Also, you mentioned the "pay over time" feature with Amex– I've noticed Chase Sapphire offering me that too. Do you know if it's the same in terms of turning on the feature but not using it getting you the points? I've never tried it cuz I didn't want to pay interest, but maybe now I will
This is similar but different for Chase and Amex. The principle is the same: you have a charge you can’t pay off in full, but you don’t want to pay interest. Using “pay over time” means you can pay it off over 3/6/8/12/x months (whatever they offer) with a fixed fee included.
So let’s say you have a $1,000 charge you can’t pay off right away. These numbers are all made up , but Chase/Amex will give you the option to pay $166.67 per month for 6 months, but they will also charge you an addition $10/month fee for the option to pay it off over 6 months. So overall, you are paying back the $1,000 plus an additional $60 in fees.
The “plan it” fee may be lower than getting charged interest and some people just want to know up front exactly how much of a fee they want to pay per month rather than do math to calculate interest.
My advice is that if you can pay off your balance in full, avoid doing a “plan it” program since it will cost you money in the long run.
What happened with Amex is that they said “hey if you turn on this feature, we will give you 20,000 points. You don’t even have to use it if you don’t want!” So I turned it on, but never used it since I don’t want to pay and extra fee and can afford to pay off all my charges in full.
As far as I know, Chase has never offered any points to do this. Rarely I’ve seen them offer to do a “plan it” plan with a $0 fee, so it’s basically a payment plan for free but it’s been rare.
I wouldn’t use it on your chase card unless some emergency comes up where you have to spend a ton of money and can’t pay it all off at once and are okay paying a bit extra to spread out payments over 3-12 months.
from what I've seen, they offered one "plan it" with 0% interest, but you have to pay interest on all "plan it"s after the first one, and there's no incentive for doing them
Awesome!! One topic I would love to know more about is protocol around opening cards– is there a time period you should wait between opening? Does opening multiple cards in a short time period affect your credit in any way? I need to know before I jump on operationalizing all of your advice immediately!!
That’s a great question, I definitely should talk about it in a future newsletter thanks for bringing it up.
The time period waiting between new cards really depends on the card issuers themselves. They all have pretty hardline unwritten rules, that people have figured out through trial and error. It’s usually just if you’re opening multiple cards from the same issuer though.
For example, Chase generally won’t approve you for more than 2 of their cards within 30 days, and you don’t want to open more than 3-4 of their cards in a 12-month period. They also will not approve you if you’ve opened 5 or more of any credit cards in the past 24 months (it’s known as the 5/24 rule).
Amex won’t approve you for more than 2 of their cards within a 90 day period, and if you do open 2 Amex cards, they have to be more than 5 days apart (1/5 and 2/90 rules)
Bank of America, Capital One, and Citi have their own less stringent rules but it usually is centered around how many cards you’ve opened in the last 6, 12, and 24 months. For most people who maybe open 1-2 cards a year they don’t need to worry about any of these unwritten rules.
With regards to credit score, anytime a bank (or any credit/loan issuer) does a hard pull on your credit report, your score will likely go down in the short term. Same with opening a new account. So if apply for and are approved for a new card, those are two small hits to your credit score. The hard pull will drop from your credit report after 24 months.
But, if you open a credit card (not a charge card, like the Amex platinum) your available credit will increase, which boosts your credit score. Your average age of all credit accounts will decrease though, which also is very slightly negative on your credit score. So some things will increase and some will decrease when you open a new card.
In the very short term, like 30ish days after opening the card, your score can drop dramatically depending on your credit file. But once you start making on-time payments, which is one of the biggest factors to your credit score, that number will recover fairly quickly.
Opening 2 cards in quick succession will drop your score more than just 1 card, but if you pay off your cards on time ever my month, your score should rebound, and in some cases go higher than before you opened the cards, within a few months.
The other thing to do to help your score rebound is to pay off your balance in full a few days before your statement closes. Credit utilization is another big contributor to your score.
So if your limit is $5,000 and your statement closes with a $4,000 balance, that won’t look great because they see that as high risk, you may be spending outside of your means, even if you pay it all off.
