Multiple Credit Cards for Points

Note: This post has been expanded and turned into a more permanent page: Maximize Credit Cards for Travel which discusses the various considerations including how your credit score may be affected in a more organized fashion.

Multiple Credit Cards for Points

Considering the Effect on Credit from Applying for Multiple Credit Cards

For the last couple of years I’ve seen the promos for credit cards and thought that the sign up bonuses, while nice, were insufficient for any real travel (especially if you aren’t racking up points elsewhere) and not worth the trouble. Then I discovered that the limitations of getting a single card can be overcome by churning cards and applying for multiple cards. This left the issue of how it would impact my credit score, so I dug through an excellent but terribly long thread about credit and this are the key points I’ve dug out (caveat emptor: I am not a credit professional … these are from what I read):

Key Effects on Credit

  • hard credit pulls happen when you ask for credit, and shouldn’t happen if an institution has done a soft pull to increase your credit limit or to offer you a product.
  • hard pulls should drop your score by 4-6 points immediately but are not the only way in which your score can be affected by new credit.
  • the point losses from a hard credit pull effects diminish after 6 months and are irrelevant after between 1 and 2 years (as long as you keep your score high you should be able to churn cards as long as you quit 1-2 years before looking for a mortgage/line of credit).
  • hard pulls done in the same week should show up as a single check in the formula so requesting multiple cards on the same day should hurt less
  • most hard pulls are done against Equifax while a few, like Amex are done against Trans Union – choosing applications that hit different organization will hurt less (you will still get new credit hits) as they will reduce different scores.
  • new credit is considered a risk and may bring your score down. This negative effect on your score will be increased by having a shorter credit history and opening multiple credit products in a short period of time. New credit becomes older credit after a year or two and the negative effect diminishes.
  • holding three credit cards is most favourable … more or fewer can hurt your score (although a bunch of old ones would be good)
  • keep the balances ideally under 30% or at least under 75% (doesn’t matter if you pay it off every month … trying to average under 30% usage if you can). Be careful when cancelling credit cards that you don’t increase your balance percentage too much.
  • keep your oldest card … don’t get rid of it but you can downgrade a fee based card to a non-fee based one and keep the history if you want. The age of your oldest card helps … and the average age of all your cards helps so having a really old card or a couple of older ones is better (with a 20 year old card you can have 3 brand new ones and still have a 5 year average … the older your cards the more you should be able to churn at one time). Be careful cancelling older cards that will decrease the average age of your cards.
  • keep a card with a high limit if you don’t have older cards with high limits … you don’t want to increase your overall credit ratio of balance/limit too much
  • use a new card for minimum 3-6 months so that it reports R1 instead of R0 … make sure you use it at least once (and pay it off) just before cancelling so it shows up as R1 on the credit report (this applies to any old cards that haven’t been used in ages … use once, pay, THEN cancel)… ideally use every card once a month to keep them reporting. A card that is R0 (to new to report) will affect your score negatively and will not be looked on favourably by any person approving your credit. A card that is closed R1 should not affect your score if it does not increase your credit usage percentage significantly (e.g. move you above 70% usage).
  • missed payments stay on your record for 7 years (longer exceptions involving bankruptcies) but it’s only reported if you miss by 30 days or more (except Sears who report right away). Missed payments can have a major affect on your credit score and should be avoided at all costs.
  • dropping store credit cards helps your credit.
  • having a mix of credit types helps your score (lines of credit etc).
  • there are lots of places that show you what percentage of your score comes from paying on time, new credit etc … they don’t always say that the fine print says that mix may change depending on your profile.
  • if you keep your score above 650 you should have few problems getting credit. If you keep your score above 700 you will be looked on very favourably.

Credit risk in a nutshell

If you have a long credit card history, a mix of credit types, always pay your bills on time and keep a low balance on all your revolving credit, aren’t looking for a mortgage or line of credit in the next year and your score is above 750 then you should be able to apply for multiple cards (2-5) at one time comfortably (unless you have a short credit history). To be certain you can check your scores before and after you’ve started applying for cards. Leave 3-6 months for your credit to start recovering before applying again. One or two cards every 6 months will have a lot less affect than a so-called app-o-rama (several cards at once – monitor your credit score carefully if you try this).

How do you know your score? Go to Equifax or Trans Union – Equifax, at the time of writing, had a free month for their basic monthly service (scores update every 3 months), which can be updated by phone for a free month of the premium service that updates daily.

