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Every credit card company has specific rules for applications and welcome bonuses. Knowing these rules is important to crafting your personal credit card signup strategy. Certain welcome bonuses or cards are unavailable if you are outside of these rules. There are also certain card family rules you should be aware of (examples of card families: Chase Sapphire Cards, Amex Delta Cards, Marriott Cards, Southwest Cards). These can also affect your strategy for getting a card in a specific card family. This article summarizes those rules and provides some tips to help you determine your strategy.

Marriott Cards

Marriott has some of the most complicated application rules. This is due, in part, to the fact that both Chase and American Express have co branded cards with Marriott. There are 3 main conditions you need to watch out for.

• If you have had certain cards open within the last 30 days, you are ineligible for the welcome bonus for certain cards
• If you have had certain cards approved within the last 90 days, you are ineligible for the welcome bonus for certain cards.
• If you have received a welcome bonus from certain cards within the last 24 months, you are ineligible for the welcome bonus for certain cards.

Frequent Miler has an extremely useful table to help determine if you are eligible for a certain card based on your past/current cards. You can find that here: Are You Eligible for a New Marriott Card?

American Express

American Express has many rules when it comes to getting welcome bonuses, but there is a silver lining. If you are not eligible for a welcome bonus, they will let you know that you aren’t eligible and let you stop the application before they do a hard pull on your credit. Also, if you are denied, they will not usually issue a hard pull on your credit either. You can also potentially avoid a hard pull if you currently hold an Amex card. This means there is not very much risk to apply for a card and see if you could potentially get the bonus. Here’s a summary of the rules:

• Welcome bonus is only available if you have never had the card/certain cards in the same card family
• Hard inquiries are combined into 1 when you are approved for multiple cards the same day
• You can get a maximum of 2 cards within 90 days (except for Pay Over Time cards AKA Charge Cards)
• You can have a maximum of 5 Credit Cards and 10 Charge Cards at a time

These rules may seem really strict, but there are some things to know. American Express seems to “forget” that you’ve had a card after 7 years, allowing you to potentially get the welcome bonus on the card again even though the terms say you can not get the bonus if you have ever had the card. American Express will also send out targeted offers with no lifetime language, allowing you to get the welcome bonus on a card again. The bonus is, there is really no reason not to try again anyway since American Express will warn you if you aren’t eligible for the welcome bonus and won’t do a hard pull if you withdraw the application at that point.

Now, about the family language added to the lifetime welcome bonus restriction. This is a newer addition to the American Express terms. The good news is, they seem to be using this language to encourage customers not to move from more premium cards to cards with lower annual fees. So, if you work your way up in the family, there’s no reason you can’t still get multiple welcome bonuses within a card family. For example, if you want both the Gold card and the Platinum card, get the Gold card first. Otherwise you most likely will not be able to get the bonus for the Gold card if you already have had the Platinum card. Always check the terms to be sure, and since it’s American Express, feel free to try and see if you get the warning.

There are advantages to having at least one American Express card in your wallet at all times since this will allow you to more easily get other American Express cards. Also, American Express will often send targeted upgrade offers with bonuses tied to a spending requirement. This allows you to get around the lifetime welcome bonus restriction in many cases. 

You can also refer friends or family (especially useful for 2-player mode) to get more points. These referrals allow you to refer someone to pretty much any American Express card (even if you don’t have the referred card currently). With these referrals you have the opportunity to potentially refer your player 2 to the next American Express card you want and vice versa and gain points from the welcome bonus and the referral. Be aware that referral offers may not be as good as the publicly available offers, so don’t refer someone if there is a better opportunity for them somewhere else.

Bank of America

Even though Bank of America does not offer transferable points, there are several of their cards that you may consider getting. The Bank of America application rules are not hard and fast rules, but you should be aware of them as they could potentially prevent you from getting the card you want.