But let’s say your statement closes on July 22nd, and you pay off your full balance on July 20th, then come July 22nd all they will see is “Oh wow Lily used 0% of her credit limit, they are being responsible!” What gets reported on your credit report in terms of utilization is what balance you have on your card when your statement closes. If it was $4,000 but you pay it off before the statement closes, all they will see is $0 and your score will go up. Anything below 30% utilization is considered good, anything below 10% is great, so you could still have your statement close with $500 you need to pay and your score will likely still increase. This matters less when you have a larger credit file with multiple cards / accounts and extensive history.
One small word of caution though is on something called credit cycling. Let’s say your limit is only $2,000 and you spend $1,000 then immediately pay it off, then spend another $1,200 and pay it off, then another $800 and pay it off all in the same statement period, your bank won’t like that. They don’t want you spending more than your limit in any given statement period. So yes, you can pay off your balance before your statement closes to show a low utilization, but don’t do it multiple times in a statement period to get around your credit limit.
Before I started opening cards like crazy, my score was around 760. Since then I’ve opened like 13 cards in 3 years and my score fluctuates between 740 and 780.
If you don’t plan on applying for any new car loans, personal loans, or for a mortgage, the temporary hit on your credit score won’t matter much in the long run since it will go back up after a few months, especially with 0 late payments and keeping your utilization low.
If you have a relatively thin credit file, like only one credit card with a low limit (<$5,000) then my advice would be to open one card, preferably one with a good sign up bonus, and wait 4+ months before trying for another. This gives you time to show on-time payments on multiple cards.
If you have multiple cards already with decent credit limits, then I think you could apply for 2 cards the same day, assuming you can meet the spend for both to get the bonuses.
I know that was a lot but I hope it all made sense! Let me know if you want me to clarify anything
thank you for all the info– def makes sense! I want to open another card (for the points, obvs) but am trying to get pre-approved for a loan so it might not be the best time. I appreciate all the detail!!
Happy to help out Lily, definitely wait until after you get approved for the loan before deciding to open any new cards. Most loan services won't care about any new accounts (i.e. credit cards) once they are 6-12 months old, but best not to risk it.
When you do want to open a new points earning card, let me know and I can help you find the best one for what you want to accomplish!
Also, you mentioned the "pay over time" feature with Amex– I've noticed Chase Sapphire offering me that too. Do you know if it's the same in terms of turning on the feature but not using it getting you the points? I've never tried it cuz I didn't want to pay interest, but maybe now I will
This is similar but different for Chase and Amex. The principle is the same: you have a charge you can’t pay off in full, but you don’t want to pay interest. Using “pay over time” means you can pay it off over 3/6/8/12/x months (whatever they offer) with a fixed fee included.
So let’s say you have a $1,000 charge you can’t pay off right away. These numbers are all made up , but Chase/Amex will give you the option to pay $166.67 per month for 6 months, but they will also charge you an addition $10/month fee for the option to pay it off over 6 months. So overall, you are paying back the $1,000 plus an additional $60 in fees.
The “plan it” fee may be lower than getting charged interest and some people just want to know up front exactly how much of a fee they want to pay per month rather than do math to calculate interest.
My advice is that if you can pay off your balance in full, avoid doing a “plan it” program since it will cost you money in the long run.
What happened with Amex is that they said “hey if you turn on this feature, we will give you 20,000 points. You don’t even have to use it if you don’t want!” So I turned it on, but never used it since I don’t want to pay and extra fee and can afford to pay off all my charges in full.
As far as I know, Chase has never offered any points to do this. Rarely I’ve seen them offer to do a “plan it” plan with a $0 fee, so it’s basically a payment plan for free but it’s been rare.
I wouldn’t use it on your chase card unless some emergency comes up where you have to spend a ton of money and can’t pay it all off at once and are okay paying a bit extra to spread out payments over 3-12 months.
from what I've seen, they offered one "plan it" with 0% interest, but you have to pay interest on all "plan it"s after the first one, and there's no incentive for doing them
Awesome!! One topic I would love to know more about is protocol around opening cards– is there a time period you should wait between opening? Does opening multiple cards in a short time period affect your credit in any way? I need to know before I jump on operationalizing all of your advice immediately!!
That’s a great question, I definitely should talk about it in a future newsletter thanks for bringing it up.
