What Is Your Credit Card Points Yearly Strategy?

shapebuster on 09/05/2021 - 19:49
Last edited 09/05/2021 - 20:40

I am pretty new to the whole credit card points strategy and I am keen to learn more! I'm reading of people churning through cards from different institutions within one year. What does this mean? Are they simply cancelling and getting a new card from a new bank every few months to get the points? What is your strategy when it comes to this. What are some items that you cannot use the card to pay?

I have just bought a place and will be buying furniture so I figured it might be a good idea to jump on a credit card given I have large expenses coming. What would you suggest is a good credit card to start off with? Thanks in advance!

Financial Credit Card

Comments

  • Presence on 09/05/2021 - 20:03
    +2

    I am keen to know too. I literally put every expense through my credit card and have never paid any fees or interest. Swapping between cards sounds like a huge pain for automatic payments TBH.

    • shapebuster on 09/05/2021 - 20:07

      Ah yes, this slipped my mind. Maybe it's best to direct debit payments that are annoying to setup via card.

      • knasty on 10/05/2021 - 13:05
        +1

        Yeah I churn and burn but leave the recurring stuff on a mortgage-product linked card just because I got too lazy updating al the payments. If they have a .8% fee or higher I often just to a bank account DD and forget about it (the regulars are pretty low in $ terms annually).

  • Donaldhump on 09/05/2021 - 20:25
    +2

    Setup d/d off a permanent savings card to avoid hassle.
    Get c/c, do spend, get points, dump it, get another, repeat.
    Keep spreadsheet of cards, and as of now I have a 2 year cycle going, not sure what min periods are but 2 years is safe.

    If you are short of things to spend on, queue up woolies gift cards, pay your electric up front, pay your d/d subscriptions up front few months, if you ever fall behind your savings card takes over.

    • ozbargainsam on 10/05/2021 - 13:48

      Keep in mind that paying for things upfront means you can't really play the churn game that effectively. If you need to pay for 6 months of spending to cover the minimum spend, then you're effectively blocked from doing it again for the next six months.

      • Donaldhump on 10/05/2021 - 17:27

        Just request a refund of credit and you get a cheque in the mail, or get it back on the c/c, works for electric companies, or go one step further change electric provider get a better deal, and the old company can send you cheque.

        I don’t bother can usually find things to pay for, and don’t play the game as aggressively as others, I only do two a year.

        Can even book hotels on Expedia and then request refund, did that one many moons ago.

  • gidxg03 on 09/05/2021 - 20:26
    +7

    I churn cards for Qantas points. I’ve been doing it for about 2 years now and my Qantas balance is 1.2M and that’s after redeemeding about 250,000 on an upcoming return business class flights to Perth from Melbourne. Out long term goal (was! Pre COVID) to fly business class round the world for 318,000 each.

    The major card players are Westpac, NAB, Qantas Premier, ANZ, Amex and Bank Of Melbourne (or St George which are the same bank). For each of these you’ll get between 60,000 and 120,000 points annually but card fees will range from $0 to $500. Most of the cards have a 12 month period in which you can only earn the signup bonus (exception of Amex which is usually 18 months).

    So for me I track everything via a spreadsheet and apply for each card every 12 months. I put all my expenses on the card and then cancel once reaching the spend requirements and when points are awarded. I reapply again in 12 months.

    • shapebuster on 09/05/2021 - 20:39

      Thanks very much for your informative reply. Hugely appreciated

    • hentabara on 09/05/2021 - 21:03

      I believe it will affect your credit rating. Have you checked that?

      • Randxyz123 on 09/05/2021 - 22:49
        +1

        It doesn’t really. I have a similar strategy to above but don’t instantly cancel or haven’t in the past. Usually this is because I’ll want to use the travel insurance/lounge vouchers/travel vouchers included with the card.

        Amex also has decent enough offers/cash back schemes that make it worth holding onto.

      • Pelicannn on 10/05/2021 - 05:05
        +2

        Can confirm it’s really not a big deal. Applying for and getting rejected would certainly be a negative, so just apply and go for the minimum limit to reduce that chance

        I churned about 5 cards in three years and all I did was cancel the last one before applying for a home loan. They asked if I had any credit cards and I was like ‘nope just cancelled’. They asked for the previous 3 months of statements and that was the end of it.

      • gidxg03 on 10/05/2021 - 08:04
        +1

        Still very good.

    • Kunalk222 on 10/05/2021 - 01:32

      Good job 1.2m !!

  • Gracey on 09/05/2021 - 21:01

    One thing to keep in mind when applying for multiple credit facilities is every inquiry is logged on your credit file and will reduce your credit score.

    Maybe not an issue for you, but certainly something that can affect loan applications in the future.

    • Drakesy on 10/05/2021 - 11:19

      I feel this is more fearmongering.
      In the 3 years of multiple credit enquiries and back to back rejections my score's never dropped below excellent.

      • Gracey on 10/05/2021 - 13:05
        -1

        Its not fearmongering. There's more to credit scoring than the free site that's telling you your score is excellent.

        Your equifax score is most likely dropping. There's also multiple different internal scoring systems that lenders use to determine your score. As other posters have said, its not necessarily a dealbreaker, but multiple enquiries in a short space of time can be a red flag.

        • Drakesy on 10/05/2021 - 13:13

          Only thing was it was my Equifax score i was checking.

          Along with other sources, they've all held up, even going up in some cases after taking out a card

  • Kunalk222 on 10/05/2021 - 01:32

    Don't apply multiple cards at the same time as it affects the credit score. Banks think you are at distress to apply more than 1 card.