• 3/12 Rule – You may not get approved for a card if you have opened 3 or more cards from any bank within the last 3 months.
• To get the same card again, you may need to wait either 24 months after you opened the card before, or 24 months after closing the card.
• Consumer Credit card applications are limited to 2 within 2 months, 3 within 12 months, and 4 within 24 months.
• Hard Inquires within 30 days may be rolled into one (not guaranteed)
• Bank of America may limit you to 5 Personal Cards.

The Bank of America application rules are designed to limit churning. In the past, there were fewer limits, allowing you to get these cards repeatedly and earn tons of points or cash. However, this is less accessible now, but still within reason. The 24 month language is not uncommon on rewards cards, and is used on most co-branded Chase cards. However, you should make sure to check if the terms indicate 24 months after closing or opening the card, as that will change the amount of time you have to wait.

Barclays

Barclays has no known rules or specific language preventing you from getting the same card again and its welcome bonus. However, data shows that it may be hard to get approved for a new card. Hard inquiries are also combined into 1 if approved on the same day.

Capital One

Capital One has a few hard rules when it comes to credit cards, and there are definitely some restrictions to prevent opening a lot of cards for welcome bonuses.

• Welcome bonus can only be earned if you have not received the welcome bonus for the same card within the last 48 months
• Max 2 Consumer Credit cards per person
• Must wait 6 months between applying for another card
• Hard inquiries are often pulled using all 3 credit reports

To further complicate things, Capital One may be less likely to approve you for a card if you are constantly opening new cards with other companies. There is no known number of how many is too many. With that in mind, getting Capital One cards early in your strategy may be good. Or you could plan to get a Capital One card after you’ve taken a break from opening a lot of cards for a few months.

Chase

Chase has one of the most talked about credit card rules in the points and miles game, the 5/24 rule. Along with that rule, there are some other rules you should know about. 

• Must wait for 24 months after the previous bonus before applying for the same card again (for most cards). The Sapphire cards require 48 months and the Ink cards do not have a waiting period
• Better offers (in-branch, with partners, calling, etc.) may be available
• 5/24 rule: You usually won’t be approved if you’ve opened 5 or more cards within the past 24 months (most business cards don’t count towards your 5/24 count)
• Hard inquiries are combined into one if you are approved on the same day
• Usually you can not apply for more than 2 cards within a month
• You can only get one Sapphire card (Preferred or Reserve) at a time. If you’ve earned the bonus within 48 months on either of those cards, you are not eligible for the welcome bonus on either of the Sapphire cards
• Similar rule with the Southwest Rapid Rewards cards, except you only have to wait 24 months after receiving a bonus on any of the Southwest Personal cards before you can get another bonus (whether or not it’s for the same card)

The 5/24 rule plays a crucial role in your credit card strategy as it is very easy to open 5 or more cards within 2 years. However, there are ways around this restriction. The reason this is important is because Chase has a large amount of very useful travel rewards credit cards that you probably will want to open throughout your strategy.

The most popular method is to open business cards that don’t report to your personal credit report. Since Chase uses your credit report to determine if you are over the 5/24 count, these business cards allow you to open more than 5 cards within 24 months and still be eligible for a new Chase card. What most people don’t realize is that the requirements for a business card are relatively easy to achieve, and most people could classify something they already do as a business and be eligible for business cards (more information in this article).

Another strategy that can be useful is to group applications for new cards closer together. With this strategy you can potentially still open 3 cards total each year (6 cards every 24 months) with 2 of them being Chase cards. The key is to group 3 card applications closer together (within a few months) each year. By timing when you open the first card each year for when you’re below the 5/24 rule, you can open 3 new cards again. This takes a lot of planning and careful timing, but combining this with opening business cards could allow you to open way more than 5 cards every 24 months.

It’s important to know that authorized user cards do not count against 5/24. However, since these do show up on your credit report, Chase may initially deny your application even if you are under 5/24 in reality. A call to the reconsideration number explaining that they are authorized user cards will resolve this.

Citi

Citi has few rules when it comes to applications.

