Getting into rewards, I learned about “Mileage Runs” that people do to achieve particular statuses on airlines. But I hadn’t heard of this until the notion popped into my head. As you’ve seen, I’ve added a number of new cards to my wallet in the last couple of months.
I noticed that there was an untapped space in my rewards cards. There are a plethora (I love that word) of credit cards with $0 annual fees, earn cash back, AND have sign up bonuses when you meet their minimum spend requirements. What could go wrong?
Well, how about my credit rating?
Nope. Let’s take a look at how credit ratings are determined.
- On time payments. This has the highest impact on your credit score. If you make your payments on time and on schedule, you are off to a good start. The longer, the better.
- Available credit. High impact. Add up all of your debt, and divide by your total amount of credit. The lower this number is, the better.
- Average age of credit. This has a moderate effect on your score. As this number gets higher, so does your credit score.
- Total number of accounts. Moderate effect. The more the merrier.
- Credit inquiries. Low impact. As you ask for more and more credit, this has a small negative impact on your credit rating. Expect a small time dip in your score, but hold off on new cards for a while, and it’ll creep back up.
- Negative inquiries. HIGH IMPACT. If you do well on the above, you shouldn’t have to worry about this affecting you. Keep it at 0.
After opening 8 new cards in a two month period, I saw the following effects:
- Right off the get go. My score jumped 15 points as my percentage of available credit dropped.
- My score dipped 4-5 points as my credit inquiries increased and my average age of accounts dropped.
- Over additional time, my score crept up a couple of points.
Now on to the meat and potatoes. Keith! My man! What cards did you get? How’d those work out for you?
Great questions! I am glad you asked.
- Bank of America Travel Rewards Card – $265 towards travel
- Wells Fargo Propel Card – $450 Amazon gift cards
- Chase Freedom Unlimited – $158 deposited into my checking account
- Bank of America Cash Rewards Card – $207.55
- US Bank Cash+ Visa – $169 deposited into my checking account
- Barclaycard Apple Visa – $50 in Apple Gift cards (after buying a MacBook)
- Citibank Double Cash card – zip a dee do da
- HSBC Cash Rewards – closed this one. Horrible experience.
At the end of two months I made $1300 in my rewards. $1300 in two months!!! Don’t mind if I do!!!