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Smart Way to Open Credit Cards

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It's not smart to just apply for everything to get the sign-up bonus points. You need to come up with a good strategy.

Here are some things to think about:

  • The minimum spend requirements
  • The annual fees
  • When you plan to travel
  • Card issuer policies

We'll go over each of these in more detail below.

Minimum Spend Requirements

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Remember that you must spend a certain amount of money on your card in order to get the bonus points.

Usually, the minimum spend will say something like this: "Spend $4,000 in the first 3 months of account opening and receive 50,000 bonus points."

So you do NOT want to apply for multiple cards at once and then have trouble meeting the requirements. Or overspend and get yourself into debt that you can't pay off.

Most of the minimum spend will require you to spend over $1,000 per month. Unless you are a huge spender, it may be better to just focus on opening one card at a time.

If you have a spouse, you can stagger opening credit cards to possibly get more points faster. Another plus is that you won't have as many credit card applications in your name.

It would look something like this:

  • You open a new credit card
  • Use it on all household expenses until you meet the minimum spend requirement
  • Your spouse opens a new credit card
  • Switch to putting all household expenses on the new card until you meet the minimum spend requirement

Meeting the Minimum Spend Requirement

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Let's talk briefly about how you can meet this requirement. Here are some ideas:

  • First, put literally all your expenses onto the new card. See if you can put your utilities, cell phone bills, rent/mortgage, gym membership, student loans, etc., all on the card. If you can, you'll easily meet this requirement.
  • Pay in advance for future purchases. Some ideas are holiday/birthday gifts, a year's worth of car insurance, a year's worth of toilet paper, etc.
  • When you go out for meals with friends or coworkers, pay for it with your card and get cash back from them.
  • Try peer-to-peer lending (like Prosper). You'll also make a little bit of money on your investment over the long run. Score!

Read for 23 ways to meet the minimum spend requirement.

The Annual Fee

Most travel reward cards have annual fees, though some are waived for the first year. You may be tempted to sign up for many cards over a year, but remember that you'll have to pay for the annual fees later.

So if you open up 4 new travel reward cards, each with annual fees of $95, you'd be paying almost $400 for the cards the next year.

When Do You Want to Go

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You will need to start your card strategy well in advance of your actual travel plans.

You need time to apply for cards and meet the minimum spend requirements to receive the bonus points. This is at the minimum 3-4 months.

If you want to take your family of 4 on vacation, you will need time to gather even more points. You may need the bonus points of 3 or 4 cards if you're going somewhere like Europe.

And there is one more very important thing to know:

If you're booking a flight with points, you usually need to book it far in advance. The earlier you book, the higher the chance of having award seats available. Most airlines allow you to book as early as 11 months before departure. Do it as soon as you can.

Card Issuer Policies

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Card issuers also have their own application and bonus points rules:

  • Chase 5/24 rule: If you've opened 5 or more cards (even if from another bank) in the last 24 months, you probably won't get approved.

    This applies to all of Chase's Ultimate Rewards cards, Chase United Mileage Explorer cards, and Chase Southwest cards.

  • AMEX 90-day rule: You cannot be approved for more than 2 credit cards within 90 days. This rule applies to credit cards only. Charge cards are not part of this rule.

    AMEX also has a Once Per Lifetime rule. If you've opened a card, closed it, and later tried to open it again, you will not receive another bonus.

  • Citi 24 months rule: If you've opened or closed a card, you cannot get the sign-up bonus again within the same family of cards for 24 months. This means that if you sign up for one of the ThankYou cards, you will not receive another bonus if you sign up for a different ThankYou card (within 2 years). But you can get a Citi AAdvantage card and get another bonus.

    This rule applies to ThankYou cards, Citi AAdvantage cards, Citi Hilton cards, and Citi Expedia cards.

So here is our suggestion:

If there is one of the Chase cards you are very interested in, prioritize that application above all others. This way, you maximize the chance of getting one of the Chase cards before you reach the 5/24 limit. After you've applied for all the Chase cards you want, then work on cards from the other issuers.

Chase Sapphire Preferred lets you earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®. You can earn 5,000 bonus points if you add your first authorized user and make a purchase within the first three months from account opening. This card lets you earn 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide. The points can be transferred 1:1 to leading frequent travel programs including airline transfer partners. The card has a $0 foreign transaction fee. The card also comes with premium travel and purchase protection benefits (including trip cancellation/trip interruption insurance and auto rental collision damage waiver). There is a $0 intro annual fee for the first year, then $95.

Will Opening So Many Cards Hurt My Credit Score?

Every time there is an inquiry into your credit score, it will be impacted a little. Of course we don't recommend that you apply to a bunch of credit cards all at once, but if you have excellent credit, applying for a few over the course of a year or two is reasonable.

Key Takeaways

  • Make sure you apply for cards in a way that you can meet the minimum spend requirements.
  • Be aware of the annual fees and think about if you travel enough to justify them.
  • Start applying for cards way ahead of when you want to travel.
  • Prioritize Chase card applications.

By this point, you should have a basic understanding of how travel rewards work and the different cards. Maybe now you even have some in mind.

Tomorrow, we will dive into how to best redeem points for flights.

Editorial Note: This content is not provided by Chase. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by Chase. This site may be compensated through the Advertiser's affiliate programs.


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About CreditDonkey®
CreditDonkey is a credit card comparison website. We publish data-driven analysis to help you save money & make savvy financial decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.