Posted by William Charles on August 29, 2016
Credit Cards

Published on August 29th, 2016 | by William Charles

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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.

 

 



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Charlie

Good stuff, Will. Just a DP from the past (last year or so), downgrading did not reset the clock for me. Not sure if it will going forward but wanted to throw it out there.

OK216
OK216

I’m curious about this. So far, I’ve only heard of one person actually trying a downgrade and then reapplying for the same card, and they said the downgrade did count. Aside from that, though, it seems like most of the “knowledge” of this is assumption, not practice.

Were there any mitigating factors for you? Was this during the World Elite loophole, for instance, and your card had been converted to World Elite? I’m really curious because I’d prefer to downgrade vs. chance paying another annual fee if I don’t get a good retention offer.

trouble747
trouble747

So I’m looking at the offer page for the AA executive card and it says “American Airlines AAdvantage ® bonus miles offer is not available if you have had a Citi® / AAdvantage® Executive World Elite™ MasterCard® opened or closed in the past 24 months.” I suppose this card doesn’t currently fall under the new rule?

trouble747
trouble747

Correction: clicking through to the application page shows the new language. Lame.

Smith
Smith

I think the citi business AA is at 30k, not 50k. At least as far as I can tell.

Smith
Smith

Just saw the other post, never mind!

Winnie
Winnie

Any thoughts on the Citi Hilton HHonors Visa Signature and Citi Hilton HHonors Reserve? One is offering points and one is offering free nights.

C Money
C Money

The “cancel your card strategically” section doesn’t make sense…how would keeping a card open an extra year help to reset the 24 month clock? Seems like it would do the opposite.

Justin Pope
Justin Pope

I’m confused to. It sounds like, if you have a card open for 3 years (36 months) and applied for a new card in the same brand, DoC is saying that it wouldn’t count as a card “opened or closed in 24 months” because the card wasn’t opened in that 24 months.

Very nit-picky on the word choice, if DoC is correct, that would be great to know and leverage. Generally similar fine print for that effect I’ve seen interpreted as “if you’re had the card (whether open or closed we don’t care) in the past 24 months, you aren’t eligible.” Sounds like this one could potentially be different?

Josh
Josh

Do you know if this only counts moving forward or if it counts the past year or two? For example, if I cancelled a Citi AA card in June 2015, do I need to wait until June of 2017 to open a new one? Thanks!

OK216
OK216

It will look back at the previous 24 months. It applies exactly as it reads.

Barb
Barb

we took AA flights on our last vacation and the FA was distributing apps for AA plat. There’s 4 of us adults in the group and I even asked extra for my parents (requested another set on the way back). I read the fine print immediately and they didn’t have the 18/24 mos restrictions. So for those taking AA flights, don’t forget to ask your FAs for apps, they’d be so glad to give you some.

Dave C
Dave C

Careful, plenty of DP out there that in-flights didn’t get bonus posted.

L
L

If the application didn’t have the 24 months language, you should be able to file a CFPB complaint, which may inspire Citi to provide the bonus.

steve
steve

Barb – used one of those apps from the plane and did not get the bonus

fathiss
fathiss

Because of these changed policies I have never believed in the advice so many bloggers give to “earn and burn”. I understand, of course, that points/miles devalue and you could lose buying power, but the advice may lead some to believe to not apply for cards with miles/points if they don’t immediately need them. I believe in “earning” as many points as you can when available even if they are more than you need for the upcoming year. That way I at least have a stockpile to get through the lean “earn” years that are inevitably coming (or already here).

TravellerAtoZ
TravellerAtoZ

I totally agree fathiss – I’ve worked hard for two years to build up points and I have enough for 2 international trips per year for the next three years (family of four). If those points devalue between now and then, I’ll still be super grateful that I have them and keep applying for more cards. This strategy enabled me to get most Citi and Chase cards before this year’s rule changes, I have almost every Amex card as well.

John
John

I agree 100%. Although churn and burn seems to be the conventional wisdom among the bloggers, it never made sense to me. That is especially true with the tightening of restrictions among the major card companies. I understand that points and miles become less valuable through various devaluations, but that doesn’t mean the credit card companies are offering higher bonuses to offset them. The 50,000 standard bonus miles I earn from a particular credit card is ultimately worth the same whether I apply for the card now and wait a year to use them, or apply for that same bonus a year from now and use them immediately afterwards, even if there is an intervening devaluation. Plus, if I “apply and hoard” rather than “churn and burn,” I become eligible to apply for that card’s bonus again sooner (which is really what churning is all about.)

brian
brian

@John: need to consider the source. i.e. TFM did a 1MM “game” in like a month or something. OMAAT has his booking business which nets him more miles than he can spend w/ him/Ford even in F/Biz int’l w/ trips every few days.

In short, some ppl have jobs and some ppl have jobs which happens to be in the MS realm and some are just plain retired. Each has various levels of commitment to the hobby. Others buy to re-sell, which also, as a side-effect (or goal), generates a LOT of miles/points/cash backs. So, what a ‘normal’ hobbyist generates in miles/points/etc .v. bloggers or die-hards…very different.

I get a few cards here/there but travel for work, so much of my spend on cards is via travel w/ points from travel and MS about equal. B/c much of my points/miles are “earned the hard way” a devaluation sucks, but it isn’t the same as if you had paid for them via MS or other pathways.

Blake
Blake

I think that the only strategy left is get what you want when you want it. The rules are changing too fast to have a 2-3 year strategy for churning these cards. By the time that comes around, the rules will have likely changed again.

Think about it. For Citi, it was churn it whenever, then it became 2 browser trick, 2 every 65 days, then 18 months, then 24 months and now its can’t have a similar product within 24 months of opening/closing.

For anyone just getting into churning, go Chase, then get every Citi/AMX that you want quickly. Then move on to lesser issuers.

You can’t count on these rules being the same 2 years from now, much less 1 year from now. The next place they go is like AMX where it is once per lifetime (7 years). Over the last 2-3 years, the churning game has been very fluid with rules changing all the time.

Raul
Raul

Agree. I’m sitting on a nice pile. Nothing fantastic but enuff to get me by for the trips I take. I saw the writing on the wall a while back and started only applying for business cards to let my credit report recover. Feeling really good about 2017 as I’ll go from 5 apps in the last 2 years on CR to 2 apps.

Dukie02
Dukie02

Just remember that applying for a TYP or AA card that doesn’t have the new language (such as a targeted promo) will still count as an opened TYP or AA card and reset your clock for a non-targeted application (assuming you actually get approved for the card).

David
David

Please let us know if downgrading the card will reset the clock.
That would be the most important thing to know right now i guess.

Chuck

I’ll try to reach out to Citi and see if we can clarify.

JW
JW

I called the New Application line for this question 2 weeks ago. The rep researched and said: “Product change (I guess downgrading is also included) will only be reflected as conversion. You still could get sign up bonus if applied in the next 24 months.” Not sure how much I can trust her.

Hope you can get an accurate answer!!

david
david

Hi Chuck were you able to check?

chasejuggler
chasejuggler

Between Citigold signups and World Elite churning, I’m not surprised that we all got Citi’s attention this year.

I’m still cautiously optimistic that the points will continue to flow for at least the next few years. We shall see I guess…

MH
MH

Yes and believe it or not, like it or not all of the banks read the blogs, Reddit and FT.

It seems they are saying enough is enough with these step by step how to abuse/game the bonuses.

And Citi seemed to be more vulnerable than many..

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