Rumors of Churning Demise Have Been Greatly Exaggerated

By now, you’ve probably heard the terrible news about new Chase policy regarding their branded cards, not to be confused with co-branded offers. For those who have been living under a rock, here is the deal in a nutshell: Chase will not approve anyone who has added 5 new cards to their wallet within the last 2 years. They don’t just count credit pulls, but ALL cards from all the banks, including those where you are an authorized user.

Once again, for now, this new policy only affects Chase Freedom, Chase Sapphire Preferred, Chase Ink and Chase Slate. Cards like Chase British Airways Visa, Chase Southwest etc. are OK. For  in-depth discussion and all the latest developments, follow this thread on Flyertalk, specifically the WIKI. This will be your best bet for staying in the loop.

So, does this mean the sky is falling…again? Nope. In this hobby the only constant is change. What is true today may not be true tomorrow. You have to stay calm and adjust accordingly. Of course, it’s a bummer that Chase instituted this new policy and I really wish I would have applied for CSP card in April while I still could. I did get my husband’s app approved in March, phew!

But not to worry, Chase has plenty of cards to keep me busy for the foreseeable future. Remember, you can get the bonus  24 months after receiving it on that specific product. Originally, I planned to get CSP card in December. It looks like I’ll have to swap it for Chase British Airways Visa. I hope to redeem Avios for our next trip to Europe to visit my family. I’d like to fly out of Dusseldorf to Fort Myers, where the route costs 25,000 Avios on Air Berlin with no fuel surcharges.

So, it looks like it might be wise to pick up 2 Chase BA Visas, one in mine and the other in my husband’s name. After that, it will be Southwest cards’ turn…again. Don’t worry, Marriott, I’ll get to you too eventually. You know, I have a soft spot for miles. But I love hotel points too! That was crazy Julia talking.

Anyway, my point is: There are plenty of offers to go around, at least for now. In a way, it will make things easier for me. I won’t have to wonder where to speculatively transfer Ultimate Rewards from my husband’s CSP before canceling it. What, you didn’t think I would actually renew it, did you? There is a lot of talk about how you should hang on to your Ultimate Rewards-earning cards because you may not get approved for them again. Tune it out.

If CSP wasn’t worth paying the annual fee before, then really, what has changed?  To me, nothing. I’ve cancelled both mine and my husband’s  cards in the past when Chase had 1 bonus/per lifetime rule (reportedly not enforced). Of course, as I’ve said many times, I constantly switch cards, so will only renew those that give an annual perk.

Most (normal) people are not like me. Honestly, while the ROI is unbeatable when you collect sign-up bonuses, it does get a little crazy trying to constantly juggle cards. In a  way, I secretly hope the banks will cut off churners like me, so I could just get a few good cards and call it a  day. Yup, I’m a glutton for punishment. Why do you think I got into miles and points blogging?

So, you may wonder, what would those cards be? I would probably try to pick up Amex Blue Cash Preferred and Amex EveryDay Preferred. You can read more on them in this post where they are my top picks for a middle-class family. Both have annual fees, but the perks and earnings justify them, at least to me. I would try to purchase Visa gift cards from a grocery store ($500 using each Amex to maximize the payout ratio) and use those for my regular bills that total $1,000 each month. Things like power bill, donations and other stuff I can pay online, no big-ticket items that may need purchase protection. I would use Amex Everyday Preferred for gas and everything else.

My husband gets annoyed by the fact that Amex is not accepted everywhere, so I would probably try to convert one of our Citi cards to Citi Double Cash. Alternatively, I would ask him to use Chase Freedom for everything. When you factor in the fact that it earns 5% on rotating categories, the overall return would probably be close to 2%.

But guess what? I doubt this plan will materialize any time soon. I just picked up Citi Prestige that comes with 50,000 points sign-up bonus. I wrote about it before so won’t repeat myself. It actually has some decent perks which I hope to test out on my upcoming trip to Europe. It comes with complimentary Priority Club lounge access, so  it looks like we will be having “dinner” and alcoholic drinks  in   Dublin and Munich airports. I wouldn’t pay for this perk, but it’s certainly nice to have. You better believe I’ll get my money’s worth in complimentary snacks and booze. In August, I plan to apply for this card in my husband’s name as well.

So for now, other banks seem to accept churners like me with open arms. For how long? Who knows. I sure don’t. But I’ll ride this gravy train for as long as I can. My focus will simply shift to Chase co-branded cards. When the new policy trickles down to those, I’ll focus on Citi and American Express. When Citi and American Express cut me off, I’ll move on to Bank of America and Barclay’s. When no bank will have me, I’ll try to maximize rewards with the cards I currently have or try to convert them to the object of my desire. I look at this hobby as a  windfall, not an entitlement.

What does this mean to you?  

Well, if you are just starting out, it does make sense to get Chase Sapphire Preferred first. Gary Leff was right! You don’t know who he is…yet. Anyway, the barrier to entry is a bit high since it requires $4,000 in spending to get the bonus. If you can easily manage it, great! I envy you because I want this card and I can’t have it. Which in turn makes me want it even more.

If you can’t (don’t want to) have this high of minimum spending requirement, it’s OK to pass on CSP. Perhaps, Chase Freedom might be a better choice. With the latter, you only need to spend $500 in 3 months, something most people can easily achieve. Right now, the sign-up bonus on Chase Freedom is increased, which makes a further case for it.

Plus, you’ll gain a decent no-fee  long-term card. Later on, if you decide to get CSP, you can combine the points and transfer them to a  variety of partners. It would probably be wise not to add your SO as an authorized user unless absolutely necessary, in case you plan to drag him/her into this hobby eventually. And you probably will. It’s addictive as heck!

If you are a type of person who only gets few cards every 2 years, this new Chase policy  shouldn’t really affect you. Chase isn’t trying to turn all new customers away, but only those who they perceive to be unprofitable. Whether this new formula sticks around is anyone’s guess. I have to say, it’s very savvy of Chase to go this route. Thumbs up! I wonder why it took so long. Of course, it’s bad news for people like me, but from a business perspective it makes perfect sense.

If you are a true churner (guilty!), don’t fret. Like I said earlier, you will lose out on flexibility provided by having  Ultimate Rewards points. There is a  silver lining, though. It will make it less appealing to hoard points, and that’s a good thing, right?

I certainly will not change my   upcoming plans. I’ll still transfer some of my husband’s Ultimate Rewards points to Southwest so we can take my parents to Puerto Rico.  We churn cards so we can afford to travel. And travel we will.

Readers, what are your thoughts on this new development?