60. 5 Questions You Can’t Ignore When Applying for a New Rewards Credit Card

Welcome to Point Me to First Class, the only show for employed professionals, entrepreneurs, and business owners who are looking to optimize their higher-than-average expenses to travel the world. I'm your host, Devon Gimbel, and I believe that your expenses are your greatest untapped asset if you know how to leverage them. Ready to dive into the world of credit card points and miles so you can travel more, travel better, and travel often? Let's get started.

Welcome back to the podcast everybody. I have talked before about how much the rewards credit card and award travel world has changed in the last 10 years. On the one hand, we now have more points earning cards than ever before to choose from. We're seeing higher and better signup bonus offers than we ever have, and rewards programs themselves are becoming more innovative with their bonus categories and transfer partner bonuses and other incredible offers. 

But on the other hand, we've also seen less positive changes like more restrictions around acquiring rewards credit cards, stricter card eligibility rules, and limitations on how many rewards cards you can hold or how often you can get them. 

Now more than ever this is a hobby that favors the intentional. Gone are the days when you could apply for a bunch of rewards credit cards in some random order without any consequences whatsoever. Instead, now you need an easy process to follow whenever you're considering applying for a new rewards credit card to save you from making a points mistake that you could end up regretting for a long time. That's exactly what we're going to talk about today. 

Specifically, I'm going to cover the top five questions you simply can't afford to ignore when you're considering applying for a new rewards credit card. These questions will save you from getting the right card at the wrong time, from getting the wrong cards anytime, and from accidentally making mistakes that could prevent you from earning the most points possible with new rewards cards or getting denied from the perfect card that will round out your credit card portfolio. 

So get out a pen and some paper and get ready to take notes. Unless of course you're driving, you're out on a walk, or you just don't want to. These are the five questions that you want to make sure to ask and answer before you hit the apply button on a new credit card application. So let's dive right in.

The first question that I always ask before I apply for a new points credit card is why this card? Now that may seem like a very simple or even obvious question, but it is such an important one to ask. Do you know why you want to get that specific rewards credit card that you're thinking of applying for? 

There are a lot of reasons why one particular card may have caught your eye and any one of them can be a great reason to get that card. But first, you want to make sure that you know what that reason is for you. Are you getting this card specifically to earn the signup bonus? High welcome bonuses can be an opportunity to quickly boost your points balance, either in a points currency you already have or in an entirely new points currency. Many card issuers will periodically offer increased welcome bonuses on certain credit cards. During these promotional periods, it can make a lot of sense to take advantage of the opportunity to earn more points than usual from a signup bonus. 

Now even if you don't anticipate using a particular rewards credit card for ongoing spend, getting it primarily to earn a signup bonus can be a great reason to apply for a new credit card. Or maybe the reason that you're planning to get a specific card is because that card offers a bonus category that is particularly useful for you and will allow you to earn more points on a category of spend that's high for you or that you can't currently earn bonus points on with any of your other rewards credit cards. 

This is exactly why I had my husband, I was about to say why my husband opened up, but the truth is I actually I had him open up the Chase Freedom Unlimited Card with double cash-back promotion last year in December. That card actually has no signup bonus whatsoever. But the bonus categories including being able to earn six times points on dining spend, six times points on drugstore spend, and three times points on all non-category spend were compelling enough to get the card anyway.

There is no one perfect rewards card that is going to offer high points earning on every single bonus category or category of expenses that are high for you. Most likely, you will strategically add rewards cards over time that allow you to earn the most bonus points possible for your areas of highest spend. So choosing a new rewards card specifically so that you can earn more points for gas, grocery, travel, or other spend can be a great reason to get a new rewards card. 

Valid reasons for applying for a new rewards credit card can go beyond just points earning though. Sometimes you may want to apply for a specific rewards cards that you can take advantage of a perk like lounge access. I have long argued that the personal American Express Platinum Card is not a strong points earning card. For most folks, I would highly recommend that you not put significant spend on that card outside of possibly purchasing airline tickets. But it could still be a worthwhile card for you if you value lounge access, and you frequently travel through an airport with an American Express Centurion lounge. 

