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hey everyone welcome back to the channel
so in this video i wanted to talk about
the eight things that i think about when
i'm about to apply for a new credit card
now i don't have some sort of exact
checklist that i go through every single
time that i want to apply for a new card
but i do keep these eight things in mind
because first of all i want to make sure
that the new card that i'm going to
apply for makes sense for me and my own
situation and second of all i want to
make sure that the new card that i get
fits into my overall credit card
strategy that way i can maximize the
value that i get out of credit cards
within my everyday spending habits so as
always make sure to go ahead and
subscribe down below to help support the
channel and let's get right into it now
these are going to be in no particular
order but the first thing that i think
about which is so important for
maximizing the value that you get out of
credit cards and that is going to be the
chase 524 rule and this is also going to
fit in with the second thing that i
consider which i'll talk about next year
but many of you probably already know
this rule or at least have heard of it
in the past so really quickly the chase
524 rule is just an unwritten rule that
chase has which has been proven from
data points that says that you will not
be approved for any new chase credit
cards if you've opened five or more
personal credit card accounts across any
issuer over the past 24 months so why is
this going to be an important thing to
consider well chase has some of the best
credit cards available when it comes to
welcome bonuses points earning
categories and other benefits as well
and the chase ultimate rewards points
that you can earn with some of these
chase credit cards are some of the most
valuable and flexible points when it
comes to redeeming those points for
different travel redemption options so
it's generally the best practice to
prioritize getting certain chase credit
cards first before you move over to
getting credit cards from other issuers
later so for example i'm at 3 24 right
now which means that over the next few
months when i decide that i want to go
get some new credit cards i'm going to
be focusing on chase credit cards first
to maximize the value there and then
later on after i'm happy with the chase
cards that i have i can focus on getting
credit cards from amex capital one city
and others like that and this leads me
to the second thing that i think about
when i'm looking to apply for a new
credit card and this is something that
applies to many other areas of life as
well and i've talked about it in other
previous videos and that is going to be
opportunity cost so in its most basic
definition opportunity cost is
essentially the cost of what you were
giving up by going with one option over
another option potentially when you get
one credit card over another let's say
that you went with credit card number
one which gives you a 100 welcome bonus
when you could have went with credit
card number two which is very similar to
credit card number one but that would
have given you a 250 welcome bonus right
there the difference between those two
welcome bonuses is 150 so that is going
to be your opportunity cost of what you
could have had instead this also ties
back into the chase 524 rule so as
another example let's say that you've
opened four personal credit card
accounts over the past 24 months that
means that you're under the chase 524
rule and eligible to get approved for a
new chase credit card if you want to as
long as everything else on your credit
card application looks good you could
open the chase sapphire preferred which
has a 60 000 point welcome bonus as of
the filming of this video and that is
going to be worth 750 towards travel you
book through the chase portal even
though the sapphire preferred has an
annual fee of 95 you could still come
out way ahead in the first year of
having this card with a net positive
value of 655
but what if instead you first decided to
get the city custom cash card while you
were at 424 that's another really nice
no annual fee credit card that i like to
recommend to a lot of people it has a
200 welcome bonus attached to it so
again really nice positive value that
you're getting from that card as well
however by getting the custom cash card
first you now put yourself at five
credit cards open over the past 24
months so now you cannot get the
sapphire preferred card and that welcome
bonus and all those points until you're
back under the chase 524 rule so even
though you are getting a nice 200 of
positive value from the custom cash card
you're missing out on 655
of positive value on top of that which
is going to be your opportunity cost
here now what i would do in this
situation if i wanted both of these
credit cards is first while i was at 424
i would apply for the chase sapphire
preferred get the thousand point welcome
bonus after spending four thousand
dollars on that card in the first three
months of having it i would also have to
pay that 95 annual fee in there as well
but that's okay because again the net
positive value at the end of that is 655
then after that i would be at 5 24 so
again i'm over the 5 24 rule i would no
longer be eligible to get approved for
any new chase credit cards until i'm
back under that rule so at that time
after i've gotten the welcome bonus
squared away and all that i would go
ahead and apply for the no annual fee
