Vermonster wrote:The biggest thing that people need to look at is "opportunity cost." Yes an app spree helps your AAoA by loading HPs and accounts at the same time and letting everything age together. But you generally end up with a ton of 0% offers that will be virtually wasted, or minimum spends that won't be met, or bonus savings that will be worthless. Opening that AARP for the extra 1% (which is already worthless if you eat in one day a year) might reduce the chances of a cli later on other cards. Those 36 store cards might lower your chances for a decent mortgage later in life costing you thousands in interest.
I'm sure people would reconsider the "$500 left on the table" if they could see everything they had to give up later in life for it.
Exactly, and I'm glad the people on this forum understand this concept far far better than the myfico sheep who open that AARP for the extra 1% every day. It's not even so much they make the choice to chase the rewards -- that's fine if that's what they want to do, although I think it's foolish -- but the bigger problem is that NOBODY ever points out any of the potential pitfalls or long term consequences. It's always: "Your score is good enough! The prequal is golden! Chase loves ____!" You'll be fine! 3% dining is awesome!"...and nothing else. While I get that it's not up to a community to be someone's financial advisor, it still seems that rewards of piddling value are placed about literally everything else. A newcomer on there can't really make an informed decision when the only responses are "did you app yet? The bonus is great!" etc
There's also the fact that that tiny "extra reward" prompts many people to spend more than they previously did, negating any actual benefit. Like the person on myfico who claimed he maxed out his Cash+ fast food...like, if you're spending 2k in 3 months on fast food alone, I think you need to stop eating 3 meals a day at Mcdonald's! It's not like he said he used fast food and another category and hit the cumulative maximum -- nope, fast food spending of 2k in a quarter. Plus he has an AARP that he "gets a lot of use out of". Yet his Sallie Mae is also "beloved" for the groceries...how can someone eat out that much AND buy that much in groceries? Overspending for rewards and following the myfico crowd, methinks.
More relevant to this specific point, he also says he wants a mortgage in the next year. So the opportunity cost of applying for 6-7 cards in the past 2 months for pennies in extra rewards will likely be that he'll face a higher mortgage rate which will force him to pay for those rewards many times over. Smart logic, eh?