Beginning of the End for the Miles Game?
 

As you may already know, American Express recently imposed a strict new rule on credit card applicants: you can now only get approved for the same Amex credit card once in your entire lifetime.
Previously, identical Amex products could be churned once every 12 months, allowing one to accumulate a boatload of Delta miles and/or Membership Rewards points.

Predictably, Chase followed suit a few months later with their own rule. Now, certain Chase cards* will not be approved if you have opened 5 or more credit card accounts within the past 24 months (with any bank).
I am now anxiously waiting to hear what Citibank has in store for us.

This is obviously a game changer for those of us who have made a hobby out of collecting miles and points.

Thoughts?



P.S.: Sorry if this topic was covered in another post, but, surprisingly, I have not been able to find this discussed anywhere on FlyerTalk


*Chase Freedom, Chase Ink Cash, Chase Ink Plus, Chase Sapphire Preferred, Chase Slate

Chase used to have the same rule regarding bonii. Times change, and there will always be ways to abuse any program.

I would love to hear how to get around these new, draconian rules.

I'm sure you would. I cannot comment further without violating the FT ToS.

Only for personal cards:

http://www.flyertalk.com/forum/ameri...etime-usa.html (in the Amex forum)
And something very close to that is still possible with Amex business cards. I just got a targeted offer for 75k MR points on the Business Gold Rewards card, and no sooner had finished the minimum spend on that, when I was able to apply (and get approved) for the business Delta Gold card for the limited time (through 6/30) 50k bonus. That's despite having had the personal Gold and personal Delta before. And unlike at Chase, applying for business cards at Amex without actually having a business is easy.

Citi came from a more linient place that either Chase or Amex was ever before (it used to allow 2 cards of the same type to be applied for on the same day, it used to not care about closing of its cards, etc). Now card after card (except where for now you can find a "zombie link") are moving to "no bonus if you either opened or closed the same card in the last 18 months".

Oh, and Citi used to not give you the card if it was not going to give you the bonus, and now it gives you the card anyway (even if it might not give you the bonus), and you have to figure out whether you're going to get the bonus or not.

So I don't necessarily expect any more shoes to drop at Citi soon, given that Citi was actually first to do this tightening on churning, it's just that they did differently (and from a different starting point) than Amex and Chase later did.

Meanwhile, you have to keep in mind tthat this gone back and forth in history a few times. Some number of years ago, before Amex allowed you to get the same bonus after a year or two, Amex used to never give you the bonus if you had it before unless the new bonus was bigger and then they would give you only the difference between the old bonus and the new bonus for the new card. So Amex tightened, then loosened, then tightened again.

And Chase may have gone through cycles too, I'm less familiar with Chase churning rules over the years so I can't be as specific there.

And btw CIti has gone through cycles too. They used to allow "fast" churning of AA cards, then stopped it, then a few years ago started it again, then stopped it again.

Btw, BofA has tightened too, but again from a different starting point. Up until a few months ago, it was possible for some people to apply for 3, 4, 5, or 6 Alaska Airlines cards at the same time. Then some stupid bloggers started talking about it, BofA noticed, and now it's only one personal AS card every 3 months. Relative to every other bank, that may seem like free-wheeling churning, but relative to a few months ago, it's a big tightening.

Anyway, Chase is the only one (other than longtimers like Barclay, of course) that is counting other banks' cards against the new card you're trying to get. Amex is only locking you out of personal cards you had before, not locking you out of ones you didn't have. Citi is making you wait 18 months to repeat the same card, but no wait is needed for a card you didn't have before. BofA is (horrors!) making you wait 3 months to repeat the same card.

In short there is always new targets.

Not true for the business accounts, it would seem. I was just approved for an Ink Plus with 20+ new accounts in the past 24 months. Without having to talk to a soul at Chase to plead my case, I might add. Used my own name and SSN on the Ink app.

I thought you could only be awarded a bonus for the same card once in your lifetime. That's completely different from what you said. This is the first I've heard of this policy.

OK, I may have been wrong, but it has the same detrimental effect for the purpose of accumulating miles and points.

