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This is a paradox I recently encountered - using credit cards can create another asset in the form of airline miles. A friend who is currently a college student
by stephengillie 9y ago
This is a paradox I recently encountered - using credit cards can create another asset in the form of airline miles. A friend who is currently a college student (and just left a summer job as a postal carrier) used airline miles to pay for a weekend in a very nice hotel. At full rate, his few days would have cost more than a month of rent at my luxury apartment. He earned these miles through his ~20 airline-mile credit cards, and so now I'm researching how to game this "free to play" system.
- skinnymuch 9y agoYep. I put my brother in a bad spot. It doesn't really hurt him much right now but I messed up some business work using CCs under his name. With his permission of course. I can't pay them off right now, but I've managed to get my credit score close to 800. So I'm going to be getting a couple of credit cards and balance transfer my debts over to myself. All the decent or better CCs I've seen, offer pretty nice opening offers. I'll definitely be taking advantage of the "spend $3K in 2 months and get $500" sort of deals and pay off those balances. It'll essentially be free money. Like churning you said, Reddits churning subreddit provides a lot of info. Not sure if there are other good communities, but that seems good.
- tertius 9y agoSpend $3k and get $500 in rewards... Why not just spend $2k instead? Maybe spend the time increasing your income. (I have done this... Rarely would the hassle.)
- kinkrtyavimoodh 9y agoBecause you are probably spending 3K in 3 months anyway. If you absolutely aren't (or you can't hit the minimum spend in other ways [pay for your friends etc.]), sure, don't get the card.
- tertius 9y agoMore work: - cancel the card because yearly fee. - pay tax on churned $. - shorten cumulative account age (lowers credit score). I've done this... Not worth it. Focus on more important things.
- kinkrtyavimoodh 9y agoOne card with a yearly fee is probably worth it for the other benefits. Other than that, the traditional way is to downgrade it to a free card. Either way, it's fine if you think it doesn't make sense for you, but it's pretty much no-hidden-costs net positive, and that's why so many people actively churn.
- tertius 9y agoI understand why. Semi-free money. Invest in increasing your income instead. That's my recommendation. Long term thinking.
- skinnymuch 9y agoCan't you do both?
- tertius 9y agoThe older you get the more you realize how important it is to focus. Specifically long term.
- skinnymuch 9y agoI'm spending the money anyway. Don't see the issue in this case.