Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Credit card fees - apply, get bonus, then cancel?
Old 01-16-2014, 12:11 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,331
Credit card fees - apply, get bonus, then cancel?

I recieved a CC offer for 50,000 miles used when traveling. But, it comes with a fee of $90 a year, which is waived for the first year.

Normally, I avoid cards with fees as I have never found them a benefit. But, this offer seems to be worth $500 in travel to me. I am thinking of getting the card, using the miles, and then canceling before my one year anniversary so as to avoid the $90 fee. It seems to easy. Has any body tried this and does it work
__________________

__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-16-2014, 01:04 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2011
Posts: 1,207
Yes it does work. I have gotten more than one of these offers, from different cards. I kept one card (the annual fee paid for itself with other perks). The others I cancelled within the first year, no hassle and yes I got to keep the perks I had earned.
__________________

__________________
mystang52 is offline   Reply With Quote
Old 01-16-2014, 01:23 PM   #3
Recycles dryer sheets
jetpack's Avatar
 
Join Date: Aug 2013
Posts: 317
I've done that, I'm sitting on a pile of points right now I need to use. Do keep track of when you need to cancel them. Also, note that opening more cards can negatively affect your credit score... if you need that sort of thing.
__________________
jetpack is offline   Reply With Quote
Old 01-16-2014, 01:51 PM   #4
Recycles dryer sheets
 
Join Date: Apr 2010
Posts: 269
Keep good records, set calendar reminders to cancel at the 11th month (or threaten to cancel, they may waive the fee). Over the last two years I average a new card per month, primarily for sign on bonuses.

You can also downgrade to no-fee cards, some of which are handy to have.
__________________
Sesq is offline   Reply With Quote
Old 01-16-2014, 02:11 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,603
It's not uncommon at all.

I took a Marriott Visa a couple of years ago to get a huge signing bonus. The card has an annual fee of $85, and I decided to keep it after the first free year. They guarantee me a free night at a Marriott hotel every year and that's worth far more than the $85 fee. Plus I still get all the points.

Some cards are better than others, but if you bother to read all the details (as I'm sure you would), there don't seem to be any downsides.
__________________
braumeister is online now   Reply With Quote
Old 01-16-2014, 03:19 PM   #6
Full time employment: Posting here.
GalaxyBoy's Avatar
 
Join Date: Jul 2009
Location: The Beautiful Blue Ridge Mountains
Posts: 852
I got a Hyatt reward card and took the two free nights at a $500/night resort in Kauai. I intended to cancel after a year but they give me another voucher for a free night each year. Unfortunately, they wised up and limit it to lower-tier properties but the free night is still worth more than the annual fee, so I'm keeping the card.

One thing to look out for is applying for multiple cards at the same time. I tried that with the Hyatt card and the United card, but since both are Chase they caught it and denied one. I also have a Chase Amazon card so I'm sure that didn't help.
__________________
GalaxyBoy is online now   Reply With Quote
Old 01-16-2014, 04:08 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
We've scooped up several thousands of dollars spending money we would normally spend to meet spending requirements to gain sign up bonus dollars from card companies. In fact, this Sunday we will drive over to Williams Az and take advantage of this little junket: Grand Canyon Discovery Package | Grand Canyon Railway & Hotel, Arizona The cost, after room taxes and such, will be $20 more than the sign up reward from a Barclays Arrival card. Granted, we will leave a day earlier to go through Congress and Prescott, and the whole trip will cost more when you figure in gas and such, but this seemed like a nice self chosen near-freebie. We'll be cancelling in a few months.
__________________
calmloki is offline   Reply With Quote
Old 01-16-2014, 04:10 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,331
I am concerned that the card offers miles not dollars. My Costco Amex rewards with dollars which keep their value. But this card offers miles. Today 100 miles equals one dollar. But there is nothing to keep them from deciding next month that it takes 120 miles to equal a dollar.

Has anybody found their CC miles or points being devalued?
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 01-16-2014, 04:13 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Most recently, Penfed decided it would take 30,000 points for a $25 credit rather than 25,000. I also like to convert to dollars.
__________________
calmloki is offline   Reply With Quote
Old 01-16-2014, 06:07 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,930
Quote:
Originally Posted by calmloki View Post
Most recently, Penfed decided it would take 30,000 points for a $25 credit rather than 25,000. I also like to convert to dollars.
is there an extra zero here?
__________________
kaneohe is offline   Reply With Quote
Old 01-16-2014, 06:52 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Quote:
Originally Posted by kaneohe View Post
is there an extra zero here?

By Gar - so there are:

PenFed Prepaid VisaŽ Reward Card $50
Item #: ECPFV50
5,900 points

The above is what I pull from their rewards Visa site tonight.
__________________
calmloki is offline   Reply With Quote
Old 01-16-2014, 07:23 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,331
One of my airlines is raising it's milage for a refundable coach seat by 2500 miles. Refundable first class is being raised by 10,000 miles. Each is for one way.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 01-16-2014, 07:59 PM   #13
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 1,823
The sign up bonuses sound great, but most of these cards have only mediocre rewards once you get the sign up bonus. There's no harm in keeping them for a year and then canceling. It's just a bit of extra work, but manageable.

