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What’s the 90-day rule?
The 90-day rule is not as hard and fast as some of the other rules in travel hacking. I would call it a general guideline. But, when you are starting out, a very wise general guideline to adhere to. The 90 day rule is simply, do not apply for credit cards more frequently than every 90 days.
Why wait 90 days?
Opening several cards at once is the natural inclination when starting with travel hacking, but the banks don’t like that so much. While some have success opening cards in less than 90 days, there is a large trend of banks declining people who have had a hard inquiry from another credit card within 90 days. Hard inquiries don’t drop off for approximately 2 years, but within 90 days, your credit score typically recovers from the drop in points. This helps to protect your credit score. Aside from these, the 90 days gives you time to meet minimum spend, as most people are not meeting minimum spends in one month.
What’s the 12-month rule?
The 12 month rule is…..once you get a card, don’t close it for 12 months. There are a number of reasons for this:
- They could take the points back. – Several cards have a clause in the fine print that they can take back the points if you cancel under 12 months, and the whole reason we do this is for the points, so that’s not a great option.
- You can get flagged – if you are opening and canceling a lot of cards in under 12 month, the credit card companies could stop extending you credit cards.
- It can affect your credit score – When we look at the longevity of credit in our credit score, lots of cards with short timespans is not helpful to building that long term credit.
What can you do?
- If you want to cancel the card –
- First, check and make sure you can retain your points if you cancel.
- Second, if you are ready to cancel the card: Wait….
- Once the annual fee hits the account, but BEFORE it is due – call and cancel with the credit card company and they should get rid of the fee. (There is a small chance this won’t work, which is why it is wise to always make sure you can handle the annual fee for one year if it doesn’t work. However, it has always worked for me.)
- If you need to keep the card, but don’t want the annual fees –
- You could look into downgrading the card to a no-fee card.
- Check if you will lose your points if you downgrade
- As long as you will retain your points, you can call the bank and downgrade to a new no-fee card.