city custom cash card and get the 200
welcome bonus with that credit card so
by being patient and thinking
strategically about the chase 524 rule
and opportunity cost i would be able to
walk away with a net positive value of
855 combined compared to just 200 if i
had only gotten the city custom cash
card first so hopefully that all makes
sense but again just make sure that
you're thinking of the bigger picture
when you're applying for new credit
cards and make sure that you're always
getting the most value possible because
believe me over the past several years
i've accumulated thousands and thousands
of dollars worth of credit card rewards
just by considering these things okay
next for the third thing that i'm
considering before i apply for any new
credit cards and that is going to be the
minimum spend requirement that many
credit card issuers are going to require
you to reach before you can receive a
welcome bonus so i think about minimum
spend requirements in a couple of ways
first am i currently working on any
minimum spend requirements for any newer
credit cards that i recently got and if
i am do i still have a lot of spending
that is left until i reach that
requirement and get the welcome bonus
it's really important to think about the
current minimum spend requirements that
you might be working on at the moment
because what i'll see people do a lot of
times is they'll apply for several
credit cards at once or several credit
cards over the course of just a few
short months then they're working on
several minimum spend requirements at
the same time that can cause them to
overspend just because they don't want
to leave all those high welcome bonuses
of points or cashback on the table so if
i'm working on one minimum spend
requirement then what i'm gonna do is
i'm gonna wait until i'm completely
finished with that minimum spend or at
least almost completely finished before
i apply for any newer credit cards that
also have a minimum spend requirement
and the second way that i think about
any minimum spend is am i going to be
able to reach that amount by spending
organically within my everyday spending
habits or is the amount going to be too
high and not really worth it now i've
made a video before talking about the
different strategies that you can use to
plan out all that minimum spending that
way you do make sure that you always get
those welcome bonuses no matter how high
that minimum spend requirement is but
for a lot of people especially if you're
on a tighter budget or if maybe you're
younger and you don't have that many
expenses i would say to definitely be
careful of trying to reach these high
minimum spend requirements that are
often found on more premium travel
credit cards you just do not want to
find yourself overspending only to get
some credit card rewards i know there's
a lot of people out there online
especially on certain online forums
that'll talk about all the different
plans and all the different strategies
that are very in-depth just to game the
system a little bit to get all those
points and all those rewards but there's
always one quote that i come back to
from the famous credit card hater
himself dave ramsey and it goes
something like this no one has ever
become wealthy from credit card rewards
and even though he is very anti-credit
cards and i disagree with him on that
stuff dave ramsey does know what he's
talking about when it comes to many
other areas of money and he's right i've
never met anybody in my life who said
that the secret to their wealth building
strategy and the reason they became a
millionaire was because they used credit
card points and credit card rewards i
mean that just kind of sounds silly when
you say that out loud so what i'm trying
to say is that credit cards and all
their welcome bonuses and points and
cashback and all that stuff that should
mainly be coming from your typical
organic spending that you do for your
normal monthly expenses but one very
important thing that you must avoid is
overspending and that's why i always
recommend you stick to some sort of a
budget that way you have some high
visibility over your finances and my
budget is going to be the fourth thing
that i consider when i'm applying for a
new credit card now not only is a budget
going to be important for making sure
that your credit card spending is in
line with your expected monthly expenses
but it's also going to be very
beneficial for your overall financial
health because it'll show your income
versus your expenses that way you can
see whether your cash flow is positive
or negative on a monthly basis so
because my ultimate goal is to build
wealth and financial freedom over the
long term my budget is going to take a
priority over any credit card spending
that i'm doing to earn some points for
free travel or stuff like that and guess
what even though i'm a very frugal
person and i stick to a budget and i
don't spend my money on too many things
honestly i've managed to accumulate
hundreds and hundreds of thousands of
credit card points and rewards over the
past several years that i've used to
fund several different trips including
two or three chips that i've already
planned for this year in 2022. these are
just points that i earned organically by
spending within my normal everyday
spending habits but instead of using
cash i just used what i found to be the
best credit cards and i use them
strategically that way i could
accumulate all of those points in the
best way that i found my budget has