One free night in a Marriott or Hyatt hotel sounds nice, but I'm guessing that most people stay for more than one night, so they are just getting you to spend money on their property by giving you a free night in exchange for a fairly high annual fee. It's still not a bad deal, but I see it more as a marketing tool to get people onto their properties and hope they spend a bunch of money once they get there.

The best overall card is still the Fidelity American Express card. It gives back 2% cash on all purchases, no minimums or caps, and no annual fee. I would still make this your mainstay card, and then use the other ones for the bonuses and perks that come and go.
__________________
Ready is offline   Reply With Quote
Old 01-17-2014, 12:27 AM   #14
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
I have never done that. Doesn't feel right.

Quote:
Originally Posted by Chuckanut View Post
I recieved a CC offer for 50,000 miles used when traveling. But, it comes with a fee of $90 a year, which is waived for the first year.

Normally, I avoid cards with fees as I have never found them a benefit. But, this offer seems to be worth $500 in travel to me. I am thinking of getting the card, using the miles, and then canceling before my one year anniversary so as to avoid the $90 fee. It seems to easy. Has any body tried this and does it work
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 01-17-2014, 10:22 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,379
Quote:
Originally Posted by obgyn65 View Post
I have never done that. Doesn't feel right.
You are too kind a person, Obg. CC's will try to get you if they could as they are always changing the rules of the game, too. Right now I currently have two 0% access checks written off the same CC, one expires late this year, the other one late 2015. Guess which one they are applying 90% of the payment toward? Yep, it would be the 2015 one even though I used it after the one due this year. They want to trap me into owing interest on the first when the 0% rate expires. But too bad for them as I will just write the check and pay them both in full at that point and they will not get a penny from me despite their tactics. FWIW I don't chase reward card offers but only because I'm too lazy to want to deal with tracking all the cards.
__________________
Mulligan is offline   Reply With Quote
Old 01-17-2014, 11:01 AM   #16
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 1,823
I don't see any issues with this either. The promotion is intended to get you to try out their card. They are hoping you will like their service and keep the card after the promotional period. Clearly they understand that by charging you a fee after the first year they risk losing you. If they really want to keep you they will find a way to make the second year appealing. If not, it's only fair as consumers to reevaluate the marketplace and see what else is out there.
__________________
Ready is offline   Reply With Quote
Old 01-17-2014, 11:07 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,331
Quote:
Originally Posted by obgyn65 View Post
I have never done that. Doesn't feel right.
The reality is that without the incentive I would never apply for this card. I would rather have the real $$'s that my other reward card gives me. But, they obviously want a shot at my business and are willing to put up some cash to get it. So, while the odds are I will cancel it before the end of the year, I will give them the opportunity to show me the card is more valuable to me than I think it will be. In return for that opportunity, they give me some $$'s. They certainly stand a much better chance of drawing me in with a financial reward, than with an advertisement featuring some hot young woman, wearing her bikini on a tropical island beach. I can't see a problem, moral or otherwise, with their choosing how to spend their promotional money, or me giving them the shot they want at my business.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 01-17-2014, 11:46 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,686
I'm conflicted about this one just like a lot of things in life.

Got a Chase Sapphire card a few years ago with a $400 bonus if you spend $3k in 3 months (still a pretty good bonus available). Collected the bonus. Kept the card as I like their service a lot. Maybe just a little too lazy to go shopping for another card.

You can actually talk to an intelligent American on the other end when issues come up. Clerks like the heavy card (has metal inside it) and new ones are chip+signature ready for European travel. No NTF charges, very good exchange rate when I used it.
__________________
Lsbcal is online now   Reply With Quote
Old 01-17-2014, 12:30 PM   #19
Full time employment: Posting here.
 
Join Date: Aug 2013
Location: North
Posts: 714
Free money! If you know when to cancel to avoid the fee's the benefits can be worth it...especially if you fly or stay in hotels a lot.

My ole man and I keep abreast on all of the latest cards and we earn a few free flights a year for both us and our spouses.

And yes, the consumer is at the mercy of the airlines rewards programs, redemption rates and blackout dates. Often there are unfortunate layovers as well.
__________________
kgtest is offline   Reply With Quote
Old 01-17-2014, 07:43 PM   #20
Full time employment: Posting here.
 
Join Date: Aug 2007
Posts: 892
Quote:
Originally Posted by Lsbcal View Post
I'm conflicted about this one just like a lot of things in life.

Got a Chase Sapphire card a few years ago with a $400 bonus if you spend $3k in 3 months (still a pretty good bonus available). Collected the bonus. Kept the card as I like their service a lot. Maybe just a little too lazy to go shopping for another card.

You can actually talk to an intelligent American on the other end when issues come up. Clerks like the heavy card (has metal inside it) and new ones are chip+signature ready for European travel. No NTF charges, very good exchange rate when I used it.

I'm in the same boat, except my year isn't over yet. I'm tempted to keep the card and pay the annual fee. Maybe I'll try calling them and see if I can get it waived for another year.
__________________

__________________
Eat, Drink and Be Merry.
tulak is offline   Reply With Quote
Reply

Tags
credit card


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 08:27 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.