Capital One Visa Cardholders - Free "Purchase Eraser" Program for Air Miles!

[mikeycanuk]

That is another downside to churning, my credit score doesn't matter to me so I cancel and apply at will!!!!

 

[KeithG]

Doesn't canceling a credit card ding your credit score? I've seen advice not to cancel: Why you should almost never shut down a line of credit | Clark Howard and How does opening and closing credit cards affect your score? | Clark Howard. But if you start playing the game of acquiring new cards just for the initial benefits, you end up with a lot of cards, which would make me concerned about losing track and opening myself up to fraud, identity theft, etc.

lots of things can affect your credit score. the following types of things require a credit check to be performed:
- applying for a credit card
- buying a new car with some financing involved
- switching cell phone providers!
- becoming treasurer for a local charity or volunteer group!
A credit check negatively affects your credit score. But not as much as being late on a payment, defaulting on a loan or declaring bankruptcy

The real question is do they really affect it in a way that matters?

It is "good" to have a long history of credit, but in Canada only 6 years is considered. I recently cancelled a no fee credit card that i had since 1981. This had no effect on my credit score since i had not used the card in more than 6 years so it was no longer on my credit history.

Credit ratings are a game.

 

[mmmbelows]

agreed if you simply look at the long term "spend" return.
BUT: as mikeycanuk points out, you can get ahead of the game by taking advantage of "new client signup" bonus miles available when you get yet another new card. AMEX also has referral bonus points system. so you can get points cheaply by churning cards.

In my aeroplan world, "most" signup bonus are 25000 miles for $120 yearly fee as long as you spend about $500 on the card in the first 3 months. There is an amex card available that will waive the $120 fee for the first year. so that is 25000 free miles. the scheme is to apply for the card, use it for a short period to qualify for the bonus and then stop using it and cancel it before the end of the year. then do it some more.

the 25000 aeroplan miles gets me a return economy flight anywhere in continental US and Canada.

So dumb question maybe, but how do you acummilate enough points to make the churn help you? What I mean is you can't transfer the points from one card to another can you? So if you're trying to buy a couple of tickets that cost a total of $3000, you can't use 1/2 the points from one card, 1/4 from another and 1/4 from a third can you? Maybe answering my own question, but I'm guessing the churn doesn't work when you're trying to buy some expensive international tickets? Or am I missing something?

 

[KeithG]

So dumb question maybe, but how do you acummilate enough points to make the churn help you? What I mean is you can't transfer the points from one card to another can you? So if you're trying to buy a couple of tickets that cost a total of $3000, you can't use 1/2 the points from one card, 1/4 from another and 1/4 from a third can you? Maybe answering my own question, but I'm guessing the churn doesn't work when you're trying to buy some expensive international tickets? Or am I missing something?

Good point! You do need something to "anchor" your points to.

Best plan is to have something not related to THAT credit card. OR a predefined mechanism that allows you to transfer credit card points somewhere more permanent.

In my case I have an aeroplan account (since 1991) that I provide when cracking a new credit card. The new credit card gets linked to my existing aeroplan account. "rewards" are banked into my aeroplan account, not my credit card account. My credit card has no built in rewards system, it relies on the aeroplan partner.

For my aeroplan credit card, each month when I pay my balance, miles get swiped into my aeroplan account. $1 spent = 1 aeroplan mile. Plus I get some bonus miles (about 10%) from my credit card company - I am not sure the exact details of the bonus.

When I buy gas from Esso (an aeroplan partner) via any payment option I immediately get miles credited to my aeroplan account. I am not sure of the exact formula, but I get 3 entries for every fill: esso aeroplan miles, supreme grade bonus miles (we use 91 octane) & esso 2015 double miles bonus. Works out to a little more than 1 mile per $ spent. Because I use my aeroplan credit card to buy this gas, I also get 1 mile per $ at the end of the month from my credit card - double dipping!

If you have another "reward card" you need to make sure you have a means to transfer your points. Personal Amex Reward cards allow a free transfer of 1 point = 1 aeroplan mile. So for Amex points cards you need to realize all of your signup points and then transfer them to aeroplan (or somewhere else...) before you cancel.

Amex corporate cards also have a feature you can buy ($120 per year) where the Amex points belong to you and not the company. My divebuddy was recently forced into this world (she used to use her personal card for business expenses). She paid the fee and will tranfer her Amex points into her aeroplan account: 1 point = 1 mile.

The bottom line is that you need to adopt a "credit card" brain and charge everything you can towards a single rewards stream. Buy some mouthwash? Credit card! Down payment on a new car? Credit card! (this caused an issue once when we tried to purchase the whole car on our credit card!)

---------- Post added June 7th, 2015 at 11:15 PM ----------

And this "scheme" only really works if you can charge enough to stay ahead of the game. If you belong to a reward system where "old" points expire, you need to sit back & do some math. Getting & keeping points are 2 different issues. Could be a waste of time?

In the old days aeroplan points expired after 7 years. Taking 10 years to accumulate enough points to get that first class round the world trip would never work. The "new" current aeroplan scheme retains all of your points as long as you have been active in the last 12 months. For me, this means I need to buy gas from esso or make a credit card payment at least once a year. Not a problem for me. Easy to keep my points!

We have another reward system here called Air Miles that still expires old points. I did the math once and tossed my cards. After 10 years of monthly buying lots of booze via the LCBO i still could not get a ghetto blaster. Based upon my spend ability, my points expired faster than I could accumulate a critical mass.

All of these reward systems are based upon your ability to spend and pay for large amounts of expenses. The majority of the population can not do this.

This could be an example of the rich getting richer?