Update 2/24/12: Confirmed that this offer will expire at the end of February. Last year it also started in January and ran until the end of February, and didn’t come back until the next January. So get your applications in now if interested!

Update 1/9/12: Reader CC writes in with her success story, which differs from some previous reports of a one Discover card at a time limit. Please let me know if you have a different experience. I forget to add before – if you apply for the card and don’t get the credit line you want, call them up and tell them you want to do a $X,XXX balance transfer and they may work to accomodate you.

A few updates- I called Discover and they changed the policies again

1) you can have more than 1 credit card
2) You have to open a new card to get the promo they won’t apply it to the old one.
3)If you call and speak to a rep and give them a balance to transfer they will recalculate the credit line
4) They will let you transfer the old credit line to the new one ie I had a $7.3K balance on the old one so they left it open with $500 and gave me a new card with a $7K balance. I was able to keep my 5 yrs of credit history with the 1st card active. I’ll probably transfer the line back to the original place in a yr.
5) I just saved a year of interest on my Citibank student loans for $6,550 with 15 minutes of work 🙂

Back for 2012! Limited-time only. Just in time for some New Year debt-busting action, Discover has brought back the Discover More Card with No Balance Transfer Fee, offering 0% intro APR on both balance transfers and purchases for 12 months. You can literally borrow money for free and pay it back in 12 months (keeping in mind you’ll still need to satisfy the minimum payment each month until then). Use this opportunity to lower your interest rates and make every cent you pay go towards shrinking that principal. There are different versions of this card, so please use specific application link. No annual fee.

When you see the application, be sure to scroll down to the “Important Information” and verify that you are getting 0% for 12 months and no balance transfer fee. You should see the following text at the top under “Interest Rates and Interest Charges”:

APR for Balance Transfers: 0% intro APR for 12 months from date of first transfer, for transfers under this offer that post to your account by July 10, 2012.

And then the following a bit lower under “Fees”:

Transaction Fees * Balance Transfer – Intro fee of $0 for transfers that post to your account by 8/10/2012 with the 0% intro APR balance transfer offer described above. After that, 3% of the amount of each transfer.

Application Quick Tips
In order to get the highest credit limit possible, be sure to maximize your reported income as much as you can legitimately. You can no longer include the income of other people living with you, but do include things like freelance income, overtime, rental income, interest and dividend income, alimony, child support, etc.

If you wish to get cash directly from this balance transfer offer without it being classified as a “cash advance”, one tip is to request money to be transferred to other non-Discover credit cards that you have. This will create a negative balance, after which you request a refund check be sent to you. Citibank and American Express are recommended for this because they have automatic features on their websites to request a credit balance refund.

Arbitrage Opportunities?
Don’t have higher interest debt you wish to refinance? Really, the only thing I could see buying with this 0% money would be a US Savings I Bond that will earn you 3.06% for the first six months, and then a different rate based on inflation for the next 6 months. You can buy $5,000 in electronic bonds per person per year, and another $5,000 in paper bonds if you use your tax refund ($20k total for a couple).

Offer Comparison
Now, the Chase Slate® currently has a similar offer going, also 0% introductory APR for 15 months with $0 balance transfer fee. The good thing about Discover is that you can transfer balances on a Chase card to Discover, while you can’t transfer existing Chase balances to another Chase card. Other than that, why not take advantage of both? 🙂

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

(Update 2/23/12: The Continental/United Airlines merger is almost complete, and the last official Continental flight taking off on March 2nd. The new company will be called United, so this Continental Airlines OnePass Plus Card will no longer be available as of the end of February (March 1st). This is your last chance to grab the 30,000 mile sign-up bonus if you’ve never had a Continental card before. “This one-time bonus offer is valid only for first-time Continental Airlines personal cardmembers with new accounts. Previous and existing Continental Airlines personal cardmembers/accounts are not eligible for this bonus offer.”

