A week ago today I was in Chicago talking about Delta and travel cards. It was such a fun time to catch up with old point enthusiasts (tip: it sounds like next year will be 14-16OCT16). One of my favorite things to do is listen to Rick talk about credit cards. He is so spot on with all his advice. Let me share some of the best parts and what you should think about this weekend.
As always he focused on more important things than travel cards or more correctly, things to get in shape BEFORE you think of going for travel cards. That is first and foremost protecting your credit score and getting your credit score in good shape. A big part of that is paying off debts first before you go for travel cards.
Notice the screen shot above from some of my payment history. Also take a very close look at the scale for this big part of your credit score. Do you see it? Folks if you ever even miss one single payment EVER you are not at 100% and you have dropped from “Excellent” to “Good”. In other words, it is not good to ever miss a payment. Period. You drop from 99% to 98% and you are just fair in the eyes of lenders. You can see how quickly the 97% or 96% score on the scale drops you into the basement.
This really should not be that surprising because if a lender is going to extend you credit, they want an “excellent” chance that you will repay them what they have lent you on an unsecured travel card. The simple solution is to pay your bill in full each and every month as paying any interest just destroys any point value you may have gained.
Rick also congratulated many. One attendee got his score up high enough to at last get a travel card. Good work and take it slow (i.e. no more cards for now) and keep paying off all your bills and get that score up up up was the advice.
He also congratulated one attendee who had just paid off their house and had zero debt and thanks to their good credit score got a bunch of cards and had now booked an amazing trip. Hello, that is the point in all of this folks! To see the world at affordable price.
Anther thing that was asked of the room was the questions about offers. He asked who is ultimately responsible for getting and finding the best card offer, that is, is it the blogs or the reader? All answered the reader, that is, the one applying for cards. That is the right answer. There can be targeted offers or there can be offers not open to blogs to promote or ones that require an incognito browser windows etc. These are the facts of the matter. I personally appreciate it when readers can use my links but if they find a better deal one way or the other – GOOD FOR YOU – you win!
I brought up something I thought was amazing from the Executive Summit before the Freddie’s, that is, the cost of acquisition for a bank to get you as a new client. I learned it can take 2 or 3 years for a bank to recoup the investment of giving us new card bonus points. Think about that for a bit. If you cancel a card on or around year 1 then the bank is not making it’s money back. Can we also see why if you do this again and again with the same bank they may be less likely to offer you new cards in the future? This is one of the reasons I try to really USE cards I get for a while even if I do not love the card beyond the bonus points. I want to give something back and it is not like the points are worthless whatever the card may be. I want to at least appear to be a valuable customer to the banks! 😉
Bank are slow to respond creatures but they are responding. We are seeing the changes in how many times you can get a new card bonus or how long you have to wait to get a card bonus again. We are doing our best to stay one step ahead and they are playing catch-up as we follow the rules they are laying out. Are the best days behind us? Maybe, but my ever growing point balances sure do not seem to support that theory!
Have a great weekend everyone and I hope you take a bump, get some bonus points or book a trip somewhere fun today. BTW, if you are not on twitter, you may have missed it, but a number of readers will be in DFW (at the Centurion) on the 16th of November and then going out to Hard Eight BBQ later for dinner. If you are in town (or can get in town), feel free to stop by and say HI or tag along for the fun. – René
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