By “ethical”, I don’t mean CFAI ethics… just your personal ethics.
You see those credit card offers where you need to spend, say $3000 in the first 3 months to get 40,000 points (Chase Sapphire for example). You sign up with the card, put all of your eligible spending in the next 3 months on that card, get the points they promise you, then leave… and rinse and repeat this again with another card.
I don’t see anything against the rules of the card or the law by doing this but it clearly seems that’s not the card company’s intention when giving out these giant bonuses to new customers.
I’d say it is ethical. You both are fairly playing the game within the stated rules and this time you won. Credit card companies are easily making up the difference on the zips who carry a balance and miss payments. Ain’t no thang bro. Keep on hustlin!
This kind of behavior is getting card companies to tighten up a bit. Amex has recently changed the T&Cs on a lot of their cards to say that if you’ve received a bonus points offer for a specific card, you’re never eligible for another one for the same card. Certain folks, perhaps like CvM just churned the same card over and over… what goes around comes around given enough time. I think companies are starting to realize that these crazy incentive bonuses don’t get you loyal customers, just cost you money.
Also, I know CvM is completely anti-CC fee but there are some cards where it makes sense to hold them despite the annual fee, though we had an entire thread debating this and CvM couldn’t see the logic or value behind it.
Yeah, I was in for a rude surpise when I tried to apply for the SPG AMEX card after getting the Delta Gold card and achieving the bonus… no more bonus for me…
Another reason I’m trying very hard to hit all the Chase bonuses this year before they catch on…
In an ideal world for any business they would be able to lock you in forever at extremely high margins for minimum service with no regulatory oversight. In reality it is more balanced. IMO you should help the balance in your favor any time you can (within the scope of the law). I don’t do that with credit cards but I don’t see anything wrong with it.
I don’t see it as unethical (although I don’t do it), but the credit card companies are getting wise. They will take into consideration if you’ve done this to them before when you apply for a new card. and you will get rejected if you’ve been found to play this rewards game.
It is fine and I would do it more often if I didn’t already have enough credit cards. I have two that I regularly use and two others that have benefits when I travel. That’s all I need.
Totally fine and fair game IMO. I would do it too, but I hate paperwork too much (of the irrational hate variety).
I might be biased though, since I hate retail financing, as in I am idelogically against it.
I am not talking about getting a mortgage on a house, though, which in many cases makes alot of sense.
I mean consuming on credit, or borrowing to go travelling, or bridging your next paycheck with a credit card. People earning 35K/year with as much debt on credit cards, wtf.
I am anti annual fee. I have yet to see a CC that has a fair incentive per the fee. Even travel cards that provide travel vouchers (Delta AMEX, AA CITI), the restrictions and hoops to jump through make the fee marginally worth it.
I’m not a point whore either; I like to get rewards and convert to straight cash as soon as possible. Point/Mile programs are inconsistent, can change, have restrictions, and often get devalued.
yes, but that doesn’t mean point/mile programs have no value. It is ethical and I do it. People always try to tell me having lots of credit cards or large amount of available credit is bad (even people on this forum have told me this). Yet I have an extremely high FICO score for being 25 (sufficiently over 800+ as of last statement). Just have to be careful with it. I use Mint and Wallaby to manage them.
Having too few credit cards also hurts your credit score. Some banks even explicitly want 2 or 3 or more lines of credit to qualify you for a mortgage. I thought this rule was kind of dumb, because you can have $10 million in assets but still be rejected for a $700k loan because you don’t have enough credit cards.
They play you; you play them. It’s ethical to take their offers for all they are worth - they know what game they are playing, have countless analysts looking over the options, and are counting on being better than you (or at least the average applicant) at it. They will find whatever piece of fine print they can apply to you if they gain a little more money, so you are free to do the same.
It’s not the same as finding a loophole in your agreement with an elderly neighbor down the street. With those, you should probably consider 1) what reasonable assumptions are each of you making about your transaction, 2) the degree of pain/damage that breaking them will cause, and 3) the likelihood that you will want to have continued interactions/arrangements with them.
I don’t know if it holds true for the rest of loans, but on Lending Club people with high incomes and low/0 DTI have historically performed worse than those with higher DTIs. I’ve always assumed they aren’t used to managing debt payments.
I’ve had an Amex with an annual fee for the last couple of years, and it has probably netted me several hundred dollars each year. With higher % cash back on groceries and gas, it made the card an easy decision for my household.
Credit cards still make money on every transaction, right? So even if you pay off the bill every month, they are getting something if you use the card.