Note that the application for the United Explorer Card says that “United MileagePlus Explorer cardmembers will only receive one 25,000 bonus miles award if they apply for both the United Explorer Card and the Continental OnePass Plus Card after 7/19/2011.” This isn’t mentioned on the Continental application. If you only have the older United non-Explorer card, you should still be able to get the Continental bonus.)

The new Continental Airlines OnePass Plus Card from Chase has improved their sign-up incentive to include 30,000 free miles and a pretty nice mix of perks for travelers.

Sign-Up Bonus: Free Flight

• 25,000 Bonus Miles after first purchase (no minimum amount) for first-time Continental Airlines personal Cardmembers. That’s enough already for one free roundtrip airfare within the continental US.
• 5,000 More Bonus Miles for adding an authorized user to your account. This is another easy one to get. Remember, just because you add someone doesn’t mean you have to give them the card. 😉
• No annual fee the first year. The regular annual fee is $95, but is waived the first year.
• If you spend $25,000 on the card annually, you’ll get another 10,000 bonus miles. Since you earn 1 miles per $1 spent as well, this works out to 1.4 miles/dollar when you reach that mark.

Travel Perks

• Free checked bag. If you fly on Continental, you and a companion will each get your first checked bag for free. That’s a savings of $50 roundtrip, per person.
• Primary rental car insurance. Almost all personal credit cards only offer secondary rental car insurance, which means you have to file a claim with your own auto insurance first, which means you have to pay the deductible and possibly face higher future premiums. With primary collision damage waiver (CDW) even for personal use, you get coverage for damage or theft without having to make a claim.
• Additional travel insurance that isn’t on all cards, like trip cancellation insurance up to $1500 for a illness with doctor’s note , delayed baggage coverage up to $300 if you have baggage delayed more than 18 hours and need to buy items to get by.
• If you decide to keep this card past the first year, you’ll get two free passes to their First-Class airport lounge.

As you may have heard, Continental and United are merging, and the resulting airline is supposed to have the name United. Here’s a chance to rack up some miles that will eventually merge together.

Not good enough? Currently, there are also other ways to rack up $500+ in credit card bonuses…

(Update: That was quick, looks like they are sold out. Perhaps they will replenish later.)

If you have some American Express Membership Rewards points lying around, perhaps from the American Express Platinum or the AmEx Rewards Premier Gold, then is for you. Reader David reports that right now you can get a $25 Gap gift card for 1,250 points when you redeem by January 29, 2012, which is 50% less than the normal exchange rate for gift cards ($25 = 2500 points). Supplies are limited.

Even if you don’t like Gap clothes, PlasticJungle.com and others from my gift card sellback website comparison will give you up to $83 for a $100 Gap gift card. That works out to a value of 1.66 cents per point (10,000 points = $166), which is much better than any other direct cash-out option, although some people may be able to get better value by redeeming airline miles for award flights.

Looking back, 2011 was a great year for credit card sign-up incentives. The major issuers rolled out some new cards and features and offered up big bonuses to get you to try them out. By picking up the tastiest offers, you could have reaped thousands of dollars in bonuses even with average incomes and without spending more than normal. If you have good to excellent credit, why not earn some money with it? Here’s what Mrs. MMB and I decided to jump on last year:

Chase Sapphire Preferred: $625 in travel
The Chase Sapphire Preferred® Card gives you 50,000 bonus points after you spend $4,000 in purchases within the first 3 months. With this new card, Chase is basically trying to make a premium card that competes with American Express, with their Ultimate Rewards rivaling Membership Rewards. (It’s metal and heavy, too!) For example, you can now transfer Ultimate Rewards points to Continental/United, Southwest, British Airways, Hyatt, and Marriott. This the same system the Chase Freedom card uses now as well.

But my favorite features are the cash options and the 20% bonus towards travel. 10,000 points = $100 cash = $120 towards travel at no markup (same price as Expedia, Travelocity, etc). You can mix points and cash however you like, which means 40k points = $500 towards any airfare or hotel nights. No annual fee the first year, $95 after that.

