Hi experts, can I ask if we can apply for many credit cards(say 3/4, one from each bank) to take advantage of all the signup rewards then close all the credit cards a few month down the road? - Seedly
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Credit Cards

Anonymous

Asked on 11 Dec 2019

Hi experts, can I ask if we can apply for many credit cards(say 3/4, one from each bank) to take advantage of all the signup rewards then close all the credit cards a few month down the road?

What are the implications and do banks even allow that? Will there be repercussions?

For example, I am seeing singsaver got $200 cash reward for every credit card signup, can easily get a few hundred dollars by applying Citibank, HSBC etc etc

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Bjorn Ng
Bjorn Ng
Level 9. God of Wisdom
Answered on 12 Dec 2019

Yes, you can. Just take note that you can only cancel the card after 6 months, and once cancelled, there is this "cooling" period (I think it's 1 year?) whereby if you sign another CC with that bank, you will still be considered as an existing customer. But do take note though, certain banks will still reject your application (probably later on down the road) if they see your record that you will do this. Haven't faced any of this yet personally.

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šŸ‘ 2

Hi anon,

Yes, it is allowed. The banks are aware. What they are banking on is that someone will eventually get sucked into the banking ecosystem where the real revenue will be made.

You can say that the banks are throwing money at people to sign up. They have factored that into the cost of the business. Sometimes, out of 100 people who sign up with the card, it just takes 10 of them who continue to do business with the bank that lets them break even. Although there have been the occasional product launch that does a little too well in encouraging signups without any clear reason for holding on to the card....

This model is quite prevalent in US. In Singapore, I'm seeing Citibank reward long term card holders with promotions, so that seems like a bank whereby you'd like to sign up and hold on to the card forever.

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Jacob
Jacob
Level 6. Master
Answered on 13 Dec 2019

Hi Anonymous, collecting all these signup rewards really does seem quite attractive. So you may take it as an experiment across the different banks while you hop around, to determine which bank(s) provide you with the most satisfied service. A note to always keep track of your expenses and pay these bills on time as the cards you have on hand multiply.

It seems most cooling period is also 12 months from the last time you had an existing relationship with the bank, for you to be considered a "new-to-bank" customers. One exception that I have heard of is that for Citibank - cancelling the Citibank Clear Student card does not have such a "cooling period". Not sure how true this is, or if anyone in the community could verify this.

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Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 8. Wizard
Answered on 11 Dec 2019

Yes, banks do allow you to take advantage and close the credit cards a few months or rather, many months later.

Banks know that there are many clients that open and close the credit card later, so there are now more incentives for people to spend $X amount of money on their card before they get a bigger bonus (more miles, some expensive gift)

Periodically, some banks will SMS their card holders and let them know if they spend $X in 2 months or etc, they will get a gift, usually something that is quite valuable.

Banks are gradually rewarding such users rather than outright giving for first card opening, you may want to stick to those cards in the long run =)

Having many credit cards has no damage, but when you try to apply for property loans, the banks may ask you to provide documents and spending records of all the cards you have in the past 2 years. That may be be extra hassle for you if you have 10, 20 credit cards.

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šŸ‘ 0
Choon Yuan Chan
Choon Yuan Chan
Level 9. God of Wisdom
Updated on 11 Dec 2019

Yes, i am an expert in this trick and have done this for 5 years. However, for sign up promotions you can only sign up for 1 card per bank at one time to enjoy the sign on promotion with the exception of AMEX.

My trick is that i will sign up for one card , cancel 9 months later. Wait 12 months and sign up another credit card with the bank .

Banks have been allowing that, however at my third cycle so far. Ocbc has been rejecting my applications ( they do quite good due diligence). As for Stan chart, you can only enjoy the bank sign on promotion - cashback once, then stanchart X card another try.

Singsaver promotion is new so it will take a few years to experiment

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šŸ‘ 0

Each credit card has its own terms and conditions associated with the sign-up promotion. Accordingly, cancellation may result in clawback as well as any other implications stated in the terms.

Additionally, you risk damaging your credit score in the short run. Therefore, it is unwise to proceed to this end.

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