• You must wait 48 months between receiving welcome bonuses.
• Hard inquiries are NOT combined when approved the same day.
• Max card rules
  • 1 Personal card within 8 days
  • 2 Personal cards within 65 days
  • 1 Business card within 95 days

There’s not much to talk about here, it’s pretty easy to stay within these rules with some planning.

Discover

These cards are not as common in the points and miles space, but in case you are considering any of these cards, here’s what you need to know: You can only have 2 cards open at a time and can only open a new card once every 12 months. There are no known restrictions on getting multiple bonuses.

TD Bank

No known application rules. As always, check the terms and conditions.

U.S. Bank

It can be very difficult to get approved for a U.S. Bank credit card. That is because they pull reports from lesser known credit bureaus. There used to be a way around this by freezing those reports, but that is getting more difficult as freezing that report might actually cause them to deny your application. Your best strategy may be to open these cards when you haven’t opened a lot of other cards.

Wells Fargo

You may have heard of the many issues people have with Wells Fargo. There have been a lot of questionable things that have happened with this bank; however, there are some potentially useful cards that are under the Wells Fargo umbrella, so don’t discount them immediately. My experience with the Wells Fargo credit cards has been a good experience overall.

• Often must have an existing banking relationship with Wells Fargo
• Limit one signup bonus every 16 months
• Hard inquiries are combined into 1 when approved on the same day

Getting into the Wells Fargo cards can be potentially difficult if you don’t already have a Wells Fargo account. However, if you’ve ever considered the Bilt Card you could potentially build that relationship through that card. I haven’t personally tried getting another Wells Fargo card yet, but from what I see in the rules, using the Bilt card to get to other cards could be a great way to start. Plus, the Bilt card is the only Wells Fargo card with transfer partners. 

The fact that you can get a welcome bonus every 16 months could be attractive if you are needing a consistent source of cash back since you could get no-annual fee card bonuses every 16 months. However, this is using up a hard inquiry and a 5/24 slot, so you have to weigh your priorities.

One of the most important discoveries for me was the idea of booking travel through airline partnerships. Different airlines have different methods of determining the amount of points needed for a flight. Because of this, certain airlines have sweet spots for points redemptions. A classic example is the Turkish Airlines sweet spot for domestic flights on United Airlines. 

Turkish Airlines uses a region based award chart for determining point redemptions. That means that flights cost a fixed amount of points depending on the beginning and ending region(s) of the flight. For example, you can fly anywhere within the United States for 7,500 points in economy and 12,500 points in business class. This includes Alaska and Hawaii, which usually have higher points costs via other airlines.

There are many more examples of booking flights using a partner airline instead of the airline you are actually flying on. However, since there are many airlines that use dynamic pricing, you can’t know the exact point price unless you actually search for the specific flight you want. For that reason, understanding alliances and partnerships can help you search effectively for the best redemption.

Partnerships

Airline partnerships are relatively straightforward, but can look different depending on the specific airlines involved. Basically, two airlines come to some agreement allowing customers of the both airlines to have access to more flights. This allows you to book flights for one airline using cash or points, through another airline’s program. This also lets you book a flight with multiple segments that might have different airlines on each segment (assuming they’re partners). 

I won’t go into all of the specific partnerships around, as there are too many to list, and they can change over time. So, the easiest way to find out is to look on a specific airline’s website for their partners. Keep in mind that some partnerships may not allow you to book flights using points, so make sure to check what’s possible, and even confirm with a search for a specific redemption you have in mind.

Alliances

Airline Alliances are similar to partnerships, except they include a large group of airlines all working together. This massively increases the amount of locations you can reach as well as the potential sweet spots for your points. There are 3 airline alliances: OneWorld, Star Alliance, and SkyTeam.

