Strategies For Dealing With Citi’s New Application Rule

Reposting this because this new rule is now in effect.

Update: New rules not in place until August 28th, 2016.

As we recently discovered and shared, Citi has added a new rule on eligibility for receiving a sign up bonus. Basically the new rule is that you can’t get a sign up bonus on a Citi credit card if you’ve opened or  closed a credit card that was the same ‘brand’ (e.g American Airlines, Expedia, Hilton or Citi TYP) within the past 24 months. Previously you were restricted to not being able to get the sign up bonus on a credit card if you’d opened or closed that card within the past 24 months.

A Practical Example

Let’s say that I applied and received the sign up bonus on the Citi Prestige card in January, 2015. In January 2016 I decide to close that card, I will not be eligible for any of the Citi ThankYou Points cards (only ThankYou Preferred, ThankYou Premier or Citi Prestige cards) for the next 24 months.

Strategies

Cancel Your Cards Strategically

Your ’24 month clock’ resets as soon as you cancel your card (I believe that downgrading a card will also reset this clock, but I’m not 100% sure). It might make more sense to keep a card open for an additional year (and pay the annual fee) so that you can get the sign up bonus on another card within that brand in a shorter period of time.

This is where having a good record keeping system in place is worth it’s weight in gold * 10,0000. You should be able to easily check when you opened cards, closed cards, reached the sign up bonus, received the sign up bonus (etc etc). Part of this strategy will be employing the fact that Citi offers generous retention offers (and their retention department recently reopened). These offers should lessen the impact of having to pay any annual fees.

When you do eventually apply for a new card within a brand, then it would make sense to cancel any other cards you have within that brand that you no longer want. This is because your clock has already been reset by opening a new card.

Focus On The Best Card From Each Brand

Because you’re limited to one card per brand 24 months after your previous card has been cancelled, you really need to choose what card you pick wisely. It’s not always going to be a clear cut choice, for example some people might prefer the Citi ThankYou Premier over the Citi Prestige (even assuming they both had the same sign up bonus) because of the lower annual fee and better earning rates. Others would prefer the inverse because of the better benefits on the Prestige.

Business Cards Are More Valuable

What’s interesting is that with the American Airline credit cards, the business card is considered separate from the personal card. That means I can get the business card even if I’ve opened or closed a personal American Airlines within the last 24 months. Unfortunately Citi doesn’t exactly have the biggest array of business credit cards, in fact they only have two:

• CitiBusiness / AAdvantage Platinum Select card: 50,000 mile sign up bonus
• Costco Anywhere Visa Business Card By Citi: No sign up bonus

Look For Offers Without This Language

I’m almost positive that there will be some way to get at least some of these offers without this restriction in place. Co-branded partners (e.g American Airlines) would surely want the ability to target select passengers and consumers for cards without these restrictions in place. We’ve seen this with both American Express & Chase to at least some extend and I’m sure we’ll see it with Citi.

I would think that mail offers that were sent out before this changed wouldn’t have this new rule applied to them, as it wouldn’t be on the flyer but double check any online application the flyer is tied to to make sure.

Final Thoughts

As always, credit card issuers and financial institutions in general are focused on their bottom line. It’s our job to adapt our strategies when they impose new rules and try to maximize our own returns, it’s really a game of cat and mouse and I don’t plan on getting eaten. This new rule definitely sucks, but let’s try to be proactive as a community and come up with solutions rather than solely focusing on the problem.

I’m certain that there is a lot more that I’m missing, if you have any other ideas on strategies/tips/tricks/whatever feel free to share them in the comments. At this stage I fully expect the remaining card issuers with no hard rules in place to add them in the near future as well, as people continue to shift more applications to those cards and they feel the heat.