Is there any good reason not to constantly open new credit cards and bank accounts?

[Basedbaby]

I’m always getting offers for new credit cards and opening new bank acount where I get $200 or $300 bonuses for signing up. Is there any good reason not to constantly sign up for new ones for the bonuses. I’ve made $300 already this year and I’m about to open a new bank account that comes with a $300 bonus just to open a acount use it till I get the bonus then close it out.

[stevemckenna]

Mirin. Sounds like you cracked the code.

[TugOfPeace]

Nothing wrong with it. Last year I got from different banks..

Wells fargo - 325
Citizens - 900
Truist - 400
Sofi - 250

Didnt pay taxes on any of it

This year so far..

Capital One - 750
Citi - 300

[TCmaxxing]

Credit card churning is better. Just open new cards for signup bonus and cancel after a year and onto the next

[radrd]

You have to pay taxes on those bank account bonuses. That's income.

[TugOfPeace]

You have to pay taxes on those bank account bonuses. That's income.

I've never paid taxes on those. Its too small an amount for the IRS to go after someone

[SaviorSelfJT]

You do have to pay taxes on it, the threshold for not having to report it is only like 15 dollars. If your not reporting it, your gambling on getting audited because the IRS does know about it whether you report it or not

The companies have also gotten way more vigilant about not letting people abuse these rewards. You can do it a little bit, but you can't do it like those guys on /r/churning did ang get thousands per year in rewards

[Basedbaby]

Nothing wrong with it. Last year I got from different banks..

Wells fargo - 325
Citizens - 900
Truist - 400
Sofi - 250

Didnt pay taxes on any of it

This year so far..

Capital One - 750
Citi - 300

Based I’ve only been doing credit cards so far but about to start doing banks too

[Basedbaby]

You have to pay taxes on those bank account bonuses. That's income.

How is that income it’s a bonus. Do you also pay income on cash back for money spent?

[radrd]

I've never paid taxes on those. Its too small an amount for the IRS to go after someone

It's over $10 and reported to the IRS. You might get a bill from Uncle Sam.

[JackyChin]

Nobody's making more than $50/hr on these sorts of bonuses. Opening/closing/tracking credit cards and bank accounts is annoying and time consuming.

The exception is the brokerage bonuses, if you're a whale. You can make an extra 2%/yr or so on those, which adds up big time over a lifetime. It's only worth your time if you're literally a millionaire though, otherwise your time is better invested in yourself to increase income.

Scroll down to see examples. https://www.creditdonkey.com/promotions/etrade/

[Basedbaby]

It's over $10 and reported to the IRS. You might get a bill from Uncle Sam.

What about cash back like if I get 3% cash back and every year they give me a couple hundred bucks am I supposed to pay taxes on that too?

[SaviorSelfJT]

How is that income it’s a bonus. Do you also pay income on cash back for money spent?

Cash back isn’t counted as income, it’s consider a discount/refund

[radrd]

How is that income it’s a bonus. Do you also pay income on cash back for money spent?

Credit card rewards are considered rebates on purchases and aren't taxable income. Bank bonuses are paid out as extra interest and are taxable.

^wizard

[Basedbaby]

Cash back isn’t counted as income, it’s consider a discount/refund

How is a bonus any different you have to spend x amount of dollars to get the bonus in the first place. Most $200 bonuses require you to spend $1k in the first 3 months.

[Basedbaby]

Credit card rewards are considered rebates on purchases and aren't taxable income. Bank bonuses are paid out as extra interest and are taxable.

^wizard

Oh gotcha I haven’t done any bank ones yet I’ve just been doing credit cards so far. So if I do one of the bank accounts they will send me a tax form right, So I don’t have to keep track of it myself?

[radrd]

How is a bonus any different you have to spend x amount of dollars to get the bonus in the first place. Most $200 bonuses require you to spend $1k in the first 3 months.

From thr IRS's perspective, the credit card company is giving you a rebate of $200 on your purchases and you only spent $800. Your income didn't increase so it's not taxed.

[radrd]

Oh gotcha I haven’t done any bank ones yet I’ve just been doing credit cards so far. So if I do one of the bank accounts they will send me a tax form right, So I don’t have to keep track of it myself?

