Too much weight on sign-up bonuses?

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apatrickg
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Too much weight on sign-up bonuses?

Postby apatrickg » Sat Apr 29, 2017 8:04 pm

Hi folks,

When perusing web sites that describe the best cards to maximize rewards, one thing sticks out at me - a lot of weight is placed on the "sign-up bonus." While some of these bonuses are quite generous, they are nevertheless a one time thing. In the end, I'm most concerned with the actual card that I'll be living with for a while, and I want to create a portfolio of cards that allows me to maximize my rewards over the long term, not just when I'm signing up that one time. The recommendations that heavily emphasize sign-up bonuses seem to be written for consumers who don't have any/many credit cards, or would somehow be able to apply for multiple cards each year.

Which leads me to my questions... are there people who just constantly apply for cards and then shut them down (and open new ones) in order to maximize all the sign-up bonus options? Are there people who just keep adding card after card, to the point of having, 20, 30, 40 cards? I guess I don't see any reason to go beyond 6-8 total (for me), and I just want to know what the 6-8 best would be in the long term... the one-time bonus doesn't get a lot of weight from me.

If anyone can shed light on why sign-up bonuses are so heavily highlighted, or if people tend to sign up for lots and lots of cards, I would be very appreciative. I'm just curious about others' behaviors more than anything.

Thanks!

Patrick


kdm31091
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Re: Too much weight on sign-up bonuses?

Postby kdm31091 » Sun Apr 30, 2017 8:21 am

I can see both sides of it. On one hand, like you, I prefer to apply for a card that benefits me in the long run, and not just because of the bonus.

But in the case of cash back and especially lower spenders, the bonus can be significant. If you apply for a Capital One Quicksilver at 1.5% back with a $100 bonus, for the first $20,000 in spend, that card will beat out a Double Cash with no sign up bonus but 2% back in rewards. For many people, it takes a long time to spend $20,000 on their card, so this is significant and shouldn't be ignored. This is just an example.

Others just prefer to hop from card to card and collect various bonuses, although issuers are making this more and more difficult now.

Most average consumers do not pay much attention to rewards, so they need to be lured in with a sign up bonus or it's unlikely they will pay enough attention to the everyday rewards to be compelled to apply for the card.

Nixon
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Re: Too much weight on sign-up bonuses?

Postby Nixon » Sun Apr 30, 2017 9:10 am

It's simple.

Why settle for 2-5% cashback when I can glean 20-25% through bonuses.
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CarefulBuilder14
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Re: Too much weight on sign-up bonuses?

Postby CarefulBuilder14 » Sun Apr 30, 2017 12:53 pm

Banks generally focus on getting new customers more than keeping existing ones. As bonuses get better, the card gets worse for people who keep it.

They incentivize somewhat disloyal behavior in customers. Bonus chasing is just opportunistically responding to perverse incentives. Not many cards are attractive to keep in the long run.
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

Nixon
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Re: Too much weight on sign-up bonuses?

Postby Nixon » Sun Apr 30, 2017 3:43 pm

CarefulBuilder14 wrote:Banks generally focus on getting new customers more than keeping existing ones. As bonuses get better, the card gets worse for people who keep it.

They incentivize somewhat disloyal behavior in customers. Bonus chasing is just opportunistically responding to perverse incentives. Not many cards are attractive to keep in the long run.


I'm gonna go where the money is every time.
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Tubpbs
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Re: Too much weight on sign-up bonuses?

Postby Tubpbs » Sun Apr 30, 2017 5:04 pm

Nixon wrote:
CarefulBuilder14 wrote:Banks generally focus on getting new customers more than keeping existing ones. As bonuses get better, the card gets worse for people who keep it.

They incentivize somewhat disloyal behavior in customers. Bonus chasing is just opportunistically responding to perverse incentives. Not many cards are attractive to keep in the long run.


I'm gonna go where the money is every time.


Mostly irrelevant to this conversation, but you're actively responding here...

Do you mind telling me where you were at in the past when you've reached your exposure limit with Chase? If you're not down with answering here, but are in private, please message me. Thanks!
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

Nixon
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Re: Too much weight on sign-up bonuses?

Postby Nixon » Sun Apr 30, 2017 8:19 pm

Tubpbs wrote:
Nixon wrote:
CarefulBuilder14 wrote:Banks generally focus on getting new customers more than keeping existing ones. As bonuses get better, the card gets worse for people who keep it.

They incentivize somewhat disloyal behavior in customers. Bonus chasing is just opportunistically responding to perverse incentives. Not many cards are attractive to keep in the long run.


I'm gonna go where the money is every time.


Mostly irrelevant to this conversation, but you're actively responding here...

Do you mind telling me where you were at in the past when you've reached your exposure limit with Chase? If you're not down with answering here, but are in private, please message me. Thanks!


$41,000 last year when I hit the wall, now about $55,000.
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Tubpbs
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Re: Too much weight on sign-up bonuses?

Postby Tubpbs » Sun Apr 30, 2017 8:48 pm

Thanks Nixon.
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

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kcm7
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Re: Too much weight on sign-up bonuses?

Postby kcm7 » Mon May 01, 2017 4:26 pm

For me, it's a balance -- card needs to have a decent sign-up bonus (and I've always asked the issuer to match the highest available, even if it's not the one I received). But I don't churn, so the card needs to have long-term benefits as well. You'll notice my list of cards is rather short, for that reason.

I'd never apply for a card if it didn't earn a sign-up bonus, which is why I don't have the Citi Double Cash.
Cards:

-Capital One Quicksilver
-Barclaycard Arrival (no AF)
- US Bank (no rewards)
-IHG

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CarefulBuilder14
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Re: Too much weight on sign-up bonuses?

Postby CarefulBuilder14 » Mon May 01, 2017 6:16 pm

kcm7 wrote:For me, it's a balance -- card needs to have a decent sign-up bonus (and I've always asked the issuer to match the highest available, even if it's not the one I received). But I don't churn, so the card needs to have long-term benefits as well. You'll notice my list of cards is rather short, for that reason.

I'd never apply for a card if it didn't earn a sign-up bonus, which is why I don't have the Citi Double Cash.

There are cards to apply for, and there are cards to PC into. DC is definitely one of the latter, though so many overlook the advantages of starting with a bonus card.

If there's any truth to the claim that DC has unusually low SLs, it's also a way around that.
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



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