Similarly, if your home airport lacks great lounge options outside of some airlines specific lounges, like for instance if your home airport is O'Hare, then getting an airline specific credit card that comes with lounge access can dramatically improve your travel experience. You may not anticipate ever putting much spend on the United Club Infinite card, for example. But if you frequently fly United, getting that card so that you can access United club lounges whenever you're flying that airline can be a great reason. 

Similarly, getting an airline co-branded card can make a lot of sense if you want to take advantage of some of the perks of airline status without having to qualify for that status based on miles flown or dollars spent with an airline. Many co-branded airline credit cards will give you access to perks like a free checked bag or priority boarding just for having the credit card regardless of your status within that airline’s frequent flyer program or what class of service you're flying. 

Similarly, hotel co branded credit cards can offer perks or benefits that you want to strategically include in your travel portfolio. Want hotel status without having to rack up a bunch of nights stayed or put a lot of spend on a credit card? Tons of rewards cards offer automatic mid-tier status in several hotel loyalty programs, and a few cards even offer higher tier status automatically just for holding a specific credit card. 

Carrying the American Express Marriott Bonvoy Brilliant card, for example, gets you complimentary platinum elite status in the Marriott program, which is the second highest tier of status in that program. Or you can get the Hilton Honors Aspire card from American Express, and that automatically grants you diamond status, the highest level of status in the Hilton program. 

Signing up for a new rewards credit card as a way to fast track yourself to getting status can be a great reason for grabbing a new card. Assuming, of course, that that's a program in which you would benefit from the status perks offered. 

Finally, your reason for getting a particular credit card at a particular time may be because that card plays a specific role in an award trip that you are planning. For example, the Marriott Bonvoy Boundless credit card from Chase recently had a welcome bonus offer of five free nights certificates after meeting the minimum spend requirement. Those free night certificates could be used to  book stays costing up to 50,000 Marriott points per night. So you could have gotten that card just to earn the free night certificates for an award trip at a Marriott property to completely cover the cost of your hotel stay. 

As you can see, there are a lot of great reasons to get different rewards credit cards. It doesn't matter whether you're applying for a particular card just to earn the welcome bonus and then never use the card again, whether you intend to make that card one of your go twos for everyday spend, or simply because that card is going to help make an upcoming award trip possible. What matters is that you know what you want to get from the rewards card that you're applying for. 

Asking this first question, why this card, will ensure that the cards that you add to your portfolio are the right ones for you. Answering this question will also help you avoid a classic trap that plagues almost every reward card enthusiast at some point, and that is shiny card syndrome. 

Shiny card syndrome is when you jump on a credit card offer that sounds too good to be true or that everyone else is talking about without taking a step back and considering whether that card is actually a good one for you. You won't have to worry about that happening when you stop and take a minute to consider why exactly you're adding a specific card to your credit card portfolio. 

Okay, once you've asked yourself why this card, and you've identified exactly how a card is going to benefit you and the role that it's going to play in your broader award travel strategy, the second question you want to ask before you apply for a new rewards card is why this card now? Asking this question helps you avoid getting the right card at the wrong time. Let me explain. 

Timing matters when applying for a new rewards credit card. By now, you're probably very familiar with the concept of a minimum spend requirement. That is the amount of money that you have to put on a new rewards card in a given timeframe in order to earn the signup or welcome bonus. For example, the minimum spend requirement on one of my favorite personal points earning cards, the Chase Sapphire Reserve card, is currently $4,000 in three months in order to earn 60,000 bonus points as the welcome offer. 

Another example is the American Express Business Platinum Card. Ordinarily this card requires that you spend $15,000 on the card in three months in order to earn the welcome bonus. It is really important to take into consideration that you have enough upcoming expenses to meet the minimum spend requirement on whatever new card you're considering applying for. Particularly if you have sporadic high expenses that you really want to leverage in order to take advantage of a new card welcome bonus. 