OneWorld Airlines

• Alaska Airlines
• American Airlines
• British Airways
• Cathay Pacific
• Finnair
• Iberia
• Japan Airlines
• Malaysia Airlines
• Qantas
• Qatar Airways
• Royal Air Maroc
• Royal Jordanian
• Sri Lankan Airlines

Star Alliance Airlines

• Aegean Airlines
• Air Canada
• Air China
• Air India
• Air New Zealand
• All Nippon Airways (ANA)
• Asiana Airlines
• Austrian Airlines
• Avianca
• Brussels Airlines
• Copa Airlines
• Croatia Airlines
• EgyptAir
• Ethiopian Airlines
• Eva Air
• Lot Polish Airlines
• Lufthansa
• Scandinavian Airlines
• Shenzhen Airlines
• Singapore Airlines
• South African Airways
• Swiss
• TAP Air Portugal
• Thai Airways
• Turkish Airlines
• United Airlines

SkyTeam Airlines

• Aerolineas Argentinas
• AeroMexico
• Air Europa
• Air France
• China Airlines
• China Eastern
• Czech Airlines
• Delta Air Lines
• Garuda Indonesia
• ITA Airways
• Kenya AIrways
• KLM
• Korean Air
• MEA (Middle East Airlines)
• SAUDIA
• TAROM
• Vietnam Airlines
• Virgin Atlantic
• Xiamen Air

In short, if you want to book a flight on a specific airline check if a partner airline has better value for your points. This can be especially useful if you have transferable points that can be transferred to multiple airlines within an alliance. Before deciding where to transfer your points, check which airline has the best value for your points. 

Also, alliances have elite status that can be matched from airlines within the alliance. These elite statuses can give you  benefits such as priority boarding, access to airport lounges, extra baggage allowance, or other benefits. 

Use the lists up above as a reference when you’re looking for benefits or flights to expand your options and find great value for your points.

The value of points can be a very complicated question. There are multiple ways to value points, but in the end, value is dependent on how useful they are to you personally. There are 3 main ways I use to value a points redemption: Cents Per Point (CPP), out-of-pocket costs, and personal value.

Cents Per Point

The Cents Per Point method is pretty standard across the points and miles community. This is mainly because it creates a good comparison value to determine if you are getting a good value out of the points you are using. 

CPP is calculated by taking the total cash price of a redemption and dividing it by the number of points required for that same redemption. For example, a $300 flight that costs you 15,000 points has a value of 2 CCP ($300/15,000=0.02). However, this value is not as useful on its own and is more useful in comparison to other potential redemptions. 

CPP is often compared to the reasonable redemption value (RRV). A reasonable redemption value is determined by analyzing different redemptions that can be made with a certain type of points without too much difficulty. The purpose of comparing a particular redemption’s CPP with the RRV is to make sure you are getting a decent amount of value out of your points.  This is especially useful if you have multiple points that can be used for the type of travel you want. Comparing the CPP, as well as using the RRV, can help you determine which points to use in order to get the most value out of your points. However, this is not the only way to value a points redemption.

Out-of-Pocket Costs

One of my favorite ways to value a points redemption is with the out-of-pocket costs. This method looks at the price of acquiring the points and redeeming them to travel. There are multiple ways to use the out-of-pocket costs. You can use the method to compare redemptions (directly comparing the out-of-pocket costs, or comparing the cash saved), or you can use it to determine if a particular redemption fits within your available travel funds.

Both of these methods have merit. I typically use the latter to determine if a trip fits within my available funds. I set a determined amount to save each month for travel and pull money out of that fund for travel expenses (including annual fees for credit cards to get points). This allows me to keep track of what I’m spending on travel so I don’t overextend myself.

Now let’s look at how that works: simply take your total costs to acquire and spend your points. These items typically can include annual fees for credit cards, fees spent on items to meet the minimum spend (if you wouldn’t normally pay that fee, taxes & fees for flights that aren’t covered by points, baggage fees, resort fees, and other such items that are necessary for your points redemption but aren’t paid for with points. 

Note that I’m not including food and activities for your trip, as those would be something you pay using points or not. I also don’t include the amount spent to meet the spending requirement. Exceptions to this are fees on credit cards that you can typically avoid but can be useful for meeting spend requirements. Such fees are incurred when paying taxes, utility bills, rent, purchasing visa gift cards, or other such purchases that have some sort of fee (percentage or flat).