The time period waiting between new cards really depends on the card issuers themselves. They all have pretty hardline unwritten rules, that people have figured out through trial and error. It’s usually just if you’re opening multiple cards from the same issuer though.
For example, Chase generally won’t approve you for more than 2 of their cards within 30 days, and you don’t want to open more than 3-4 of their cards in a 12-month period. They also will not approve you if you’ve opened 5 or more of any credit cards in the past 24 months (it’s known as the 5/24 rule).
Amex won’t approve you for more than 2 of their cards within a 90 day period, and if you do open 2 Amex cards, they have to be more than 5 days apart (1/5 and 2/90 rules)
Bank of America, Capital One, and Citi have their own less stringent rules but it usually is centered around how many cards you’ve opened in the last 6, 12, and 24 months. For most people who maybe open 1-2 cards a year they don’t need to worry about any of these unwritten rules.
With regards to credit score, anytime a bank (or any credit/loan issuer) does a hard pull on your credit report, your score will likely go down in the short term. Same with opening a new account. So if apply for and are approved for a new card, those are two small hits to your credit score. The hard pull will drop from your credit report after 24 months.
But, if you open a credit card (not a charge card, like the Amex platinum) your available credit will increase, which boosts your credit score. Your average age of all credit accounts will decrease though, which also is very slightly negative on your credit score. So some things will increase and some will decrease when you open a new card.
In the very short term, like 30ish days after opening the card, your score can drop dramatically depending on your credit file. But once you start making on-time payments, which is one of the biggest factors to your credit score, that number will recover fairly quickly.
Opening 2 cards in quick succession will drop your score more than just 1 card, but if you pay off your cards on time ever my month, your score should rebound, and in some cases go higher than before you opened the cards, within a few months.
The other thing to do to help your score rebound is to pay off your balance in full a few days before your statement closes. Credit utilization is another big contributor to your score.
So if your limit is $5,000 and your statement closes with a $4,000 balance, that won’t look great because they see that as high risk, you may be spending outside of your means, even if you pay it all off.
But let’s say your statement closes on July 22nd, and you pay off your full balance on July 20th, then come July 22nd all they will see is “Oh wow Lily used 0% of her credit limit, they are being responsible!” What gets reported on your credit report in terms of utilization is what balance you have on your card when your statement closes. If it was $4,000 but you pay it off before the statement closes, all they will see is $0 and your score will go up. Anything below 30% utilization is considered good, anything below 10% is great, so you could still have your statement close with $500 you need to pay and your score will likely still increase. This matters less when you have a larger credit file with multiple cards / accounts and extensive history.
One small word of caution though is on something called credit cycling. Let’s say your limit is only $2,000 and you spend $1,000 then immediately pay it off, then spend another $1,200 and pay it off, then another $800 and pay it off all in the same statement period, your bank won’t like that. They don’t want you spending more than your limit in any given statement period. So yes, you can pay off your balance before your statement closes to show a low utilization, but don’t do it multiple times in a statement period to get around your credit limit.
Before I started opening cards like crazy, my score was around 760. Since then I’ve opened like 13 cards in 3 years and my score fluctuates between 740 and 780.
If you don’t plan on applying for any new car loans, personal loans, or for a mortgage, the temporary hit on your credit score won’t matter much in the long run since it will go back up after a few months, especially with 0 late payments and keeping your utilization low.
If you have a relatively thin credit file, like only one credit card with a low limit (<$5,000) then my advice would be to open one card, preferably one with a good sign up bonus, and wait 4+ months before trying for another. This gives you time to show on-time payments on multiple cards.
If you have multiple cards already with decent credit limits, then I think you could apply for 2 cards the same day, assuming you can meet the spend for both to get the bonuses.
I know that was a lot but I hope it all made sense! Let me know if you want me to clarify anything
thank you for all the info– def makes sense! I want to open another card (for the points, obvs) but am trying to get pre-approved for a loan so it might not be the best time. I appreciate all the detail!!
Happy to help out Lily, definitely wait until after you get approved for the loan before deciding to open any new cards. Most loan services won't care about any new accounts (i.e. credit cards) once they are 6-12 months old, but best not to risk it.
When you do want to open a new points earning card, let me know and I can help you find the best one for what you want to accomplish!
Great issue Bebba. I especially liked the picture of you and Kayla 😀