Not only do you want to ensure that you have enough upcoming spend to meet the minimum spend requirement on a new card, but you also want to make sure that you apply for a new rewards card enough in advance of a large expense that you leave plenty of time for the application to be approved and the new card to arrive.

I cannot tell you how many times I've received messages from people saying they have a large expense due in just a few days. They want to know what new card to get in order to use the expense to earn a welcome bonus. But oftentimes by that point, it's too late. While some credit card issuers will expedite new cards so that you can receive them in just a few days after your application has been approved, I don't like operating under that kind of stress. I think it's so much better to give yourself some room and submit a new card application at least two to three weeks before a large expense is due.

Another instance where timing matters and where asking question number two can save you is when you're considering applying for a rewards credit card where it's advantageous to get it at a certain time of year. I'm thinking specifically here of the Southwest credit cards for folks who want to use the signup bonuses from one or more Southwest cards to earn a companion pass. 

Getting the timing right on applying for these cards in a narrow window, usually around November of each year, can mean the difference between earning a companion pass that's valid for only 13 months or so versus getting the timing right and earning a companion pass that's valid for almost 22 or 23 months. For a deeper dive into earning the Southwest companion pass, why the timing of applying for Southwest credit cards matters so much, and tips for getting the timing right, you can check out podcast episodes number 36 and number 37. 

All right, after asking why this card and why this card now, the next question that you want to make sure to ask before you apply for a new rewards credit card is do I meet the eligibility requirements to get approved for this card? Answering this question is more important than ever. Gone are the days when you could apply for seven cards on the same day and actually get approved for all of them or earn the signup bonus on the same exact card five times in one year. 

More rewards credit cards have been introduced and welcome bonuses have gotten higher the last few years. but the rules around qualifying for them have gotten tighter and tighter. You are doing yourself a disservice by not becoming familiar with credit card eligibility rules if you want to gradually build out the ideal credit card portfolio for your award travel goals. 

When it comes to card eligibility rules, there are three main categories that you want to take into consideration anytime you're about to apply for a new rewards credit card. Those are number one, card specific eligibility rules. Number two, points ecosystem eligibility rules that affect cards issued by one bank or issuer. Number three, cross ecosystem eligibility rules that affect your ability to get cards from other credit card issuers or points ecosystems. 

Now, we're going to break all of these three categories down now. The first category of rules are eligibility requirements that pertain to this specific card that you're considering applying for and will tell you whether or not you can get approved for that card. These are really easily found by reading the terms and conditions, offer details, or the fine print that will be listed on the credit card application page. 

Here's one example. If you read the offer details for one of my favorite rewards cards, the Chase Freedom Unlimited card, it will tell you that the card is not available to you if you currently hold the Chase Freedom Unlimited card or if you've earned the signup bonus on the card in the prior 24 months. That's pretty straightforward. 

If you already have a Chase Freedom Unlimited account open as the primary card holder you're going to get denied for another Chase Freedom Unlimited card. If you had a Chase Freedom Unlimited account open cancelled the card but you earned the welcome bonus on the card in the prior 24 months, then you can also expect to get denied for the card until that 24 month period has passed. As long as you meet those two eligibility criteria and otherwise have a qualifying  credit score and are in good standing with Chase, you have a high likelihood of getting approved for the Chase Freedom Unlimited card. 

So moving on to the second category of card eligibility rules that you need to consider when applying for a new credit card are the rules that govern that specific credit card issuer or points ecosystem as a whole. Keeping with the example of applying for a Chase Freedom Unlimited card, you want to understand the rules that govern Chase credit card ecosystem as a whole. 

Now, Chase does not have a defined limit on the number of Chase credit cards that you can hold at any one time, but it does have rules around velocity or how often you can get approved for new Chase cards. These include the 2 and 30 rule and the 1 and 30 rule. The 2 and 30 rule means that Chase will typically not approve you for more than two new credit cards in a rolling 30 day period. The 1 in 30 rule means that Chase will typically not approve you for more than one business credit card in a rolling 30 day period. 

