MilesBuzz! - Credit Cards and Sign Up Bonuses

Maybe this is a dumb idea, but is it possible to sign up for a new credit card with bonus miles, charge 1 item, pay off the bill, cancel the card, and then re-apply somewhere down the line for a new card and bonus miles? If this worked (or some variation on this plan), it is relatively easy to do for 5K blocks of miles.

What do you think?

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There's no substitution for a genuine lack of preparation

I have seen others do so with American Express and their co-branded cards- ie. sign up for the lucrative Delta SkyMiles Optima and then cancel only to sign up later or for another Amex card such as Hilton Optima.

All in all, it is your credit history you are playing with. If card issuers pick up on you signing up for a previous card you had, they could deny you the new bonus. I would wait at least 6 months before even considering applying for same card again.

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"Fly me to the moon and let me earn alot of miles."

You could definitly do it, but you lower your credit rating every time you apply for a new card. Too many applications in a short amount of time is interpreted by the models as a person desperate for credit, therefore a poor credit risk. The credit card companies have also just developed a tracker to find customers who sign up for teaser rates, then drop the card and apply for another once the teaser rate expires. You would probably run afoul of this model as well with your method. I wouldn't recommend it if you plan on buying a house, car, or any other big purchase where your credit rating determines your interest rates. On the other hand if you don't plan anything like that for at least the next two years, then go for it.

Actually, it could mess up your credit rating for longer than 2 years. And, if you are planning on buying a house, car, or other big purchase, it might not just cause your interest rate to go up - but you might be denied the loan. In NYC I know that this can even affect your chances for being able to rent a flat in certain buildings.

Try it at your own risk and with full knowledge of the possible effects.

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I wish I were 1,000 miles away

Just to clarify, I pulled copies of my credit reports from all three of the credit reporting agencies. They all state that credit report inquiries remain on your record for two years. The actual cards you obtained, however, stay on your record for 7 years. Although most credit scoring models currently look at the inquiries as bad rather then the number cards you may have held, it is possible that some models do take it into consideration or will in the future.

I'm no expert but ...

While some people with marginal credit may want to avoid signing up for and cancelling too many cards, I think most people without problems have little to fear. I've signed up for and eventually cancelled (usually just before the annual fee becomes due) every mileage earning card I ever heard of that offered a signup bonus and no annual fee or a waived annual fee for 6 mo. or a year. I've never had it negatively affect my credit, or at least not in any noticable way. I've refinanced without trouble. I also checked my credit score online recently and found nothing negative reported.

If you are worried about it, just stretch out the applications a bit to about one every six months, and instead of cancelling, take the bank up on offers to be swithed to a no-fee card when you call to cancel.

The one card worth getting and keeping IMHO is the Diners Club card for all the reasons stated on these boards many times. And before mktozd jumps into this thread with his sponsor code, let me say that me and most everyone else around here with a Diners card would love to refer you. I advocate giving the refrral bonuses to the Flyertalkers who post content most valuable to you.

What a coincidence - I'm trying to sell my house and apply for a construction loan/mortgage for building a new one. http://www.flyertalk.com/forum/frown.gif I've also just signed up for about 3-4 credit cards with these mile deals.

dhacker, since you gave me some useful advice (or at least some useful advice that I wanted to hear http://www.flyertalk.com/forum/wink.gif, e-mail me your referral code and point me to the Diners's Club deal (what the heck, one more card won't hurt - will it? http://www.flyertalk.com/forum/rolleyes.gif

I think I'll use the "hold on to the card and change it to a no fee" method and see how that works.



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There's no substitution for a genuine lack of preparation

Originally posted by AirGurn:
I think I'll use the "hold on to the card and change it to a no fee" method and see how that works.


I don't think that works with Diners Club, at least it didn't in the past. Now that they're owned by Citibank, though, you may get an offer to switch you into a no-fee Citi card. It's worth a try, I suppose.

As a digression, I like Diners best of all the cards I've had. The problem is that you're paying basically the same fee (~$80) to carry either of the premium cards, and AMEX is accepted more in the US than is Diners (although Diners is getting in more "non-traditional" places lately, like the post office).

Logic would dictate that if you're going to pay the fee for a premium card, you should go with the one accepted more places, i.e., AMEX for a person living in the US. The other solution is to take Diners as your main card, and the Starwood (no-fee) AMEX as the back-up. However, it looks as though they might mess with the "no-fee" aspect of Starwood now. http://www.flyertalk.com/forum/frown.gif I hope not.

I too am a huge fan on Diners due to the ability to transfer miles to virtually any airline or hotel program to top off or whatever a deficient balance. Unfortunately the redemption requirements are getting a little out of hand.

If you don't think it matters, consider that the Northwest 10,000 mile promotion allowed this family of four to obtain 40,000 Northwest miles, 60% of which came from Diners Club transfers.