Credit Card Velocity

Credit card velocity is a term mentioned daily in the ToP Facebook group. You may remember from high school physics that “velocity” is the speed of something in a given direction. But how does that work when it comes to credit card applications and how does it affect your card choices and timing?

What Is Credit Card Velocity?

Velocity is the rate at which you are applying for and opening new credit cards. This is not to be confused with credit card application rules, which we cover extensively as well. The two work together to determine what cards you should be getting and how fast should be getting them.

Why Velocity Is Important

Simply put, this hobby is a marathon and not a sprint. You want to keep traveling on points for a long time and earning many points over the years and decades to come. At the right pace, you won't ever run out of ways to earn meaningful points. If you follow some these simple guidelines, you can have long-term success.

Going too fast can scare banks or make you look like a bust out risk for those banks. This type of behavior can lead to denials or, even worse, total account closures. Go at a marathon pace and avoid falling into the fear of missing out (FOMO). There will always be good offers available to you if you follow simple rules and ask questions when in doubt.

Examples Of Credit Card Velocity

With business cards from the most popular bank for beginners, we often recommend waiting between 60 and 90 days from your last application. Sure, the actual application rules may allow for a new card every 30 days, but if you are trying to get a new credit card from that same bank every month, does this seem like a normal thing?

These are the types of questions we need to ask ourselves. How does this look to a bank? Eventually things like this may lead to declined applications and you needing to take an even longer break. Lets not forget there are lots of banks out there with plenty of options. And many of these business cards will not affect your 5/24 status.

Tips For A Safe Credit Card Velocity

Alternating between banks can help your velocity with one bank. For example, let's say you open a card with one bank in April and another bank in May. If you are ready for a new card again in June, you could be good to go with that first bank, since it will have been about two months since your last application with them.

Also, remember that not all business credit cards report to your personal credit. Which means that if you open a business card with one bank, other banks will never know about that card unless it is reported to your personal credit. We have a guide that can help you understand whether a business card reports to your personal credit. Understanding this can help with the above tip about alternating banks. If you alternate between two banks, while also opening business cards that don't report to your credit, then those banks may think that you just sat tight for a couple of months without even opening a new card.

Meanwhile, we can also focus our spending in other areas, while not working on the minimum spend for a new welcome offer. Plenty of cards offer incentives to spend a certain amount every year even without a welcome offer. The biggest opportunity here is with hotel credit cards that offer free night certificates if you spend a certain amount each year. Some airline credit cards can reward your spend by inching you closer to elite status with the airline.

Lastly, don't be afraid to ask before making a move. That is one of the great benefits of the the Travel on Point(s) community in our Facebook group, where you can always ask and run ideas with our expert team and over 100,000 members. Even experts ask questions and bounce ideas around when working through things.

We Are Not The Same

One person's spending is not like another's. Some have high spending households with large families. Some may have a higher spending business while yours may be smaller. Once again, don't fall for FOMO and go too fast. Those with high spend can focus on business card offers that reward that like the Capital One Venture X Business card or an American Express Business Platinum card.

Some may think there aren't any business cards with lower minimum spend requirements out there, but that is a myth. There are plenty of options around such as the American Express Blue Business Plus, which is also a good keeper card.

Credit Card Velocity: ToP Thoughts

There is no doubt that we all want to keep traveling on points for many years into the future. Going into award travel with a plan, and knowledge of the rules and foundations, will help you greatly. Understanding credit card application rules is crucial, but being aware of your velocity is just as important.

Have questions or thoughts? Come over to the ToP Facebook Group and let us know.