helped to keep me honest within those
spending habits so i can see exactly how
much i'm spending it in different
categories each month and i can see the
grand total of that spending per month
then i'm able to better plan out what
welcome bonuses i can go for according
to which minimum spend requirements
actually fit into my budget and trust me
i'm constantly passing up different
credit cards and the bonuses associated
with those cards because i 100 believe
that my overall financial health is
infinitely more important than credit
card rewards i've said no to both
personal and business credit cards that
have huge welcome bonuses just because i
know myself and i'm going to be patient
i'm going to wait until larger one-time
expenses roll around for me and my own
spending with myself or my businesses
and that way my minimum spend
requirements are going to be easier to
hit that way i'm almost guaranteed to
get those welcome bonuses without
overspending so as an example one
business credit card that i've really
wanted to get is the chase inc business
unlimited card that is a good business
card and it gets you 75 000 chase
ultimate rewards points after spending 7
500 on this card in the first three
months that you have it but that's 7 500
of spending over the course of just
three months is a lot of spending for me
personally right now so what i'm gonna
do is be patient and smart and then wait
until later on this year when i'm most
likely going to be upgrading my macbook
pro to a larger more powerful 16-inch
model i know that's gonna be pretty
expensive as well but at least then that
spending could go towards a minimum
spend requirement i can get a welcome
bonus on a nice business credit card and
it all works out much better if i just
do it that way that's the mindset that i
want anyone that watches this channel to
have credit cards are a great thing
they're an amazing financial tool and i
love to talk about them and how we can
maximize the value that we get from
credit cards but overall personal
finance is much more interesting to me
that's why i say if you're going to be
applying for new credit cards then i
highly recommend that you use a budget
like mine to track your monthly income
versus your monthly expenses and you can
also check out a recent video that i
made talking about my simple budgeting
process which i think is so easy i'll
link that video up here and down in the
description below if you want to check
that out after this video there will be
a link to a free budget template in that
video too so go ahead and check that out
okay then the next two things that i
consider when i'm getting a new credit
card i'm gonna combine and talk about
them together here since they both can
get very specific and they vary a lot
from card to card depending on what
you're looking at getting so the fifth
thing that i consider is going to be the
annual fee of that card if it has one
versus the benefits of that credit card
and then the sixth thing that i consider
is going to be whether that card earns
cash back or points now not all credit
cards are going to have annual fees and
if you are a beginner with credit cards
then i highly recommend you just start
with simple no annual fee cards use
those for a year or two until you just
get used to everything but i like
certain annual fee credit cards that i
know are going to get me a net positive
value from all the credits benefits and
features even though i do have to pay
something out of pocket in the form of
an annual fee by constantly educating
myself and talking to others about
credit cards over the past few years
i've managed to develop a sense of what
credit cards are going to be worth it
for me and this is why i pay a little
bit over 1 000 per year in the form of
annual fees on my own personal credit
cards because i know that i'm going to
get far greater than 1 000 of value in
return from those cards i'm not going to
break it all down here because i've
talked about how i do this valuation in
previous videos but i will link another
video over here talking about how the
amex platinum card and its 695 annual
fee is actually worth it for me after
having that card for a little bit over
one year but i see a lot of people out
there just get certain credit cards that
have annual fees maybe because it sounds
good at first to them or because it has
some sort of prestige that they perceive
like the amex platinum card or the amex
gold card but they actually don't sit
down and do the quick math to see if the
credits and benefits on those credit
cards are worth it to them for paying
that annual fee so because i know my
spending habits very well and what i'm
looking for in terms of credit card
benefits i'm usually able to pretty
quickly match up what credit cards out
there actually match my lifestyle and
figure out whether it's worth it for me
and my situation or i'll have a plan in
place to downgrade an annual fee credit
card into a no annual fee credit card if
that's an option that's available to me
or i might even just close the card
after using it for a year or two if i'm
just trying to capture that welcome
bonus value and then don't plan on using
it in the future but i will plan all
that out in advance before i actually
get the card in the first place for the
sixth thing that i consider with points
versus cash back cards this is all a
very personal thing and it's just going
to vary depending on each person's
preference but for me i like to travel
and see new places and i plan on
