Beginner’s Guide

Beginner’s Guide to Applying for Multiple Credit Cards: Step 2 – Decide Which Cards to Keep and Cancel



Welcome to the Beginner’s Guide to Applying for Multiple Credit Cards! This is a step-by-step guide to show you how to get ready and apply for credit cards to earn airline miles & credit card points. The series will consist of 4 posts that cover these basic topics:

Part 1: Check and review your credit score

Part 2: Evaluate current credit cards and choose the best new cards

Part 3: Results and what do if your application goes pending

Part 4: Stay organized and monitor your credit

The second step I take when I apply for multiple new credit card applications is to evaluate my current cards, determine which ones to keep and which to cancel, and then to choose the best cards to apply for.

In today’s credit card market there are numerous lucrative permanent offers available as well as a higher increased limited time offers. Your strategy should be to apply for the limited time offers while they are available and fill in the gaps with the normal offers. As you eliminate some cards from your wallet, you are also losing some specific perks so you may want to think about applying for a new card to cover those specific travel perks. Another aspect is choosing how many cards to apply for, and how many from each card issuer which I will cover this later in the post.

To start this process, I like to take a look at the cards I currently have to determine what cards are not worth keeping, as well as what cards to apply for to earn points or other benefits.

Evaluate your current cards

Evaluate your current cards

What’s in Your Wallet?

I like to go through my cards and evaluate each card with these questions:

Does the card have an annual fee and do I want to pay it? Is the annual fee worth it? I normally don’t tend to keep too many cards a second year if the card has an annual fee. There are some cards that are clearly worth the annual fee because of the benefits and annual bonus. In some cases the value of the anniversary bonus or free hotel night will outweigh the cost of the annual fee. For example, the Chase IHG Rewards Club Visa with a $49 annual fee gives card members a free night certificate every card anniversary after the 1st year. You can use this free night at an InterContinental hotel and easily get $300 worth of value from it. The card may offer other benefits that are more valuable than the costs of the annual fee, so take that into consideration.

Can the current card be replaced with a new one that gives the same benefits and earn a new sign-up bonus? There are MANY rewards cards to choose from, and some are even offered in several different versions. For example, the Southwest Rapid Rewards cards often have a 50,000 points bonus and in four different versions. Chase allows you to earn one bonus per product so you can earn the bonus for all four cards. Another example is the multiple different Hilton rewards cards, you can get a co-branded card from Citi or Amex and in three different flavors–all offering similar perks.

How old is the credit card account? I always keep my two oldest cards open to extend my averaged credit length. This is a factor that helps keep a high credit score and accounts for 15% of your credit score. None of my oldest cards have an annual fee so I plan on keeping them indefinitely for this purpose. Two cards that are great for this because they don’t have an annual fee and earn 5% in rotating categories are the Chase Freedom and Discover it cards.

Do the card benefits fulfill my needs/goals? Everyone has their own travel goals, principles and values so everyone will value card benefits differently. Do you prefer luxury travel or budget travel? Would you rather have one First Class award or 3 economy awards? For me, free international travel is my number one goal, but for others it might be cash back earnings. On this round of credit card applications I want to focus on earning free hotel nights and diversifying my airline miles (especially after the recent United devaluation). Another thing to consider is whether the card will give you automatic elite status with the program. Having Gold or Top-tier status can be a huge value during your travels, and can mean upgrades, free services, and better treatment.

After taking inventory and running a quick cost/benefit analysis on each credit card, the next step is to decided which cards to keep and cancel.

During this round I will end up canceling my Amex Hilton HHonors card and my Club Carlson Visa business card. I will keep my personal version of this card because I love the perk of getting the last night free when I book stays of two nights or more. The Gold Elite Status has also served me very well with room upgrades. One strategy that works on some cards is to cancel and re-apply for the same bonus offer after 12-20 months. This practice is most successful with the Citi AAdvantage cards, generally Chase will not allow this, but it is always possible to slip through the backdoor ;-).