  • Pelicannn on 10/05/2021 - 05:36
    +6

    That’s really it. Just keep an eye out for some decent sign on bonuses with each institution. Plus don’t forget referrals. If you have a partner, sign them up too. If you get the sign on bonus, and a referral bonus and sign your partner up, between you could be 270,000 points in as little as 3 months. If you don’t think you’ll meet the minimum spend, get it on one card, then wait a few months and sign them up so you get another three months and just use the one card. Meeting minimum spend is also relatively easy if you have the savings, for example: buy gift cards to Woolworths etc worth $500 x 6. Then use said cards to pay for petrol and groceries for the next year etc. can also pay rego for cars in advance, I paid my Telstra phone bill for 6 months in advance once to meet the spend. Or consider lining up the card with a big purchase you know might be coming in the future too.

    If you wanna get real dodgy, just book a refundable holiday for twelve months away, pay up front, get the points, then refund and cancel it haha.

    I was signing up people with Amex who were giving me 30K FF points per referral with a cap of 200K per year for referrals or so definitely convince your mates to jump on board.

    As for credit rating, I made over a million velocity points in 3 years doing this with absolutely no effect on my ability to get a home loan burning cards. Just make sure you follow some simple rules.

    • apply for one at a time.
    • go the lowest limit available if you don’t need bigger (they will always offer to increase it or give you higher than you need).
    • make sure you’re always only spending your money and never pay interest.
    • not 100% sure on this having an effect but I never did a balance transfer. Always pay off the card before cancelling it.

    As soon as I bought something large on my CC I would transfer the money from my savings. These deals are good to lure you in, but they are only able to offer them because some people will:

    • not meet the spend and pay an annual fee for nothing or
    • not pay off their balance and accrue interest.

    Don’t be either of those people. That’s how they make their money

    Lastly - use your points wisely. Business or better class is the best value for redemption. I travelled every where in business class with those points in the past few years. Trips to Malaysia, Singapore, USA, NZ etc all in Virgin/Singapore airlines business class and easily around 5c per point value in some cases (comparing points spent to the normal cost of that flight). If you buy economy reward seats it’s around 2c per point value and if you’re just going to use it to buy gift cards it’s almost not worth your time.

    Always try to score reward seats. I will fly a day left or right to secure a reward flight to make my points go the extra mile.

    Good luck :)

    • mbck on 10/05/2021 - 12:13
      +2

      Is it better to buy economy and then use points to upgrade to business class, or just straight up redeem for business class

      • capslock janitor on 13/10/2022 - 00:19

        Good question @toshjammi?

      • Pelicannn on 13/10/2022 - 00:21

        Hi mate, sorry for late reply. It depends on the ticket you buy as to how much the upgrade is. Generally though, always better to use straight up points on a business classic reward flight.

  • blueyez on 10/05/2021 - 09:52
    +2

    Churning just means applying for a card for the bonus points and cancelling it once you've received them. As each card is different you might want to hold onto it a bit longer (personal preference etc)

    Each card would have it's own exclusions - ie. you might not earn points for certain bills etc.

    There are so many cards and deals. I would recommend trying to find a $0 or low annual fee card with a decent sign up bonus - however your income and what you want to spend money on etc are also a factor so my recommendation might not suit your needs. Also keep in mind that a high sign up bonus (100,000+) might be worth forking out for the annual fee for. I think the offer finished but I signed up for 75k points with ANZ with a $0 annual fee a few months ago - some cards have 'cycles' or otherwise you just wait for a deal you think is good enough to go for. Some cards have other perks you might use (free travel insurance or screen protection etc)

    I found Point Hacks very valuable when learning about credit cards and the different point systems - https://www.pointhacks.com.au/

    Most banks have a 12 month exclusion policy - so if you received a bonus in the last 12 months you need to wait before becoming eligible for the next. So people just pick cards issued by different providers.

    Amex has an 18 month wait - however David Jones Amex is separate to their regular cards, so you could use that to your advantage to get a regular Amex then get the David Jones one whilst you wait to become eligible for your next lot of bonus points.

  • Drakesy on 10/05/2021 - 11:24
    +1

    Churn and burn

    Take out card,
    Reach spend target
    Acquire points cashback
    Cancel card at earliest opportunity.

    Repeat through different provider.

    Fly around the world in business class.

  • Lunarboogie on 10/05/2021 - 13:52
    +2

    Agree with all these points. Always select the minimum credit limit as this can add up quickly. I have been doing this caper since my second kid was born and he's now 7. I have racked up millions of points in that time and travelled first class around the world, numerous times (them were the days). And my rating has never fallen below very good. I have even gotten two mortgages and recently renegotiated another, so churning has had nil impact on my borrowing capacity. I only have two cards at any time, which means I have to cancel one before getting a new one - no science behind it, just a rule I've come to live by. Having two means you always have at least one on the go. Good luck grasshopper!

  • Rafski on 13/10/2022 - 12:15
    +1

    I found this website on Ozbargains: https://www.rwrds.com.au/

    Now I just pick out the cards with the best reward return. I stick with a card for about 9 months then switch (in theory you would be better off to switch as soon as you hit the bonus).

    I do pretty much every payment through the credit card. Some stores do charge a surcharge such as Aldi - but I don't worry about this as the overall return will be greater than the surcharge.

    And I've got a list of all the direct payments so when I switch cards I just go through the list and update payment details on everything.

    • Rafski on 13/10/2022 - 12:19

      I forgot to add, it's important to cancel before the 1st year is up as usually the fees for the 2nd year are higher if you keep a card that long.

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