But that's not all. Chase also has what are called family rules that apply to all the cards in a specific family. Now, under the umbrella of credit cards issued by Chase, there are different families of credit cards. A credit card family is just a group of credit cards that all earn the same type of points. 

So all of the credit cards that Chase issues that earn Southwest points are in a family together. All of the cards that earn IHG points are in a family with each other and so on. There are specific rules that govern whether you're eligible for cards in a specific family. 

Now, before you start thinking that this is making sense, and you have a handle on how this works and how convenient it would be if different credit card ecosystems all have similar rules, you'd be mistaken. Every credit card issuer has their own set of rules that dictate your eligibility for the cards within that ecosystem.

Now, I'm not going to list out all of the eligibility rules for each credit card ecosystem here because that would be tedious for me and mind numbingly boring for you. So I've done something better. To help ensure that you can easily review the credit card eligibility rules that apply to each credit card issuer prior to applying for any new rewards credit cards, I've made you a handy dandy resource very creatively called Your Guide to Credit Card Eligibility Rules. 

You can download your own copy for free after you finish this episode just by going to www.pointmetofirstclass.com/60. That's just the number 60, six, zero. That link will be in the episode description and the episode show notes that will be easy for you to find. You can download that guide anytime that you want in order to make answering question number three much, much easier. 

Finally, not only are there eligibility rules for each individual rewards card as well as eligibility rules for each credit card issuer as a whole, but there's also a third category of eligibility rules. These are the ones that extend beyond specific credit card ecosystems but that will still impact your ability to get approved for new rewards cards. 

The classic example of this is Chase’s 5/24 rule. This famous unpublished rule states that you will not be approved for a new Chase credit card if you've opened five or more new personal credit card accounts from any issuer in the prior 24 months. Now what's critical to understand about the Chase 5/24 rule is that it applies to you and impacts you even if you've never held a Chase credit card before or even if you have less than five Chase cards. If you've opened new Amex or Capital One cards or store specific credit cards in the prior 24 months, you could be locked out from getting a new Chase Card. 

Now if you are not already intimately familiar with this rule, you need to be. I did a deep dive into the Chase 5/24 rule back on podcast episode number 26. So be sure to check that out if you need to learn more about this rule. 

Now, similarly, Capital One seems to be getting very sensitive to approving you for one of their cards if you have recently opened several rewards credit cards regardless of the issuer of those cards. I've heard many data points of folks with excellent credit scores being declined for a Capital One personal or business credit card simply because they had opened other credit cards in the prior few months.

Understanding these types of eligibility rules, whether official or unofficial, is critically important in helping you plan out which cards you want and in what order you should apply for them to increase your chances of approval. For example, if a Capital One credit card is high on your wish list along with a few other rewards credit cards, I would probably favor applying for the Capital One card first before applying for other rewards cards to increase your chances of getting approved. 

Okay, let's move on to the fourth question that you should ask before applying for a new rewards credit card. That is, is this the best welcome offer available for this credit card? Do not snooze on asking this question everyone. Forgetting this could cost you tens of thousands of points. That's because sometimes there is more than one welcome offer available on a particular card at a given time. 

Now, just to be clear, I am not referring to targeted offers here. Targeted offers our elevated welcome bonus offers on specific credit cards that you sometimes receive in the mail or in your credit card account. You can tell a credit card offer is targeted to you because it usually has a specific code that you have to apply for the card with in order to get the elevated signup bonus. That code is specific to your personal identifying information. So you can't just pass it along to a friend or a family member if you don't want to use it. 

There are always targeted offers floating around, but those come to you. You can't go out and just go ask for them. What I'm talking about here are publicly available offers on credit cards that are better than the standard welcome offers on the same card. American Express is famous, or infamous, for having multiple offers available on the same credit card at a given time. 