For example, if it takes one credit card to get enough points for the hotel stay you want, the out-of-pocket cost would be the annual fee of the card and any fees charged in cash for the hotel. Many hotel programs will waive resort fees when you use points, but sometimes they won’t, just make sure to check so you can keep track of your out-of-pocket costs.

The out-of-pocket cost method helps me to determine if a specific redemption will fit within my available funds for travel. This method will also influence my credit card strategy. For example, a low out-of-pocket cost redemption may allow me to take multiple trips that year. Or, I may decide to open some cards to increase points (outside of getting points for a planned trip) giving me more flexibility for higher out-of-pocket cost trips in the future. 

Getting points in this manner allows me to spend money now, when I have extra in my travel fund, and save the points for a future year when I plan on taking a trip with a higher out- of-pocket cost. This is just like the typical method of saving money for a future trip, but with points, you can get there exponentially faster than with the traditional saving method.

CAUTION: Points often lose value over time, just like inflation, and can also expire in many cases so be careful while collecting lots of points for the future. You may find that the points you’ve accumulated might not get you as much as you were planning when you earned them. Or, if you’re not careful, you may lose all of your points to expiration before you use them. However, having a good bank of points can also be useful for last minute or unplanned trips, so decide what will work best for you. Make sure to stay organized and plan any points saving carefully to account for expiration. Also, only collect points in this manner for programs that you are more likely to use in the future.

As a side note, if you’re getting close to using up your travel fund, cash back cards can be useful to increase your travel fund allowing even more flexibility for travel. The trade off here is that you may limit cards you can get in the near future (see this application rules article for more information). 

As you can see, the out-of-pocket cost method is extremely useful for organizing and planning future travel using points and miles without spending more than you can manage.

Personal Value

The personal value you get out of a points redemption can not easily be quantified, so most people don’t even try. In the end, it comes down to what you want. For example, you may get a better CPP for your points by booking a domestic flight with one stop through Turkish Airlines, but you may get better personal value by flying direct. Or you may not even consider domestic flights to be a good personal value if you want to travel internationally. You see where it gets difficult? It all depends on what’s important to you.

Using personal value to determine if a points redemption is valuable all comes down to how you feel about it. If it makes you happy, regardless of the numbers, it has a high personal value to you. This method is all about getting away from the numbers and using the points to get the travel you want, not just what has a good CPP or a low out-of-pocket cost. This can also lead to different card strategies for everyone since the points that have more personal value are going to be different for everyone.

Comparing the Valuation Methods

Let’s look at an example and compare the valuation methods. Let’s say you have $1200 a year (saving $100 a month) to spend on travel and you want to take a trip to Madrid, Spain. Using the points and miles strategy, that money would need to cover food, activities, and ground travel, taxes and fees that can not be paid with points, and annual fees for cards to get points.

Let’s say you booked the following for two people:

Flights – American Airlines for 115,000 miles (57,500 each person) and about $172 in taxes and fees round trip

Hotels – Crowne Plaza Madrid – Centre Retiro Standard Room for 150,000 points for 7 nights

You could get these points using these example welcome bonuses:

American Airlines Miles –  AAdvantage Aviator Red World Elite MasterCard ($99) – 75,000 miles after one purchase on main card, one purchase on authorized user card, and paying the annual fee (all within 90 days)

IHG Points – IHG One Rewards Premier Credit Card ($99) – 140,000 points after $3,000 spent in first 3 months

To get the necessary points, you and your travel partner would each open the AAdvantage Aviator Red World Elite MasterCard. Doing so, and meeting the requirements for the bonus,  you’d pay $198 in annual fees for the flights. ThenaAfter meeting the spend for the IHG One Rewards Premier Credit Card (which has a base 3x points per dollar or 9,000 points by meeting the spend), you could easily end up with enough points for 7 nights at the Crowne Plaza Madrid. That’s with 140,000 points from the bonus and at least 9,000 points from meeting the spending requirement (you may need to spend a little extra to get the full amount of points needed). Getting the points for the hotel stay would have an out-of-pocket cost of $99 for the annual fee on the card.