traveling a lot over the next few years
so that is where my priorities are going
to be with getting new credit cards i
want to get cards that earn points and
miles that i can then turn around and
redeem for a little bit more outsized
value compared to cash back options but
for other people out there cash back
cards are going to be a great
opportunity even though cashback cards
might have a little bit less redemption
value compared to points it is still
technically the most flexible form of
points currency because you can do
whatever you want with cashback that you
earn so when i'm considering applying
for a new credit card i like to make
sure that it aligns with my overall
credit card earning goals so that means
right now in this moment i want to be
earning points that i can use for travel
and not so much cash back but for anyone
that's watching this just make sure that
you ask yourself what are you looking to
get out of credit cards but most
importantly of all make sure that you're
using your credit cards responsibly by
paying them off on time and in full
every single month those things are much
more important than any points or cash
back that you might earn all right then
for the seventh thing that i consider
with a new credit card application and
that is going to be when was my last
credit card application now this is a
question that i've had a lot of people
ask in the comments sections to my
videos how long should i wait between
credit card applications and to be
honest i'd like to make another video
talking about this topic in more detail
so make sure to go ahead and subscribe
down below if you haven't done so
already for more credit card content
just like this but i always like to play
it safe and not apply too quickly for a
new credit card if i just got another
one one reason for that is because i
usually only want to be working on one
minimum spend requirement at a time kind
of like i talked about earlier in this
video but another reason is because i
don't want to risk the chance of getting
denied or even getting shut down by too
many rapid credit card applications
because sometimes that can look bad to
credit card companies now for me as i
play it safe that usually means waiting
around two to three months between my
credit card applications could be a
little bit shorter than that could be a
little bit longer than that between my
applications so there's really no
definitive answer here it all just
depends on your own personal situation
the whole point here is just to be
patient there's gonna be so many great
credit card offers out there some will
come and some will go but rushing the
whole process is not going to be your
best bet if you're someone that's really
really deep into the whole credit card
game and you're constantly getting newer
credit cards each year and churning
through them and that's great if you can
do that but for me of course there's
going to be this time commitment to
research and find all the best new
offers out there plus then on top of all
that you're gonna have to manage dozens
of cards anyway and it is doable but
since time is such a valuable resource i
would much rather focus my time and my
energy on things that have potential to
generate much greater returns and more
value for me later on in my life
compared to just squeezing out extra
credit card rewards i've managed to get
plenty of points and benefits over the
years from my simple and straightforward
credit card strategy by using credit
cards naturally within my normal
spending habits so i think this is the
best way to go about it and finally for
the eighth thing that i think about when
i'm applying for a new credit card and
this is really something that i don't
think about too much anymore but that is
going to be my credit score now i'm not
trying to brag by any means here but
over the past six or seven years of
using credit cards the right way and
responsibly i've managed to build up my
credit score to a level where it now
just hovers in the high 700s
consistently so i can pretty much apply
for and get approved for really any
credit card that i want to and really
anyone can get their score to this level
over time with the right credit habits
but i know that for a lot of people out
there they're gonna see a new credit
card that they want to apply for and
then ask the question what credit score
do i need to get to be approved for this
card so for this i would just shift the
mindset a little bit and instead of
asking what credit score do i need to
get approved for this card i would ask
what can i do to increase my credit
score over the long run and it starts
with paying your credit card statement
balance on time and in full every single
month and by keeping a lower credit
utilization which are a few things that
i constantly repeat here on this channel
by doing those things you'll help your
credit score you'll avoid interest
charges and you won't have to worry
about some other common credit card
things like aprs and late fees because
they won't even matter so if you want to
learn more about how to increase your
credit score and when to pay your credit
card bill then make sure you go check
out these videos on the screen right now
from my channel if you haven't seen them
already but as always i just want to say
thank you so much for watching this
video make sure to go ahead and
subscribe down below but i hope you have
a great day and i'll see you in the next
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