Ink Bold Business Charge Card: $500 cash or $625 in travel
The small business version of the Chase Sapphire, this card also offers a huge sign-up bonus. The Ink Bold® Business Charge Card from Chase gives you 50,000 Ultimate Rewards points – after spending $5,000 in the first 3 months your account is open. For more details, please see my Chase Ink Bold review post, including details on what constitutes a small business.

Citi ThankYou Premier: $500 in gift card or $665 in airfare
The Citi ThankYou Premier Card is another travel-oriented premium credit card gives you 50,000 ThankYou points after spending $2,500 within 3 months of account opening. The special feature here is that it offers you a 33% premium on when used towards travel. That means those 50,000 ThankYou points can be redeemed for $665 in airfare. They also have their own airfare portal with the same prices as Expedia, and you can also mix and match cash and points if you don’t have enough points to pay for the entire amount. For more details, please see my Citi ThankYou Premier review post. (Now expired)

Gold Delta SkyMiles Credit Card from American Express: 30,000 miles
The Gold Delta SkyMiles® Credit Card from American Express is not a great deal for everyone, but it works out very well for us. (It’s actually our second card, I had one previously.) My wife and I both fly cross-country together to a city primarily served by Delta at least once a year to visit the parents. The sign-up incentive is pretty good – 30,000 Skymiles after just $1,000 in purchases within your first 3 months.

More importantly, the card comes with a buy-one-get-one-for-$99 companion voucher (now expired) that saved us $250+ this year since it’s usually during a holiday. We’ve used this voucher before, and the prices are comparable to online travel engines, but you do get stuck with the taxes of $50 or so. The annual fee is free the first year, and $95 after that. You also get a free checked bag on every flight for you and up to 8 travel companions (so one card gets us two free bags as a couple, a $50 value per person each roundtrip). The total one-year value of this card is at least $600 if value a mile at a penny.

Grand total: $625 + $625 + $665 + $600 = $2,515
That’s just for four cards from three different issuers, which is far less than the most cards I’ve applied for in a year on my own. This means a couple could make over $5,000, which is 10% of the 2009 US median household income of $50,221 per US Census. As for us, we plan on making good use of this money to cover future airfare and hotel expenses. This total also does not include any earnings from cash-back rewards credit cards.

If we include the Ink Bold Business Charge Card, the required spending total was $11,000. Exclude the Ink Bold, and it goes down to $6,000, which if you use time-shifting techniques like pre-paying bills such as insurance/utilities or buying gift cards for groceries/gas, works out to a reasonable $500 per month. That’s well within our normal spending anyway.

Honorable mentions go out to three other cards:

• The Chase British Airways 100,000 miles offer came back in 2012, but both my wife and I already jumped on it previously and have already used it for a luxurious business-class trip around Europe.
• The Southwest Airlines card offered up 50,000 points (expired) which was good for over $800 in Wanna Get Away airfare after just one purchase of any amount. The current offer is 25,000 points for a still-respectable $416 in airfare. We don’t fly Southwest all that often, so we passed on this card this year.
• The Hyatt Card offers two free nights at any Hyatt in the world after any first purchase, which includes some rather swank hotels. There is a $75 annual fee. My sister got this card and we were pretty close to applying, but we wanted to hold off until we had firm travel plans since I believe you have a certain time to redeem.

My psychic powers tell me that some of you are wondering about this ;), so here’s the answer: How Opening and Closing Credit Card Accounts Affects Your Credit Score.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.” 

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

I’ve been taking advantage of credit card bonuses and rewards for over 10 years now, earning thousands of dollars in perks while paying zero interest. I can honestly say that sign-up bonuses have never been larger than today. My rule used to be that I would only apply in exchange for at least $100, but now cards with $500 bonuses have been around for several months. I basically paid for all my holiday shopping with them!