This results in a grand total of $469 for both the flights and hotels, leaving you with $731 in your budget for food and other costs. Of course, you could also open a cash back card to extend your travel fund even further if you feel that $700 wouldn’t be enough cash for your trip. Compare this to $1716 for the same flights and $1015 for the hotel for the same dates. You would have paid about $2731 using cash but only $469 using points to book the same flights and hotel. That’s $2262 in savings!

Now let’s look at the CPP for this example and compare it to the RRV for those point currencies: 

For the flights, your CPP would be calculated by taking $1540 (deducting the taxes and fees you have to pay anyway) and dividing by 115,000 points. That gives you a CPP of  1.3. If we compare that to the RRV for American Airlines miles of 1.3, you’re getting a reasonable value out of your points. 

For the hotels, you would take the $1015 and divide it by 150,000 points. This gives a CPP of about 0.67. The RRV for IHG is 0.63 meaning you are getting a slightly higher value out of your points than the RRV.

Neither of these individual redemptions shows outstanding value when compared to the RRV. Using these points for a different redemption may give you a better CPP value compared to this redemption and possibly compared to the RRV for those points. However, you have to take into account the personal value of the redemption as well.

Let’s say you have always wanted to go to Madrid, are you going to care if you’re getting better than the RRV for your points? Probably not. In fact, depending on how badly you want to go to Madrid, you may even be willing to get a value that is much lower than the RRV for your points. 

These types of situations make CPP and RRV completely irrelevant to you personally. The fact that, for this specific example, you’re getting the RRV is just a bonus. However, if you don’t care when/where you go specifically, you may want to look for a higher CPP from your points so that you can travel more in the future or take a trip that typically costs a lot more in cash. Of course, in either case, you also have to take into account the out–of-pocket cost and whether or not it fits with your financial situation.

As you can see, the value of your points isn’t strictly a numbers game. I tend to focus first on out-of-pocket costs because I want my travel to fit within my overall financial plan first. That’s the whole reason I got into using points and miles. A good CPP tells me if I’m getting a decent value for my redemption, but I always look at the personal value of the redemption first. I’d rather go somewhere I’ve always wanted to go than get a great CPP value. I do try to get a CPP that at least matches the RRV for the type of points I’m using though.

You can see a list of RRVs here on the Frequent Miler blog. I feel that they have the best reasonable redemption valuations out there so there’s no reason to redo the work.

Bonus Method

There is another valuation method to consider when it comes to redeeming points: opportunity costs. Choosing to earn/use points in one way versus another way has a hidden cost. This cost comes in terms of the value you miss out on  by earning or using points a certain way. An easy example of this is cash back. If you are spending $5,000 on a card to get x number of y loyalty points, you are missing the opportunity of using that $5,000 to earn cash back. 

For example, let’s say that a welcome bonus gets you 60,000 points with an RRV of 1.3 after you spend $5,000 on the card within 3 months. That’s $780 worth of travel, but it’s limited to the loyalty program (or their partners if it’s transferable). If you use a 2% Cash Back card instead (without the welcome bonus), you would earn $100 of cash that can then be used for anything.

For most people, this is a no-brainer. Why would you give up $780 in travel, that could potentially be even more for $100 in cash back? This trade-off is one of the things that credit card companies rely on. Most people use points for cashback, missing out on the much more lucrative potential for traveling with points. 

What if you’re not working on a welcome bonus? What if you’re deciding where to spend $500 at a grocery store each month? This is where things get more complicated because it depends on a lot of variables. These variables could be how many points you have in other programs, your travel plans, the spending category bonus on the card, and what welcome bonuses you are working towards. 

As you can see, this can get really complicated very quickly. I recommend worrying about this further down the road when you have enough points that you aren’t going to use them up very quickly. This gives you more room for these kind of decisions since you aren’t necessarily needing points for a specific trip.