Plan to Keep a New Credit Card for at Least a Year
Regular readers of Lifehacker will recognize our employees’ love for boring finance. This is especially true for credit cards. Using the same credit cards over the years improves your credit score by increasing your credit history .
But we understand that. Credit cards offer attractive bonuses to new customers, and even our own employees need fancy new cards that offer the coolest rewards.
However, if you are applying for a new registration bonus card, make sure you plan to keep the card for at least a year. A Points Partner recently noted this, highlighting that American Express is saying that if you close or downgrade your Delta SkyMiles card in the first year you hold it, your sign-up bonus may be canceled.
Here is the language American Express uses in its cardholder agreement, with The Points Guy’s key points in bold:
“If we determine, in our sole discretion, that you have engaged in abuse, misuse or gambling in any way in connection with a welcome offer, or that you intend to do so (for example, if you have applied for one or more cards to receive a welcome offer (s) we did not plan for you; if you cancel or downgrade your account within 12 months of purchasing it ; or if you cancel or return purchases you made before the Threshold Amount is reached), we cannot credit the welcome offer before, we may block the accrued welcome offer or withdraw the welcome offer from your account. We can also cancel this card account and other card accounts that you may have with us. “
We’ve mentioned this before: you must behave in your best possible way in order to receive the privilege of earning and retaining your sign up bonus. Credit card issuers know that welcome bonuses are the best way to earn points and miles quickly, and if they suspect that you are using your ability to earn with your cards, you could be accused of misusing the reward .
Solution? Sign up for new credit cards for a long time to come, not just what you can get right away. Weigh the benefits of a bonus card – and which you will actually use – against the annual fees it charges.
And if, after a few months of using the card, you are really disappointed in it, call customer service to discuss your options. For example, if you sign up for a bonus card just a few months before you know the annual fee will go up , that could be a legitimate claim that you can discuss with the issuer.
They will most likely not waive your annual fee, but they may want to move you to a lower tier card without penalizing you for requesting a change right after you open the card.