A common reader question is – how does opening and closing all these cards affect your credit score? I’ve answered parts of this question here and here, but here’s the all-in-one answer.

Credit Score Basics

Credit scores come from proprietary mathematical formulas, the most popular one being Fair Isaac (FICO). The input is the history and data from our credit reports. The output is a numerical prediction of our creditworthiness. Since we have 3 different credit reports (Experian, Equifax, Transunion), we have 3 different credit scores. They’ll never reveal all the ingredients to the secret sauce, otherwise they’d have nothing to sell us. Thus, we must make do with what we have. FICO has released this breakdown for us, along with many other collected details over time:

Effect of Opening New Credit Cards and/or Closing Existing Accounts

35% On-Time Payments. Not surprisingly, the biggest chunk of the score is your record of timely payments. If you pay your bills, you’re likely to… keep paying your bills! Briefly, anything 30-days late or worse can show up here, although a 60-day late or 90-day late is even worse. If you just barely miss a due date and pay it off within 30 days, it shouldn’t show up here. This factor has nothing to do with opening or closing credit cards.

30% Capacity Used. This refers to how much of your available credit you are using, also known as utilization ratio. The lower the better. Being maxed out on all your cards is obviously not a good sign. Utilization ratio is tracked both on an overall level and on a per card level. For example, having five different cards with a $1,000 balance each and $10,000 credit limit each (10% ratio x 5 cards) is better than having 4 cards with no balance and one card with the $5,000 balance (50% ratio on 1 card).

In the long run, having more credit cards would be a good thing as it should mean more available credit and a lower utilization ratio. For the same reason, you should never close a credit card unless not doing so would cost you money. You want to keep all the available credit you can.

15% Length of Credit History. The longer your credit history, the better. Both the age of your oldest account and the average age of all your accounts are tracked. Continuously opening new credit lines will thus hurt your credit score. At the same time, having a lot of old cards can “anchor” your average account age as well. If I already have 20 cards averaging 8 years old, adding another new credit card won’t make that average budge hardly at all. Recently, I learned that closing a credit card actually has no effect on your average age of accounts or credit history length. The closed account will stay on your credit report for 10 years.

If you have “young” credit history, you’ll need to balance the desire for new accounts (which will one day be old accounts) with how good your other factors currently are to keep a good credit score. Another strategy is to be added as an authorized user on someone else’s account with a long age. (They took this away for a while due to abuse, but brought it back. Just make sure it’s legit, for example with your spouse/partner or parents.)

10% Types of Credit Used. We’re getting to the lesser factors. How do I know? This factor refers to the mix of different credit accounts out there – revolving credit like credit cards, retail accounts (store cards), installment loans like auto loans, and home mortgages. Having a greater mix is better. However, I have never had a store card, auto loan, or a mortgage on my credit report, and my credit score has remained excellent. You definitely don’t need all of these types to have a good credit score.

Now, I do think it is a good idea to have at least some form of credit to show that you can handle the idea of borrowing something and paying it back. A credit card allows you to do this within the monthly grace period without paying any interest.

10% Past Credit Applications. This what everyone worries about, but it’s again we see it is only a 10% weighting. This factor makes sense though, as applying for a lot of credit in a short period of time is an indication of financial troubles. Therefore, you should be very careful with what are called “hard” credit inquiries. Hard credit inquiries (“pulls”) are usually from loan applications (asking for more credit). Soft credit inquiries occur when you are just checking your own credit score, or when other financial companies check your credit history as identity verification or for pre-approval offers (here, you didn’t ask for it).

Hard pulls affect your credit score negatively for a temporary period of time. For mortgage and auto loans, there are special accommodations by FICO for “rate-shopping”; All hard inquiries within a 14 day period for mortgages or auto loans will only count as one inquiry.