So, do you think the pendulum will once again swing the other way? I haven't been at this game for very long, but I don't think the rules have ever been this restrictive. I fear that a paradigm shift has occurred, caused by too many people (like myself) entering the game and affecting these banks' bottom line.

Lol I was about to freak out lol. I was like but there are some cards that I want to cancel! What if I want them in the future but get denied ahaha... the TS just stated it wrong lolol.

Actually a miles blogger (may have been Noob Traveler, but don't remember exactly) did mention that if you want, for example, the Chase Sapphire Preferred card, and you're new to the miles game, get it in the beginning because you won't be able to get it later on (when you will always have more than 5 open accounts). So, if this is correct, my first statement may not have been wrong after all.
Regardless, these new rules are a devastating blow to all of us who collect miles and points, no matter how you slice it.

There must be some kind of exception to this because I was recently approved for a Chase Sapphire Preferred despite nine other new accounts opened in the past year. It might be that I only had one other Chase account, but maybe it was some other reason. But as of three weeks ago it was not totally impossible.

Overly dramatic thread.

It wasn't my intention at all to be, as you say, "dramatic". In fact, I wish I didn't have to start this thread to begin with. I'm quite distressed by these new credit card rules, which will surely put a damper on my burgeoning hobby. I'm not quite sure why you don't feel the same way I do.

Abuse is a crass term and so inappropriate when it comes to MS! Money laundering, illegally foreclosing on homes, gaming LIBOR rates - these are examples of program abuse. Customers who legally MS simply represent the moral hazard that misbehaving banks invited upon themselves. :p

Afterall, "Moral hazard is a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost."

As a data point.

Wife was able to score bonus 50k on SW Premier card 2x within the 24 month time frame.

I tried a Citi Premier TY within the 18 month disclaimer and was denied 50k bonus.

This is recently.

Like the legend of the Phoenix
All ends with beginnings
What keeps MS spinning
The force from the beginning

We've come too far to give up who we are
So let's raise the bar and our cards to the stars

As the economy improves, banks will get more restrictive.

When the economy tanks again, bonuses will come back stronger than ever as banks fight for a shrinking pool of quality customers.

See 2008-2010 glory days as a reference.

The only surprise in all this is how long banks let this all go on nearly unabated for so long. I think the growing number of miles/points bloggers looking for commissions is what ultimately turned this narrow niche of miles-collecting hobbiests into the mainstream, nearly common knowledge game it is today and that's forcing banks to start shutting down the wide open loopholes that so many more have now been taking advantage of. The 2-edged sword that bloggers bring to the game is what has and what will ultimately slow miles-collecting to an excruciatingly slow crawl: they have so efficiently and relentlessly enlightened travel-lovers out there to the joys of (formerly) easy credit card bonuses that the sleeping giants (banks) have finally been forced to deal with it. (Fortunately at a relatively slow pace.) I'm sure they've always been aware of the relatively few miles/credit card geeks taking advantage, but now everyone and their dog (literally, if you know what I mean) is on this now obnoxiously covered hobby of a bandwagon.
Just wondering how/why there are still as many opportunities out there for churners as there are. But not to worry. Nothing that several dozen new credit card bloggers can't fix for us...

I think the banks want new churners, they just don't want the experienced ones.

A newbie gets enticed into the hobby by the bloggers. At first, the credit card world is his oyster. He can apply for multiple cards in the first few years, and receive all sorts of wonderful bonuses....

but then one of two things happen:

1) He gets over his head. Debt starts piling, he doesn't pay off his balances each month. The ridiculously high APRs of these rewards cards hit, and the banks have a profitable customer.

2) He is successful at churning. He is not a profitable customer, and banks are less interested in having him as a customer. He begins to have a harder time acquiring cards and bonuses because of tougher rules from the banks. Eventually, he has to slow down the churn. As an unprofitable customer, it gets harder and harder to continue.

The bloggers do just fine under this scenario and serve a valuable purpose for the banks.

I do think churning will continue to be doable, just at a slower pace and with some creativity. :)

Considering the processing fees levied by the CC networks, is it really accurate to say that only the ones drowning in debt are profitable, desirable customers?