For example, if you go to American Express's website because you're interested in applying for the personal Amex Gold card, you will see a standard welcome bonus offer of 60,000 points after you spend $4,000 on the card in six months. But you can do so much better than that. 

Many, many people who currently hold the Amex gold card can generate a referral link that offers 90,000 Amex points for the same exact spin requirement. That's 30,000 more Amex points on the same exact card when you apply for it using the referral link from a friend or family member rather than applying for the card directly through the American Express website. 

Please, if you take nothing else from this episode, let it be this. Never apply for an American Express membership rewards points earning credit card on the Amex website without first checking to see if a better welcome bonus offer is publicly available. 

This is particularly important because relating back to question number three from earlier in this episode, one of the more delightful card eligibility rules that Amex has is that you can only earn the welcome bonus on each specific credit card that they offer once in your lifetime. Yes, the fine print in the car details on their application pages actually say that. 

Now, while there are some exceptions and workarounds to this rule, otherwise known as the once per lifetime rule, an important consequence of this rule is that you don't want to just randomly apply for American Express credit cards. You want to be sure that when you apply for an Amex card, it’s got a particularly high welcome offer because that might be the only chance that you have to get it.  

While American Express is the most dramatic example of a card issuer that can have multiple welcome bonus offers available on a single card at any given time, other card issuers can sometimes have increased welcome bonus offers as well. We've seen examples from Chase where higher than standard signup bonuses on some of their cards are available if you apply for the card in a physical Chase Bank branch rather than submitting an application online. 

So how can you be sure that you're applying for a rewards card with the best publicly available welcome bonus offer when you're thinking about getting a new credit card? Well, you can run an old fashioned Google search with the name of the credit card that you want to apply for and, quote, best available offer to see if there are any reports of higher than usual welcome bonus offers that you can take advantage of. 

You can also check out one of my favorite resources on the internet for this, which is the points and award travel blog run by the guys over at Frequent Miler at frequentmiler.com. They have a list of current best credit card offers that is extensive, and that shows the best publicly available credit card signup bonus offers, even if they're ones that don't earn the Frequent Miler team a commission. 

I think it takes a lot of integrity to prioritize people getting the most valuable information available to them over earning a commission. So I like pointing folks over to the Frequent Miler website as a great resource for easily finding best credit card offers. 

The last thing that I want to mention before moving on to the fifth and final question that you want to be sure to ask before applying for a new rewards credit card is to take into consideration whether you have a P2, a friend, or family member who can provide you with a referral link for the credit card that you want to apply for. 

This enables your partner, friend, or family member to earn bonus points for referring you to the card and doesn't cost you anything. Especially if you're operating in two player mode for earning points, make sure to use your partner's referral link for a new credit card if they have one so that you're not leaving any points on the table. 

All right, on to the fifth and final question to ask before you apply for a new rewards credit card. That is what is the potential negative impact of getting this credit card now? Asking this question is so important because the decisions that you make today can have significant impact on the cards that are available to you tomorrow or a month from now or even a year from now. 

As you've heard, there have never been more rules governing credit card eligibility than there are today. Unfortunately, my prediction is that that is probably only going to increase. That's not something to be afraid about, but I do think it's useful to consider how getting certain cards now will affect your ability to get other cards down the line. This question becomes much easier to answer once you understand the various credit card eligibility rules, but it helps to make sure that you don't sacrifice your larger award travel goals for a single rewards credit card. 

For example, Amex made news this year by instituting a family rule around the personal membership rewards points earning credit cards, including the personal Green, Gold, and Platinum cards. Now, if you think about these cards as rungs of a ladder starting with Green then going up to Gold and then going up to Platinum, American Express says that you can only move up the ladder not down. 

So if you have no American Express credit cards and you apply for the personal Amex platinum card first, you will no longer be eligible to earn the welcome bonus on the Amex Gold card or the Amex Green card. Instead, the best strategy if you anticipate wanting all three of the personal Amex cards is to start by applying for the Amex Green card first, then getting the Amex Gold card, and then getting the Amex Platinum card. 