In regards to apply for new credit cards, it’s difficult to know the effect of a hard inquiry by itself, as a new credit card account will also affect the other factors above (average age of accounts, credit limits, utilization ratio). For someone with a longer credit history, a new credit card application will have little effect. For someone with zero credit cards, it will have a larger effect. The general consensus is that each hard pull knocks about 3-5 points off your credit score, and the effect decreases as time passes – after 6 months the effect is reduced, and after a year it is gone. The recording of inquiries does stay on your report for 2 years.

Takeaways

1. For a high credit score, the most important things to do are to pay your bills on time and not use all of your available credit limit. Don’t lose sight of this.
2. Applying for new credit cards will affect your score negatively for the short-term, with the effect going away over time and gone in a year. However, that doesn’t mean they aren’t precious. Only apply if it’s worth it through lowering your existing interest rates, upfront bonuses, cash back, or travel rewards. Hard pulls are the same as cash for me!
3. Never close an existing credit card unless you are avoiding a fee or in exchange for something worthwhile (like a mortgage approval). Closing an account never helps your score, but only really hurts if it makes up a huge chunk of your existing credit limit.

Based on my own experiences, my personal choice is to limit myself to about 3-5 credit cards per rolling 6-month period (more when there are good offers and less when there isn’t). My primary concern is not really the credit score, but more the fact that individual issuers might not approve me just due to the inquiries even though my score is fine. I’ve scored over $2,000 in bonuses the last year alone, and that’s not even including my wife.

p.s. It’s not FICO, but now you can get your free credit scores with no trial periods from all 3 major credit bureaus. Tracking them regularly can alert you to significant changes in your reports.

NavyFed Credit Union has a limited-time promotion going on until Sunday, December 11th where if you do a balance transfer from an external financial institutions to your existing Navy Federal card, you’ll get a fixed 0% promo APR for 12 months with no balance transfer fee.

Membership eligibility for NavyFed is primarily restricted to military personnel including Army, Marine Corps, Navy and Air Force – including retirees and family members – but also include some civilian employees in Department of Defense. From the “existing” wording, it doesn’t appear that this applies to new card applications.

December 11th is Balance Transfer Day. It’s also your opportunity to save big! When you consolidate credit card balances from other financial institutions onto your existing Navy Federal card, the savings really add up. Get a 0% fixed promo APR* on balance transfers for 12 months. After that, your current standard variable purchase rate applies. And you’ll save even more because we don’t charge a balance transfer fee. You pay absolutely nothing—unheard of anywhere else!

Well, although it is indeed hard to find a no balance transfer fee 0% APR offer these days, it’s not “unheard of anywhere else”. Last month, the Chase Slate® also came out with 0% introductory APR on both balance transfers and purchases for 15 months with $0 balance transfer fee and $0 annual fee. All you have to do is initiate your balance transfer within 60 days of opening the account.

Either way, both are a good opportunities to lower the interest rate on your existing balances and accelerate that debt-free payoff.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.  “The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

(Update 2: I’ve been notified that 12/22 may be the last day to apply for this $500 gift card offer from the Citi ThankYou Preferred card. The promo details remain as noted below, but I should point out that the Citi ThankYou Premier Card is also offering a bonus worth 50,000 points = $500 in gift cards. Learn more about the Premier card offer here.

Briefly, the Premier card allows you to get a 33% bonus when redeeming towards airfare. And it’s easy to use! Prices are the same as Expedia, and you can mix cash and points when redeeming. That makes 50k points with a Premier card worth $665 in airfare. The spending requirement for the Premier is lower as well. However, while the Premier has no annual fee the first year it is $125 for subsequent years, while for the Preferred card there is no annual fee period. Decisions, decisions.)