They are supposed to. I didn't get one mailed to me for an account and I had to find it online, but they should at least provide digitally. I think most still mail a hard copy 1099-INT.

[SaviorSelfJT]

How is a bonus any different you have to spend x amount of dollars to get the bonus in the first place. Most $200 bonuses require you to spend $1k in the first 3 months.

It doesn’t make any sense to me that cash back isn’t counted as income too, but it is the way that the IRS treats it

[LtGoose]

You have to keep using the card to keep it active or when it closes your credit score takes a hit for not only closed account but length of credit history.

[PaulJerome]

Is there any good reason not to constantly open new credit cards and bank accounts?

FICO will take a small hit from the credit inquiries and the new credit.

[NealIRC]

I'm White but know what the hell you going through.

Here's some non-BLM advice.

I use 3 diff credit cards from 3 diff banks.

Chase for the 5% season cash back.
Capital 1 for the 3% cash back on grocery stores and restaurants.
Fidelity for the 2% cash back on anything else.

Every 3 months Chase Freedom cc has a 5% cash back, this 3 months is grocery stores. Sometimes it's gas stations or Walmart.

With grocery stores you don't go into the smaller Mexican / ethnic grocery stores unless you buy a lot, they don't want to see the 5% cash back cc, that's where you go to the big corporate chain grocers like Jewel.

Ironically the 3 cc from the 3 banks all got me some $200 cash back upon opening, i.e., spending $500 in 3 months. I prolly had 2 ccs with Chase and Capital 1 that offered I guess.

Should I open more ccs?

It's hard to do that without having a bank from them. I do want to open a 4th bank, and it's for the wrong reasons. Cuz none of my 3 banks offer coin machines anymore. I would have to open with WinTrust bank to use coin machine.

[NealIRC]

You have to keep using the card to keep it active or when it closes your credit score takes a hit for not only closed account but length of credit history.

I think if you have an active cc and a inactive cc, if they're both from the same bank, should be okay. I still hear closing the inactive cc will hurt your credit score more.

[Basedbaby]

I'm White but know what the hell you going through.

Here's some non-BLM advice.

I use 3 diff credit cards from 3 diff banks.

Chase for the 5% season cash back.
Capital 1 for the 3% cash back on grocery stores and restaurants.
Fidelity for the 2% cash back on anything else.

Every 3 months Chase Freedom cc has a 5% cash back, this 3 months is grocery stores. Sometimes it's gas stations or Walmart.

With grocery stores you don't go into the smaller Mexican / ethnic grocery stores unless you buy a lot, they don't want to see the 5% cash back cc, that's where you go to the big corporate chain grocers like Jewel.

Ironically the 3 cc from the 3 banks all got me some $200 cash back upon opening, i.e., spending $500 in 3 months. I prolly had 2 ccs with Chase and Capital 1 that offered I guess.

Should I open more ccs?

It's hard to do that without having a bank from them. I do want to open a 4th bank, and it's for the wrong reasons. Cuz none of my 3 banks offer coin machines anymore. I would have to open with WinTrust bank to use coin machine.

What’s the point on having more bank accounts? I have like 6 credit cards and they all are connected to my 1 bank account

[radrd]

What’s the point on having more bank accounts? I have like 6 credit cards and they all are connected to my 1 bank account

This and you can even have two credit cards issued by the same bank. I have two Citi cards and it doesn't cause any problems. They'll even link the cards under one login if you want.

[2011change]

Dosent opening and closing accounts hurt score?

I been having my 3 steady CC accounts for 10 years now. Over 800 CC

[outfoxxed]

Churning is good money but at the end of the day it’s not that good. A free 200 here and 200 there is nice but it’s still just a couple hundred

[Bando]

I've never paid taxes on those. Its too small an amount for the IRS to go after someone

The IRS will spend $2,000 to collect $200 in taxes, trust me, I've been through it.

[Basedbaby]

The IRS will spend $2,000 to collect $200 in taxes, trust me, I've been through it.

So I’m good as long as I only do the credit cards right? Paying taxes is such a nightmare as is not trying to make it even more complicated

[AlexxVann]

I do similar with credit cards with velocity rewards points, open and close credit cards.

Currently have enough points for return flights from Melbourne to Vegas.