Of course, if you only want one of those three Amex cards, then doesn't really matter. You can just go for that card first. But most people I know in the points hobby would choose to have more than just one Amex personal card. 

Considering the potential negative impact of applying for a certain credit card is another example of where the Chase 5/24 rule comes into play. Now, if you're someone who values having Chase rewards cards, you always need to take into consideration the impact that applying for any new credit card will have on your Chase 5/24 score and therefore your ability to remain eligible for more Chase cards. 

As long as there are more Chase cards that you want to add to your portfolio, you have to carefully consider anytime you apply for a new card that's going to increase your Chase 5/24 score. But you don't have to be afraid of the 5/24 rule. Taking question number five into consideration will help you decide when it's worth it to you to sacrifice a potential Chase 5/24 slot. 

Now I particularly love asking this last question before applying for a new credit card because it helps remind me that this hobby is bigger than any one new credit card or any single amazing welcome bonus, and helps me to feel confident that I'm going to be able to get the cards that I want most in the future when I'm ready to apply for them. 

There you have it, everyone. Those are the five key questions that I make sure to ask and answer anytime I'm about to apply for a new rewards credit card. To recap, those questions are number one, why this card? Number two, why this card now? Number three, do I meet the eligibility requirements to get approved for this credit card? Number four, is this the best welcome offer available on this card? Number five, what is the potential negative impact of getting this card on my future ability to get other rewards cards that I really want? 

The beauty of asking these questions before you apply for a new credit card will ensure that you're strategically and deliberately adding cards that will have the highest positive impact for you and will help you prioritize the cards that you most want to get and when you want to get them. Whether you adopt all five of these questions or just grab the ones that feel the most valuable to you, I hope that today's episode will help you the next time that you go to apply for a new point earning credit card. 

Before we sign off, I just want to give you three final tips or reminders to keep in mind the next time that you are ready to apply for a new credit card. Trust me when I say that I've learned these the hard way, and I don't want you to repeat my mistakes.

Tip number one. If your credit report is frozen, make sure that you unfreeze or thaw your credit report with the three major bureaus before you submit a new credit card application. This is very easy to do online with Equifax, Experian, and TransUnion. Don't be like me and forget to thaw your frozen credit report before hitting the submit button on a new credit card application. If a credit card issuer cannot access your credit report, your application will either get denied outright or get trapped in a review process. Do yourself a favor and just make sure to unfreeze your credit report first. 

Tip number two, anytime you're planning to apply for a new credit card, make sure to leave enough time in between when you submit your application and when you actually need the new card in hand to pay for an upcoming expense. Sometimes you can go from application to card in hand in just two or three days, but that's definitely not guaranteed. Usually it takes longer than that. Give yourself a good two or three weeks before you need a new credit card, especially if you have a large anticipated expense that you want to leverage to earn a new card welcome bonus. 

Tip number three, make sure to take a screenshot of the credit card offer you're applying for it before you submit your application. This is particularly important if you're applying for a card with an elevated welcome bonus offer or other promotion, but I recommend that you do it anytime you apply for a new credit card. 

You most likely won't need it, but it will be invaluable for you to have if you have any problems being issued the correct welcome bonus after you meet the minimum spend requirement and need to submit proof of the actual offer that you applied for. That is impossible to do after the fact. So be sure to take and save a screenshot of any credit card offer for you submit your application. 

All right, everyone that has everything that you need to know before you apply for a new rewards credit card. Don't forget that you can grab your free guide to credit card eligibility rules by going to www.pointmetofirstclass.com/60. Have a great week, and I'll see you again for our next episode.

Thank you for joining me for this week's episode of point me to first class. If you want more tips on turning your expenses into travel visit point me to first class.com to learn more. See you next week.

Thank you for joining me for this week's episode of Point Me to First Class. If you want more tips on turning your expenses into travel, visit pointmetofirstclass.com to learn more. See you next week.