Back Door Triple Dip
We have been talking about the triple dip a bit the last few weeks. Which makes sense, because it is the end of the year. The end of the year is when triple dips become reality, whether with Amex, Bank of America or some other bank. While you may already know about the triple dip I am here to talk about my back door triple dip dilemma. What exactly is a reverse Back Door though and how does downgrade options play a role into that? Let's dive into it!
What Is A Triple Dip?
Taking advantage of a triple dip is when you use calendar credit resets to your advantage. That, plus the extended time you get to close a card when annual fees post, opens up an opportunity. If you act quickly, at the beginning and end of your first year of card membership, then you can essentially supersize your yearly credits. This only works if you keep the card just for the first year. If you go past that then you lose the added value since you are paying another annual fee. Here is an example of the timeline of a standard triple dip:
- Sign up for a card with calendar credits, like the Amex Platinum airline incidental credit, in the middle of December.
- You have until 12/31 of that year to activate and trigger the credit for the current year
- After 1/1 of the following year the credit resets for the new calendar year giving you a second credit
- Yes, you would be able to get two credits within two or three weeks of each other.
- The annual fee will post in December of the following year (roughly 12 months from when you signed up).
- Sometimes this will take even longer and not post for a few weeks after your anniversary date
- With most issuers you get a 30 day grace period to cancel the card and get the second annual fee refunded.
- This pushes the timeline into January of the second year and another calendar credit reset.
That is how you can essentially get three credits, or a triple dip, in your first cardmember year. It is also why we say December is the best time to sign up for certain cards.
What Is A Back Door Triple Dip?
I totally just made up the back door triple dip term but it seems to fit well. This is an option for people that signed up for a card a little before December, like I did last year. It only works on certain cards, and with certain issuers, since it requires you to have a cheaper downgrade option. That is where American Express' handy downgrade options come into play. They have a wide variety of cards which allow you to downgrade to a cheaper card and get a prorated refund on the annual fee. This makes it possible to hold a card past the 30 day grace period and still get a chunk of your money back.
Downgrade Options Are Key & My Situation
Now that we know that a back door triple dip is possible because of downgrade options, let me go over my situation. I grabbed a no lifetime language offer for the Amex Business Platinum last November for myself and my wife. The original plan was to save the offer until December to do the triple dip. I ended up needing the cards before that for some spend, so figured I may be able to pull off the back door triple dip.
The annual fee posted on November 30th for both of our cards and the payment is due December 26th. I grabbed one more wireless credit this month and I am waiting for that to post before making a final decision. Reminder that they are taking forever right now, which isn't too unusual. This timeline means I don't have enough time to just hold out until January 1st and use my next credit. My only option is to eat some annual fee cost, get the credit and then downgrade for a prorated refund. Is it worth chasing the back door triple dip though?
Breaking Down The Numbers
To make things easy let's assume it takes me until January 30th to get my ducks in a row. That is two months from when the annual fee posted on my Business Platinum card. The card comes with a $695 annual fee that I need to deal with. My best option would be to downgrade to the Business Green card which has an annual fee of $95.
Here are what the numbers look like for the downgrade cost:
- $695 Business Platinum annual fee / 12 months = $57.92 per month
- 2 months of carrying the Business Platinum = $115.84 ($57.92 x 2)
- $95 Green Business annual fee / 12 months = $7.92
- 10 months remaining for the Business Green card = $79.20
- Total Cost = $195.04
There are beliefs that I could close the Business Green card after the prorated annual fee posts and get the refund since it would be “within 30 days since the annual fee posted.” I have never tried this myself so I am going to just plan on it costing the amount above. It is worth a try though if you don't plan on using the Green Business card.
Here Is What I Would Get For The Cost:
So I would need to pay almost $200 to carry the card a few months, but what would I get for that cost?
- $10 wireless credit for January (only one since I used the December one already)
- $200 Dell credit in January
- $200 airline incidental credit in January
That is $410 for under $200 out of pocket, seems like a no brainer. I actually think it is closer to a wash because I am so tired of the Dell credit and running out of creative things to do there. Because of that I only really value the airline incidental credit and wireless credit. Looking at it that way makes the spread a lot thinner and probably not worth the hassle if you are in the same boat.
Back Door Triple Dip: ToP Thoughts
The back door triple dip is not as good as the traditional triple dip because you have to eat some credit card annual fees. That eats away at some of the value you get from the triple dip. Whether or not it is worth it will depend on how you value those credits you get with the calendar reset.
On their face, it is a good value play. A lot will depend on how useful that Dell credit is for you if we are talking about the Business Platinum card. If you don't have many Business Platinum cards already, then it is probably more valuable to you. For my situation on the other hand, I already have more Dell credit than I want. Grabbing additional cap space that costs me some out of pocket money just isn't worth it in my situation. It may be for you though, and that is what you need to decide. The numbers also look a lot better if the Green Business closure actually would recoup that annual fee cost too. It may be worth the gamble for some.
If you only have a card or two, it is worth reaching out for a retention offer too. While you would have to keep the card for another year, the points will sometimes make it worth it.
Let me know if you have ever done the back door triple dip over in the ToP Facebook Group.