If you are a successful business owner who puts through $100K a month and never misses a payment, well, there's no interest being paid but assuming that the issuer gets a 2% cut (or whatever) of that amount, then that's a great haul.

And even for a regular salary-earning consumer, if you're a loyal user of one particular card and you put through $25K a year on a card where you basically pay for the overhead and then some through the annual fee which is normal behaviour outside of FT-world, it's hard to see how that isn't profitable for the issuer.

I agree that the customer in this second example is a desirable customer, but that would not be considered churning. :)

I don't think churning itself is done for right this minute. However, I actually see a situation where credit cards in general become more difficult and less worthwhile to use over time. I've already seen some smaller businesses who've never had limits on credit card use before start instituting minimums since they're now allowed. Businesses are also now allowed to steer customers towards debit cards and cheaper (for them) credit card products, though I haven't seen much of that yet.

And there's also the possibility of the government managing to cap credit card interchange like in Europe, which if that happens means there won't be a miles/points game at all any more.

Fair enough! But even if that big spender churned every year and never paid an AF, they would still be an attractive customer.

I'd say the name of the game if you're a CC issuer is get cards into the hands of the public... and that's why churning will probably never go away completely, even if it were to become a bit less lucrative than it is now.

Yes, bonuses do become more generous during a recession, but if these new cc rules stick, it won't matter as much to us, anyway, because we will be restricted.

You're more optimistic than I am. The changes these banks have introduced are structural in nature. They're not merely tweaks (e.g. seasonal lower bonuses, higher minimum spends, etc.). Unless these new rules are eventually rolled back, collecting miles/points won't be the same again.
I hate to sound so negative. As I stated in an earlier comment, I have only been in this game since 2012. Perhaps some of you guys have that have been collecting miles longer can enlighten me if anything similar to this has ever happened?

I agree, but at a much slower pace, which makes all the difference. It's going to be akin to taking a 50% pay cut-- you're still earning a salary, just not quite the same salary as before.

^

The shy has not fallen and I agree this thread is overly dramatic. There are so many opportunities for those willing to learn and impliment them. It is very easy to earn well into 6 figures of miles per month, plus $$$$, without even earning a single sign up bonus.

If it exists, I haven't heard of it.

I do not do 6 figures, I easily do 5 figures a month and, make money.

That's because if it does exist, and you read about it on FT, it will not exist for long.

There's a whole forum dedicated to doing it:

http://www.flyertalk.com/forum/manuf...-spending-719/


But I wouldn't necessarily agree that Manufactured Spending (MS) in high monthly amounts is "very easy", especially for someone who doesn't live anywhere near a Wal-Mart. (Many of the techniques are based in part on visiting a Wal-Mart Money Center quite frequently.)

Plus some cards can shut you down if you do too much of it (or "the wrong way"). So the research into which cards tolerate what doesn't seem so "very easy" to me either.

Nor is it as "free" as signing up for cards with waived annual fees. There's typically fees involved (for example, $5.95 for a $500 gift card is about 1%). 100,000 miles in a month sounds nice but if that's $100,000 of MS with 1% of fees, that's still $1000 in fees. It may be less spend-per-mile (and thus less fees-per-mile) with the right cards (some of which may impossible for a churner to get anymore, if they don't have them already, because they're Chase UR cards), but then that requires being near the right office supply stores or whatever. So, again, it doesn't sound so "very easy" for everyone to do.

It may have been a little easier during the original "US Mint" scheme (especially in the early days when most any bank took the coins in), but as time goes on, many of the simpler MS schemes go "poof" and only more complicated schemes take their place.

So it depends on how much you're immersed in each "culture" as to whether it's easier to get large amounts of miles through churning or through MS (or through neither, if you're not up on either culture!).

Exactly what I suspected, thanks.
I've always instinctively known that getting bonuses is, by far, the easiest, cheapest and most efficient way to rack up miles. And the fact that the cc companies are making it much harder to get these bonuses confirms this, otherwise, they wouldn't even care.