How to Choose the Best Current Offers

After you decide the type of travel and rewards perks you want, you can set out and choose the best card offers. In the U.S. we are lucky because at any given time there are a handful of lucrative card bonus offers available and you can rack up a couple hundred thousand miles just by applying for several new cards.

Start this by reviewing the best top offers and all potential mega sign-up bonuses that are limited time offers. From here you can narrow them down by evaluating them on the bonus, minimum spend amounts, annual fee, and additional card perks.

Total minimum spends

When choosing the top cards to apply for I always set a figure on the maximum total minimum spend requirements I can handle. The saying goes “don’t bite off more than you can chew.” Add up all the minimum spends of the new cards you are looking at getting and ask yourself if you can realistically reach this amount within three months. Along with everyday spending there are other powerful ways you can reach your minimum spend, such as Vanilla Reloads and Amazon payments.

You can easily meet a $3,000 minimum spend for one card using Amazon Payments by sending $1,000 per month to a trusted friend. This can help you hit the minimum spend faster, and allow you to focus on the additional cards. When you get the new cards make sure to put ALL everyday/business expenses on the cards, and start working through each min spend.

Putting a value on different miles and points

Everyone will value and use their miles and  points differently, so putting a value on each point currency really depends on the best use for you. Of course some airline miles are more valuable than others, but depending on where you want to travel and how you want to travel, each mile and point currency will be valued differently. Another thing to be said is that airline miles are only as valuable as the user is at redeeming them. There are many tips and tricks to maximize your miles when booking awards.

My favorite redemption for international travel is using United’s Mileage Plus miles (Star Alliance) to take advantage of the open jaws and international stopovers. For trips to South and Central America I prefer using American Airlines AAdvantage miles because LAN is part of One World and taxes and fees tend to be very low.

When placing a value on miles and points you should determine your travel goals. Do you only travel internationally? Only fly in business class? Are most of your flights domestic? Do you want to crash at the swankiest luxury hotels or are you willing to maximize your nights by staying in lower-tier hotels? Use some of these questions to help you determine which bonuses will fit your needs and travel style so you are more likely to use and enjoy them on an amazing trip.

First year annual fee waived?

In general, I prefer to avoid paying an annual fee the first year when applying for new cards. With that being said, if the bonus is worth $500+ it can easily be justified to pay the first years fee to earn the bonus. I just applied for the Citi Hilton Reserve card that gives me 2 free weekend nights at any hotel. Since the free night certificates can be used at ANY hotel, the 2 free nights are worth up to ~$900 when staying at a category 10 hotel like the Conrad Hong Kong that runs around $450 per night.

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Use credit lines to your advantage–transfer credit to get approved

If you already have multiple credit cards from one bank you can ask to transfer some of the credit from an existing card to allow the new one to be opened. This works particularly well with Chase when calling into the reconsideration line. I always mention that I wouldn’t mind if they transferred some existing credit from another card to approve the new card. When I applied for the Sapphire Preferred bonus this week the Chase representative offered to close my Marriott Premier card and transfer the $5k credit limit over to my new Sapphire card. This is one reason to never close a Chase credit card before applying for a new card.

Focus on aggregating points/programs

Try to find several cards that will allow you to earn miles or points for the same airline or hotel loyalty program. By earning points within the same program you can maximize travel flexibility and the option for large award redemption such as around the world tickets. This is why earning Ultimate Rewards points is the crux to my points earning strategy. Chase’s consistently high bonus offers on the Ultimate Rewards earning cards makes it easy to earn a couple hundred thousand UR points with just a few cards.

Chase also allows you to earn a bonus for each individual card product. For example you can earn the 50k bonus on all four Southwest Rapid Rewards cards offered by Chase. You can earn bonuses for both a personal and business card for the plus and premier version, allowing you to earn a total of 200k Southwest points.

Stay posted to see which cards I applied for and whether I got approved or not!

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