Maximizing Points with Multiple Credit Cards

What is the benefit of multiple cards? One is to collect the greatest value of points that your credit comfort will allow. Lets take a look at a couple signing up to a few of the latest offerings:
Person 1:
– Signs up to Amex Aeroplan Gold with a referral & spends $500: 30K
– Signs up to Amex Gold Rewards (with referral from partner) and spends $500: 25K
– refers partner for Aeroplan Gold: 10K
– Signs up for TD Aeroplan Infinite and buys 1 thing: 15K
– Signs up for CIBC Aerogold Infinite and spends $500: 20K
Total: 100K

Person 2:
– Signs up to Amex Gold Reward Business (with or without a referral & spends $3000): 25K
– Signs up to Amex Aeroplan Gold (with a referral from partner) and spends $500: 30K
– Refers partner to Amex Gold Rewards: 10K
– Signs up for TD Aeroplan Infinite and buys 1 thing: 15K
– Signs up for CIBC Aerogold Infinite and spends $500: 20K
Total: 100K

They can now both go to Europe in business class (90K) with 2 stops plus a destination (there are fees involved … a lot less with United or Swiss than AC).

Instead they wait … mid year person 1 gets the Amex Business Gold Rewards (referred by person 1) and spends $3K: 25K
Person 2 gets the Amex Gold Rewards (referred by person 1) and spends $500.
They each get 10K in referrals.

Now they each have 135K in points … lets say they spend $750 per month on groceries/gas/pharmacy on their Gold Reward cards and $500/ month on other things on their gold rewards … that’s 2K Aeroplan points per month. In 15 months they will each have 150K points total and are off an around the world trip that could be worth $10K.


I was accepted for Amex Gold Rewards (hard pull on Trans Union), three Visa/MC cards (hard pulls on Equifax) and one Visa with no hard pull (pre-approval) in a period of 60 days. The first hard pull generated a 6 point hit. The score dropped another 9 points after a month but it’s unclear as to what triggered the drop. With all three non-Amex hard pulls reported and two of four new non-Amex cards reporting as new credit, the total drop is a little under 40 points. The new Amex card posted to Equifax two months after it was opened and I have not monitored Trans Union (nor do I deem it necessary). With one card left to report the total drop in credit score is almost 80 – still quite healthy but I will wait to see how long it takes to recover. My credit profile is appropriate and I monitor the effect.

Evaluating Travel Credit Cards

Note the bonuses mentioned here may be out of date but the analysis isn’t. You can look at the page Maximize Credit Card Points for Travel for in depth and up to date information on current offers.

There are a lot of different sites that compare credit cards but one thing I couldn’t find was some good advice on how to take advantage of signing up for cards just for their bonus points. Some sign-up bonuses require no minimum spend and so are “free points” assuming your credit score can absorb the hit (I’ll go on about that in another post later). Others require a minimum spend, and if you’re spending money on those, you aren’t earning points with your regular credit card which should be earning you at least 1.5c per $ (while the data here is focussed on Canadian credit cards the principles are the same elsewhere). Is it worth it to spend your money meeting a minimum spend on a card for the sign-up points? This is a sampling at a point in time but the principle can be applied with other cards.

This analysis assumes that one signs up for a card and only keeps it for one year to maximize the value of the sign-up bonus and any free for first year offer, and cancels the card before having to pay for a 2nd year. Some cards may be worth keeping but that’s being ignored for the purpose of this analysis. The only thing being looked at here is that one gets a card and makes the minimum spend (if any) required to get all the sign up points. One thing to take into consideration though is insurance when redeeming points. BMO World Elite is one of the few cards that provides rental car insurance and flight cancellation insurance if you pay only partially with your card or use points – most cards do not provide insurance if you use points. This is not a problem with cards where you book and pay, then claim back points later, but it can be when you need to book with points.

The table below has the following columns:

1) Card – the name of the card

2) The cost of the card for the first year. Some are $0 as at the time of writing they waived the first year fee.

3/4/5) The bonus for signing up. Some require a minimum spend ($500/$1000/$3000 in 3 months), others only one purchase, and the CIBC cards a bit of both. I am only counting points … if you want to factor in the value of airport lounge passes, trip insurance etc whose value will vary greatly by need then you can do the math and write your own blog add it in a comment! 😉 )

6) The total value of the bonus and the points from the minimum spend assuming you make the minimum spend. This assumes that Aeroplan, CIBC Aventura and RBC Avion points are worth about 1.5c per point. YMMV.

7) The “free value” column is the value of the sign-up bonus assuming you made 1 purchase but missed the minimum spend, minus the cost of the card.

