Two New Credit Cards to End 2012

As I’ve mentioned before, I’m a bit of an addict when it comes to frequent flyer miles and loyalty points, as I’ve been successful in turning them into quite a bit of free or discounted travel for my family.  One of the easiest ways to build up your mileage balance is to apply for credit cards that have signup bonuses.  You’ve probably gotten that annoying junk mail envelope promising “50,000 miles on [your favorite airline of choice] for spending $2000 in three months.”  About two years ago, I uniformly shredded these offers, but I started paying more attention in the last 18 months.  It has been a decision that has really paid off!

Of course, you have to have good credit to be approved, and there are also limits to how many credit cards one bank will extend.  There are folks that take this hobby of “credit card churning” very seriously, but I only do it casually.  This conservative approach has worked well for us.  Why?

First, our credit has been almost completely unaffected by the new cards.  This has been crucial when the time has come for us to refinance our mortgage — with rates dropping as much as they have been the past several years, my husband and I have refinanced once per year just to grab a lower rate.  Had we overdone it on the credit cards, we might not have been able to take advantage so easily.  And as tempting as those miles are, nothing beats lowering your mortgage payment each month by hundreds of dollars.  Don’t lose the forest for the trees!

Second, our conservative approach has worked because we’ve been able to get different cards at different times and stagger the benefits for our whole family.  Most cards waive the annual fee for the first year, so we tend to have one of us hold a given card for just under a year, and then we cancel and the other person applies for the card.  This is especially nice when cards come with free checked bag benefits… as long as one person in your party has the card, then everyone on your reservation gets the free bags.  This extends the benefits for everyone in my family and allows both my husband and me to accrue big signup bonuses over time.

The last card my husband or I applied for was back in December of 2011, when I got the United Mileage Plus Visa card.  Needless to say, it was about time to try something new!  Earlier in the fall, when I found myself about to book Christmas flights to my hometown on American Airlines, I decided it was time to spring for the AA Citibank credit card.  The signup bonus wasn’t fantastic (30,000 miles), but it also included a $100 statement credits towards American Airlines flights and it came with a free bag benefit.  Since I knew my family would be checking at least two suitcases at Christmas ($25 per bag each way), that offered us another $100 in savings.  We will probably fly American at least one more time in the coming year, so the free bags will be helpful yet again.

But I didn’t stop there!  It is often advantageous to apply for more than one card in one day, as issuers will pull credit at around the same time and not “see” the new credit pulls on the same day that may result in a temporary credit score drop.  In October, my husband’s Southwest Airlines Chase card was also nearing its one year anniversary when the annual fee would hit, so I took the opportunity to apply for the Southwest card myself since the signup bonus was at its best at the time.  The card came with 50,000 signup points, worth $833 in Southwest fares.  We cancelled his card a few weeks later to avoid the fee and will enjoy still being about to earn Southwest points.

So, I’m starting 2013 with two shiny new cards and an extra 80,000 points.  Happy 2013!