The Citi ThankYou Preferred Card has upped their game with a 50,000 ThankYou Point bonus broken down into two parts: You get 25,000 bonus ThankYou Points after $5,000 in purchases within 6 months of account opening, and you get an additional 25,000 bonus points after another $5,000 in purchases are made within the next 6 months after that. You do not need to qualify for the first 25,000 points to be eligible to earn the second 25,000 points. See below for details on how this is worth $500 in gift cards, airfare, or a check towards your student loan or mortgage. No annual fee.

This offer is both better and worse from their last 50,000 point promo back in June. The required spending is higher, although spread out over a much longer period. You basically have to spend $5k within 6 months twice, for an average of $833 a month. However, the last offer was for the Premier card with a $125 annual fee. This Preferred version has no annual fee.

ThankYou Point Redemption Options

Here’s a summary of your best values for ThankYou points, in case you don’t want to slog through all the many redemption options at ThankYou.com. In general, it takes 10,000 ThankYou (TY) points to redeem for a $100 gift card to retailers like Gap, Banana Republic, Barnes & Noble, Bath and Body Works, Bed Bath & Beyond, Cabelas, CVS Pharmacy, Kohl’s, Land’s End, LL Bean, Sears, Lowe’s, Home Depot, Staples, and Walmart. Bolded are my favorites. So with 50,000 TY points, you could get five $100 gift cards from different stores.

Want something closer to cash? For a check mailed to you, it costs 8,000 points for $50. For a statement credit, it’s 7,500 points for $50. A check mailed towards your mortgage payment or student loan (made out to your lender) costs 2,500 points for $25. This works out to 1 cents per point. Otherwise, it may be better to redeem your points for a Walmart gift card and then sell it for cash at a site like PlasticJungle.com that offers you 90 cents+ on the dollar. I just checked, and a $500 Walmart gift card would net you $455 in cash or $477.75 in Amazon gift certificates.

Now let’s look at the advertised airplane ticket option. A good question is whether a flight booked through the ThankYou Travel Center costs the same as through any other travel site like Expedia, Orbitz, etc. I have some old ThankYou points lying around, so I went to the redemption site and found that the prices are very closely aligned to what is offered at sites like Expedia.com. I did a few quick searches for random flights, and the cost of the flight matched up with the cost in points in a 100:1 ratio. For example, the exact same flight below that cost $360 including taxes and fees on Expedia would cost 36,000 TY points. ThankYou Travel Center screenshot:

Expedia.com screenshot:

Citi couldn’t stay way, given all the other $500 value offers still hanging around. I love that this is the new standard for a simple credit inquiry, and that basically my wife and I can score at least $2,000 in free money a year, exempt from taxes, with as little as two credit applications per year. (We actually do much better than this…) We just refinanced a mortgage and got a new homeowner’s insurance policy, so I know it’s not hurting us in other areas either.

Quick recap. 50,000 ThankYou Points = $500 in gift cards, ($500 Walmart Gift can be easily sold for $450+ online), $500 to pay down your student loan, $500 to pay down your mortgage balance, or $500 in airfare at the same rates as available at Expedia.com.

I like to keep track of the rotating categories of the 5% cash back cards out there, but one of the more disappointing areas was always Discover’s low purchase limits of only a few hundred bucks. From October 1st to December 31st, you can earn 5% cash back on up to $300 spent in the following categories: department stores, clothing stores, and restaurants. Not bad for gift-giving purchases, but Chase Freedom even had a commercial specifically about it, as their quarterly limits were $1,500.

Discover® More® Card
From October 1 to December 31, you can earn 5% cash back on up to $1,500 spent in the following categories:

• Online Shopping
• Department Stores

You must enroll online to activate the rewards each quarter. Discover card has a tiered cashback rate on other purchases (1% unlimited Cashback Bonus on purchases after your total annual purchases exceed $3000; purchases that are part of your first $3000 earn .25%.).

Essentially, for any quarter you can now earn $75 in cashback at 5% for certain categories, and usually one of them is useful like gas, restaurants, and department stores. These are also areas that you should be able to not spend more subconsciously just because it’s 5% cashback.