Video Sunday Reader Question: Will Canceling a Credit Card Raise Red Flags With Banks?

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TPG reader Howard writes in asking about what happens when you have several cards with a bank and want to cancel one:

“When I call to cancel a credit card, will the agents be able to see info on the other cards I have open with that provider?  

I’m thinking in particular about the Citi (but of course this would be good to know for Chase and Amex as well).  Last year I got the American Airlines Mastercard, and I’m thinking about getting the Visa version now.  If I get the Visa card, when I go to cancel the Mastercard one in a few months (due to annual fee), will the fact that I recently got the Visa raise any red flags?”

Yes, an issuer will be able to see what other cards you have open with them as well as any other accounts when you call, but don’t let that stop you.

Some people feel timid about calling in to cancel a credit card and avoid an annual fee, but banks are used to this because they have a lot of customers who are savvy points collectors. They know that they need to offer compelling products and bonuses to keep us as customers. So if you call to cancel the Mastercard and you want that Visa shortly after, you shouldn’t have an issue.

Some issuers such as Barclays are cracking down and saying that you can’t get the same or comparable products over and over again, but churning is still possible, and many issuers will let you do it.

Chase in particular seems to take a general overview of your products and your entire line of credit when deciding whether to issue you a new product. I’ve personally gotten multiple Ink bonuses – not for the same card, but for getting the Ink Bold and then the Ink Plus, which are slightly different, one being a charge card and one being a credit card.

So anytime a bank creates a new card – whether it’s a new business version of a card, or one that is a Mastercard instead of a Visa, or what have you, you should be able to get that bonus again. It becomes trickier when you’re trying to get the same exact product again – for instance if you got 100,000 British Airways miles the first time the BA Visa offer came around and then you wanted to apply for the exact same card right now because you can earn 50,000 Avios with $1,000 spend in 3 months plus 50,000 more when you spend $20,000 within your first year (that offer ends in February 2013).

When calling your bank, just be honest with them and tell them why you want to close the account – that you’re not seeing value out of having the product and want to try something new. In Howard’s case, the big difference between the World Mastercard and the Visa Signature is the host of secondary benefits like using Visa Signature hotels and things like that. While I haven’t done it myself, a lot of people have reported success using that argument when churning both the standard Sapphire Preferred Visa and the Mastercard version of the card, which no longer seems to be around for the moment.

Feel free to comment below with your own experiences churning and strategies for racking up those bonuses.

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