Yesterday I talked about why newbies should dip their toes in the credit card pool–the rewards are enough to travel for pennies in first class. In this post, I’ll give you an overly detailed explanation of how I would start today if I were new.
This post is as bare bones as I can make it and might leave you with a lot of questions. I hope it spurs a full interest in collecting and redeeming miles. I hope you’ll become a regular reader of MileValue. But if you just want to spend ten minutes now on the action items in this post and ten minutes a month maintaining your miles balance, that’s an option too.
The best current credit card offer is from Citi. It has two identical American Airlines cards, the only difference being that one has its payments processed by Visa and one by American Express. That’s mostly an irrelevant detail, but it means you can get both. Each has a 50,000 mile bonus after spending $2,500 on the card in the first four months, so that’s 100,000 bonus miles total after $5,000 total in spending. I’ll explain how to easily meet that spending requirement after explaining how to get the cards in three simple steps.
- Open two browsers, with one application in each browser.
- Complete the applications in unison.
- Call Citi.
1. Open two browsers, with one application in each browser.
Open up two web browsers. On my MacBook, Safari was preinstalled, and I downloaded Firefox, so I open those two. If you have a PC, open Internet Explorer and another one. (Download Firefox if you only have your preinstalled browser on the computer.)
Citi American Airlines Visa
Citi American Airlines American Express
(Note: I have removed the links because the ones in the post are dead, and the new links are ever-changing. Find the current highest links here.)
2. Complete the applications in unison.
Fill out the first application and click Verify Application. Fill out the second application and click Verify Application.
(If you don’t already have an American Airlines account and number, sign up for one in 60 seconds for free here.)
Now you are on the verification screen for each. If the information is all correct, click Submit Application on one then Submit Application on the other.
I recommend this method of applying for both at once because I (and many others) have found that if you submit the two applications the same day, you can get both cards. But if you submit one today and one tomorrow, the second application will be denied.
I recommend using two browsers because sometimes the cookies in one browser prevent submission of both applications.
Submitting two or more applications on the same day to Citi results in only one credit inquiry. That’s good because credit inquiries temporarily lower your credit score 2-5 points as I mentioned yesterday.
After submitting the application, you will be told whether you were approved instantly. It’s not big deal one way or the other. If you are approved for both, skip Step 3–you’re done.
If you get any other message about the application being received, pending, or being denied, note the reference number and call the telephone number listed on the page. If no telephone number is listed, call 800-695-5171. If no reference number is listed, the agent will bring up your application another way.
3. Call Citi.
Each call will only be about one card. Call Citi at 800-695-5171 and say: “I just submitted an application for the American Airlines Visa [or American Express, whichever you are calling about.] I am calling to see if you need more information to process the application.”
The agent will generally ask you questions that were already on the application. Answer them politely.
The only tough question you might get is why you want two cards at once. Don’t mention the sign up bonus. Instead mention another benefit of two cards–maybe the ability to track two categories of spending to help with your budgeting.
After a few minutes, most people are approved over the phone. If you are not, you don’t have to take no for an answer. Hang up and call a new agent. You may want to highlight any reasons why you are a good credit risk on reconsideration calls like your relationship with Citi or your history of on-time payments.
Once you are approved, ask the agent to confirm the sign up bonus details. The cards should offer 50,000 bonus miles after $2,500 in spending in four months.
Once you have finished one conversation, hang up and call back about the second card if necessary.
If all goes according to plan, you’ll be approved for both cards. They will be mailed to you, and you’ll get them within a week or so. Now, you just have to spend $5,000 total in four months. Here’s how:
1. Start with the American Express card. Use it for all purchases until you hit $2,500. You can pay almost everything with a credit card. You should try to avoid using cash for purchases. You can also prepay your wireless bill and other bills. If you have a two-year contract, and you can afford to prepay, this is an easy way to meet a spending requirement.
If the American Express isn’t accepted somewhere–Visas are more commonly accepted–use the Visa.
2. Once you meet the $2,500 spending requirement on the American Express, which you can track online, start using the Visa until you hit its $2,500 threshold.
3. If you don’t spend $5,000 in four months, there is an easy way to meet the requirement.
Amazon Payments is a service of amazon.com very similar to PayPal. The huge benefit is that you can send $1,000 per calendar month with a credit card without the sender or receiver paying a fee. If you made a $1,000 payment or loan each calendar month to someone you trusted to repay the loan, you would have $4,000 of the $5,000 requirements met easily.
Just do not send the $1,000 to someone and have them send it back. Amazon will shut your account down. The person should use the balance in their Amazon Payments account or withdraw the money to a bank account.
Once you meet a spending requirement, the miles will post to your American Airlines account on the next credit card statement.
By doing this, you’ll have 105,000 American Airlines miles–the 100k bonuses plus 5k in spending at 1 miles per dollar.
Is there an annual fee for these cards?
Yes, but it is waived for the first 12 months of holding the card. To avoid ever paying an annual fee, cancel the card before its anniversary. Do not cancel the cards immediately after the bonuses post though. Wait until you’ve held them at least nine months. Set an alert on your phone’s calendar now to remind you to cancel the cards.
Do the miles expire?
American Airlines miles expire if there is no activity in your account for 18 months. Any miles earned or debited restarts that clock, so as long as you are using the cards, you have 18 more months to use the miles.
If you cancel the card, do you lose the miles?
No, Citi puts miles into your American Airlines account, which are yours to keep even if you cancel the cards.
Other questions? Comment or email me.