Chase Card Strategies
Update: In April, 2016 Chase is likely to institute a much stricter approval process for their co-branded cards. More info here.
Yesterday I wrote about recent shift in Chase’s policy towards getting credit card bonuses multiple times. Basically they went from a policy of allowing cardmembers to get a sign-up bonus only once per product to a policy where you can get the bonus every 24 months.
This new policy brings forth some interesting possibilities with their hotel credit cards, especially the IHG Rewards Club, Hyatt & Marriott co-branded cards.
Chase Hotel Card Strategy
Each of those cards not only has a sign-up bonus, but they also have annual bonuses for keeping the card. The IHG Rewards Club card gives 1 free night annually in any of their hotels, while the other two cards give a free night in lower category hotels.
The interesting thing about Chase is that they tend to deposit the annual bonus into your loyalty account on your card anniversary date. While the annual fee is technically charged at the same time, you have 60 days to cancel the card without paying it.
This leads to a situation where you can get the annual bonus and still cancel the card without paying an annual fee. Chase has not been known to ever claw back the annual bonus after you cancel the card, however I am not sure if that is possible or not if they choose to do it.
Maximizing Under the New Rules
Before analyzing scenarios, lets look at the new two part 24 month rule mentioned above. First, to be eligible for a new cardmember bonus, you must not have received a bonus for the same product within the past two years. You must also not be a current cardholder.
With that information in mind lets look at the best strategy to maximize the bonus on these hotel cards. I will use the IHG Rewards Club card as an example. Currently the best sign-up bonus is from a zombie link which is known to give 80k points after spending $1,000 in the first 3 months.
IHG Rewards Club Card Scenario:
- Month 1: 80k points new member bonus
- Month 13: 1 Free Night – Pay $49 Annual Fee
- Month 25: 1 Free Night – Cancel card after the annual free night posts
- Month 25 1/2: 80k points new member bonus
With this new policy you could theoretically get 2 free nights and 160,000 IHG Rewards Club points within two years for the cost of one $49 annual fee. To really maximize, you could also try to call retention to get Chase to give you another bonus or waive the annual fee in month 13.
Now lets look at the Hyatt card (my review) which has a sign up bonus of 2 free nights anywhere.
Hyatt Credit Card Scenario:
- Month 1: 2 free nights at any property new member bonus
- Month 13: 1 free night at a category 1-4 property – Pay $75 annual fee
- Month 25: 1 free night at a category 1-4 property – Cancel card after the annual free night posts.
- Month 25 1/2: 2 free nights at any property new member bonus
In this example you can get 4 free nights at any Hyatt and 2 free nights at a category 1-4 property for the cost of the one $75 annual fee (see retention possibility above).
While I have personal experience with both the IHG & Hyatt cards and their annual bonuses posting right on the anniversary date, I have never had the Marriott card. Based on my understanding, it should work the same way as the other two.
Keeping Card Benefits
In these scenarios since you will only be without the card for a short period in between cancelling and signing back up, you should keep most benefits of the card including status and perks.
The worst case scenario is that you will temporarily lose status and perks only for the small amount of time you will be without the card. In my experience though status tends to go in annual cycles and canceling a card won’t immediately mean a downgrade. Other benefits like the 10% rebate on the IHG card may go away temporarily.
Drawbacks & Warning
I want to make it clear that I am not advocating that people do this, but recognize that this information may be of value to some people. In my opinion Chase is a very valuable bank to have a relationship with and they may spot this type of behavior and view it negatively.
Despite having thought of this scenario, I have personally chosen to keep my IHG Rewards credit card open and pay the annual fee. I get great value out of the free night and it is one of my oldest Chase cards so it helps my average age of accounts.
It is possible to get two sign-up bonuses and two annual bonuses on select Chase hotel cards for the cost of one annual fee (or less possibly) based on Chase’s new policy. Whether you want to do this or not is a personal choice.
So what do you think? Is this something that you would try?
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