a $95 annual fee (the first year is waived). I frequently rent cars and the CSP provides primary coverage insurance on the rental - a service I have on my BCP but that costs an extra $20 per rental. Five car rentals and I break even on that benefit. Besides the CSP is my most-used card and I'll probably easily earn more than $95 cash back (or UR point equivalent) per year.

Bad example from my portfolio:

I'll admit to getting an Amex Platinum more for some perceived prestige than anything else. So far, I've earned about 45k airline miles (most all of that as the bonus given for initial spend). If you value the airline miles at a penny apiece, then I've about broken even on the $450 AF (which was not waived first year). I suspect I'll drop this card before its first anniversary.
AmEx - Platinum (NPSL) , Blue Cash Preferred ($19,000), Gold Delta Skymiles ($8,500)
Chase - Sapphire Preferred ($14,000), Disney ($11,500), Amazon.com ($9,000), Freedom ($8,000)
CapOne - QuickSilver ($7,250) / Platinum Rewards ($7,250)

JonE
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Postby JonE » Wed Mar 04, 2015 7:01 pm

I think the next 'spree' I go on will involve 2-3 cards that I'm eyeballing for future use. CSP is up there (as an accompaniment to the Freedom, and I bank with Chase). Either the Barclay Apple Rewards VISA (need to replace my old Macbook) or Barclay Rewards MC as a precursor to Sallie Mae, plus Amex BCP and Discover to round out all 4.

I don't mind paying an annual fee as long as the card is useful and I can make it back in cash back or travel rewards.

The Chase Freedom I applied for in October, it'll probably be that long this year before I try for more.
Wallet: Chase Freedom, Discover IT
Chopping Block: Synchrony
Future: TBD

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CarefulBuilder14
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Postby CarefulBuilder14 » Wed Mar 04, 2015 8:33 pm

JonE wrote:Either the Barclay Apple Rewards VISA (need to replace my old Macbook) or Barclay Rewards MC as a precursor to Sallie Mae


Shop through Chase will give you rewards that are better than the Apple Rewards card (if shopping online), and the Barclay Rewards card is pretty pitiful. Since Barclaycard I've heard can sometimes make it hard to PC cards, I'd just wait until you think you could get a Sallie Mae and apply for it directly.

Be sure you're spending enough on groceries to need both the SM and BCP.
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card

flan
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Postby flan » Wed Mar 04, 2015 9:23 pm

takeshi wrote:.

Pulls report immediately but new accounts do not so there can be some benefit to a spree in that regard.


And the people who do this try to build sprees where the pulls are spread out over bureaus, so the people that pull just one report don't see all of them. So they get all their planned apping done all at once, let the inquiries age together, then in six months or a year, they have a bunch of accounts that are no longer new.

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Vattené
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Some Thoughts on Annual Fees

Postby Vattené » Thu Mar 05, 2015 5:17 pm

LessIsMore wrote:The only complaints I've heard about annual fees come from those who can't acquire cards without annual fees. While it's not always true, many card issuers who do charge annual fees are considered predatory - appealing primarily to prospective cardholders who have less than perfect credit. My ex-wife has such a card - a VISA (her only credit card). The CL is $1,000 and the AF is $95. The last time I checked, she was also paying a monthly maintenance fee (small, but still a fee). But, given her credit history, it's not a surprise that's all she can get. Personally, I've never had a card with such fees - and I have 14 credit cards.

There certainly is that lower tier of AF cards geared towards customers with worse credit and worse financial management skills. Banks love milking fees out of these higher risk people. Think of Capital One, which has two versions of the same card among many products - one has no AF for the higher quality customers, and the other has like a $39 AF or something like that for the rest.

There are also plenty of cards that have AFs geared towards the higher quality customer base. Sometimes they offer the illusion of prestige (think Amex Platinum and its imitators [not that all cardholders are suckers - many get more value than they pay, but there are certainly those that are in it for the air of exclusivity), but frequently they serve to make sure the customer is using it enough to make it worthwhile for the issuer. Airline and hotel cobranded cards often have AFs. If they are giving out primo rewards, they're going to make sure they get something in return. It forces some amount of loyalty out of customers.

Churners and rewards-optimizers have to carefully weigh the costs of AFs against the benefits of their cards. It can net you more than non-AF card options, but one can't spread spending too thinly accross too many cards or AFs will eat up rewards. That's really the whole point of churning: get the introductory bonus and dump the card before it becomes too costly (or, in many cases, before it costs anything at all since many cards waive the first year's AF as a sweetener).
-Vattené
FICO-8: EX - 827 (5/17) | TU - 824 (5/17)
My Cards: Barclay Arrival+ | Discover it | Amex ED
AU:: Discover Miles | BofA BBR | Barclay Commence (SD'd)



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