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Comment by tempsy | Hacker News Reader

The American reward credit card "game" has made it really easy to travel at near zero cost. Since 2012 I've applied for, on average, about 5-10 new cards/year that come with extremely generous hotel, airline point, and travel cash rewards. I've taken international first/business class many times for free and stayed in very nice hotels that can average $500/night+. I seriously can't remember the last time I paid for a flight or hotel unless it was a very good deal.

The US is different in a lot of ways, but the insane generosity of rewards credit cards over the past 8 years or so (post recession) is something to behold. I can't imagine it will last forever, but grateful I've caught it as a young adult.

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A household must first have the disposable income to utilize those types of cards in order to get the rewards, which makes your plan a complete non-starter for millions of Americans. Not to mention the required level of organization and financial savvy required to not let that type of credit card wheeling and dealing bite you in the ass.

Honestly I think there are lot of people making enough money but just spend it all and not save for a rainy day. Just how many high end trucks and SUV you see people driving. Or expensive phones. Or eating out at expensive places.

As another credit card churner, there are a couple of notes I can add: 1. Always pay your card in full on time.

2. Signup bonuses are the only aspect of churning that is worth it to most people. If you can manage to spend $3000 on a credit card in 3 months, you can get signup bonuses that are definitely worth your time. $4000 or $5000 levels in 3 months exist as well and are better. Typical signup bonuses can be worth $500 at the $3000 level, representing a 16% discount on everything you buy.

3. You can pay your federal taxes on a credit card for a 2% surcharge, and most state taxes as well for a similar charge. This is best done as estimated quarterly taxes. Minimize your withholding at work to maximize the value of this. You can pay your utility bills ahead of time for free as well.

4. If you don't go for airline miles, the other option is cash back rewards.

5. An easy way to keep track of the cards: every time you apply for a card, take screenshots of the date and bonus criteria from the signup website. Save this in a google drive folder with the date in YYYY-MM-DD as the start of the folder name. Now you can easily track cards by date, and cancel them as needed.

Well now I hope I've made a few people a bit more savvy.

It's hard for me to believe (3) could be worth it. Do any cards give more than 2% in cashback?

This is about churning, not regular rewards. Sign up for a new card, pay taxes on it among other things to meet the spending requirement for the signup bonus, get “free” $$$ for things you have to spend anyway.

Except you don't get “free” $$$ for things you have to spend anyway...

You get points you can use for vacation or travel.

If you NEED to vacation or travel, it IS simply a smart transaction. But if you weren't spending money on travel before than it can still result in increased expenditure even if managed perfectly.

The point is the bonus points for spending x in 3 months not the points for the spend. 60k bonus points for the first 4,000$ spent is definitely worth..most points are 1.5 cents or so.

Yes, this is a well designed system that letting the "poors pay for riches". All the customers pay for the system, and only high incomes can easily use the benefit.

> All the customers pay for the system, and only high incomes can easily use the benefit.

All the customers who don't pay their credit card bill in full every month, yes. Do that (i.e., don't spend money you don't have) and you too can benefit.

This reads like a moral justification of usury.

Every transaction has a fee which finally paid by everyone.

Doesn't opening that many accounts every year hurt your credit score?

A little bit but not substantially (I have a 760+ score as of today). The effect goes away after a few months. Plus I pay them off immediately.

Only to a certain extent. It's largely outweighed by the amount of benefit your credit score is receiving by eventually having multiple aged accounts. What the OP is describing is essentially a way for people to trade points from their credit score (provided people are at a level of disposable income to start playing this game) for straight up cash or loyalty points.

> Doesn't opening that many accounts every year hurt your credit score?

Yes.

However, you'll still be in the 80th+ percentile of credit scores. Additionally, the number of applications you've made contribute only around 10% to your credit score.

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