The title rhymes! I did intentionally add the word “respectfully” because I don’t want my post to come off as hostile in any way. Drew has contributed so many original, helpful posts and I have linked to his blog on many occasions. No one can dispute that he gives 100% when it comes to his content and never “mails it in.” I respect that.
Yesterday, I was reading his post Best no annual fee travel credit card strategy and this quote is what made me write my rebuttal piece:
“The craziest thing is that you can justify every card. “Well, the Hyatt card gives me a category 4 night, so that could save me some money later.” I won’t go into details, but it’s absolutely stupid logic. You could be getting more free nights in two years and saving tons of money by canceling after 12 months. Yes, you are spending more money and actually getting less benefits. Because the annual bonuses are never as good as the sign up bonus.”
There is no question that canceling a card and then signing up for it in order to get the bonus again will give you better ROI. After all, getting 2 free nights (after spending only $1,000) sure beats paying $75 for just one (less fancy) hotel night. In a perfect world where everyone has the same goals and churning ability this logic certainly is indisputable. But that’s where the flaw lies, so let me point out several issues:
- Drew said in the same post that he has Chase IHG MasterCard and has no plans to cancel it. How come? The bonus on that offer is nothing to sneeze at, as you can get 80K points if Chase matches you to the better offer. And the card is churnable just like Chase Hyatt Visa, as long as you haven’t received the bonus in the last 24 months. That tells me that Drew feels that a night at a category 1-4 Hyatt isn’t worth $75 renewal fee on Chase Hyatt Visa. Fair enough, but is this the case for everyone? For many, most certainly. If you live in Midwest, rarely travel, the closest Hyatt only goes for $80 per night and you don’t really care for location, then no reason to hang on to the card. If you are a frequent traveler, live in Florida or near a major city, it’s probably worth it. See my post for more. My cousin-in-law just spent two nights at Hyatt Regency Coconut Point over Labor Day holidays. The hotel was going for over $400 per night. So yeah, paying $75 was a good deal in my book. The place was full as were most other resorts in Florida, so Priceline would be of very little use. Of course, if you are like Drew who is an avid BRG user, no hotel will ever be a spectacular deal, so it’s all relative, I suppose. No sarcasm, I promise.
- None of us know what our credit score will be like in the future. Another unknown is what kind of policy Chase will have in regards to credit approval. The rules have been tightening as far as UR points-earning cards are concerned. Eventually, the same policy may trickle down to co-branded cards such as Hyatt Visa.
- We are all unique. Not everyone is comfortable getting cards, canceling them and re-applying. Once again, I’m not saying that this strategy won’t yield the best possible results, but rather that we all have different goals. Personally, I like to concentrate on cash back and miles. That’s why I don’t mind hanging on to cards like Chase Hyatt. We are infrequent travelers, so it’s a nice way to passively accumulate points and hotel certificates. I’ve said before that I plan to renew Club Carlson Visa because buying 40K points for $75 is a good deal to me. It certainly doesn’t mean that everyone should follow my lead.
- I don’t think it’s imperative to cancel Chase Hyatt Visa before the first anniversary. Why? Your ability to get another bonus isn’t tied to cancellation date but rather the date when you have received your previous bonus. So, if you are planning to go to Maldives, Sydney, Tokyo and yes Paris, sure, it makes sense to cancel the card and reapply. But there really is no rush to do it beforehand. Unless, of course, you won’t be able to utilize the renewal certificate.
Once again, my goal is not to belittle Drew’s argument, but rather offer a different perspective. Readers, what are your thoughts?