8) The last column is the return on each $ spent. This is the value of the total points (minus card cost) if the minimum spend is met divided by the money spent to earn the points (not including card cost). This is a way of prioritizing spending … for instance the Amex Aero Gold card returns 91,5c in points for every $1 spent vs the business version that returns 14c in points for every $ spent (in fact all the cards except the TD Aero Infinite Privilege vastly outperform what you would pocket in points from your day to day card – that TD card would lose money, although it may have other benefits that are worthwhile) . The TD Aero Infinite returns $225 for every $1 spent assuming you just but $1 of stuff. This value needs to be seen in context as the CIBC cards would return the same value as the TD Aero Infinite if you don’t spend the $500.

Note … these tables assume that you get the referral bonuses which are available for some Amex cards (e.g. Amex Aero Gold is 20K bonus without referral and 30K with referral), otherwise the value may be less (you can consider this link for Amex Aeroplan cards or this link for Amex Gold/Platinum rewards cards to get the referrals, all of which I will get a bonus from – the links I provided for other cards I do not get any benefit from). Nor does this table assume any value you may get from making referrals with your Amex card (10K/15K) which can add to the value of those cards.

Aeroplan cards.

card offer deadline first year cost free bonus purchase bonus min spend total value free value return per $ spent
Amex GR unknown 0   25000 $500 $390 $0.00 0.78
Amex Plat unknown 299*(699)   60000 $1000 $619.75 -$299.00 0.6198
Amex Bus GR unknown 250   25000 $5000 $140 $0.00 0.028
Amex Aero Gold unknown (April 1 2014 for Distinction bonus) 0   30000 $500 $457.5 $0.00 0.915
Amex Aeroplan plus unknown (April 1 2014 for Distinction bonus)   5000   $1 $75.015 $75.00 75.015
Amex Aero Plat unknown (April 1 2014 for Distinction bonus) 499 25000 26000 1000 $266 -$124.00 0.266
TD Aero Inf Priv May 9 2014 399 25000   $1 -$24 -$24.00 -24
TD Aero Inf May 9 2014 0 15000   $1 $225 $225.00 225
TD Aero Plat May 9 2014 0 10000   $1 $150 $150.00 150
CIBC AeroGold Inf March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225
CIBC AeroGold March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225

* The fee for the Platinum card is $699 but each calendar year you get a $200 travel credit. If you get the card mid-year you can get two travel credits and cancel before the year is up … I used $299 as the fee. If you won’t use the credits the math works differently.

Note that the TD cards don’t advertize the first year free but if you call in or go to a bank you should get the card for free. I’ve had to get the people in the branch to phone Visa to verify that the first year is free. The May 9th deadline is for the bonus short-haul companion flight offer – the deadline for the 15K Aeroplan points and first year free is unknown.

Non Aeroplan Travel cards:

card offer deadline first year cost free bonus purchace bonus min spend total value free value return per $ spent
BMO World Elite June 1 2014 0  30000 + 4 lounge passes 0 $1 $300 $300 300.00
Capital One Aspire April 30 2014 $120 35000 + $75 0 $1 $305 $305 305.00
RBC Avion Infinite
unknown 0 15000** 0 $1 $225  $225 225.00
Scotiabank Gold Amex March 31 2014 0  15000 (+ $300***) 0 $1 $150 ($450) $150 ($450) 150.00 (450.00)
CIBC Aventura Inf March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225
CIBC Aventura March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225

**RBC Avion is free the first year if you have an Infinite card from another bank – there may be issues with customer service reps asking you to cancel your old card – hang up and try again. I’ve pegged the value of RBC points at 1.5c per point … like Aeroplan points there’s a huge variation in the value of those points. There’s a link above to a good summary article about this. You can convert to BA points, in the past with a 50% bonus from time to time. Fixed rate redemptions are 1c per point. Avion Air Travel Redemption Schedule can get you over 2c per point.

***Scotiabank is offering $300 on top of 15K to those with preapproval.

BMO points must be redeemed at a fixed rate when booking directly from BMO travel service.

Capital One Aspire World, Scotiabank and TD points can be redeemed after the fact on purchases from any travel provider via the card. Capital One has a tiered system that needs attention to maximize value, while Scotiabank and TD are at a fixed rate.

RBC points must be redeemed for RBC rewards with a variety of values or transferred to British Airways points.

CIBC Aventura points must be redeemed for flights from CIBC with a variety of values.

UPDATE: Added details about the TD first year free and deadline and on all card redemption options.