Oops, I Did It Again. Another Credit Card

In a moment of je ne sais quoi, I decided to apply for the Amazon Prime Rewards Visa Card. It's a card that I should have had long ago. What held me back was the Chase Bank 5/24 rule. This rule restricts new credit cards for people who have opened more than 5 new credit card accounts in the past 24 months. I'm guilty as charged. But, I discovered that the Amazon Prime card does not have the same restriction.

Sure enough, my application was approved. I got a credit line of $2300, which is adequate for the amount of spending I do at Amazon. I already have the Amazon Store Card, which is just a line of credit with similar features. The main difference is that the credit card is an actual, physical credit card I can use for purchases elsewhere.

The rewards can be used to make purchases at Amazon. Besides the 5% "cash back" rewards, the card is a Visa Signature card, which comes with some travel perks. The card technically has no annual fee. However, to get the 5% I need to be an Amazon Prime member, which does have an annual fee. If I am not a Prime member, then the card only rewards 3% on Amazon purchases.

I should be a little bit annoyed with myself for opening another card while I'm in the midst of earning the sign up bonus for my other recent card, the Hilton Honors Aspire Card. Thus far, I am a little over halfway past the spending requirement for the Aspire.

Fortunately, the Amazon Prime Rewards Visa does not have a spending requirement. I automatically got a $100 Amazon gift card for signing up. Otherwise, I would have waited until after getting the Aspire card sign up bonus of 150,000 Hilton Honors points. That reward will get me close to 400,000 Hilton Honors points. This will be handy for our future trip to the UK.

While doing all this, I started trying to figure out how to consolidate my credit card balances. One of the unfortunate side-effects of my credit card accumulating rampage is that I have balances all over. And, I have not been too careful about staying on budget.

I went to my dormant Personal Capital account to update the account synchronizations. This would give me a cash flow report. And, it also gives me a chart showing my debt levels over time. I did have a spike earlier this year as I transferred about $9000 from an amortized account to my credit cards. According to the report, I was doing OK until about 2 months ago. My debt levels have been creeping up. I had a sense. But, I did not have the data.

I've been thinking about how to use Velocity Banking to bring my accounts under control. The problem is that only Discover cards have the option to liquidate some of my available credit to do balance transfers. But, I have some balance transfers at 0% interest parked there at the moment.

The best thing I could think of doing is to run up my balance on the Aspire card to about 66% available credit. While I'm doing that, aggressively pay down the other cards with small balances. Then, when those are paid off, I can focus my attention back to pay down the Aspire.

I could do this in cycles. Once the Aspire is paid down, I could let it run up a balance again and aggressively pay down the 0% interest cards. Then, when I reach 66% on the Aspire card, focus on bringing that down again. Rinse. Repeat.

It's not exactly the way Velocity Banking is described. The point is that I would be directing my cash flow to pay off large chunks of accounts without having to do balance transfers. This only works now, I would not be able to do it otherwise, because I have the one card with a $10,000 credit limit. That gives me about 4 paychecks, about 2 months, of runway to pay off other accounts. Then, I'd have to spend the next 4 pay periods paying down the Aspire again. If I had a smaller credit limit, I would not have enough time to make a dent on other cards.

I already have cards zeroed out. Each card with a zero balance frees up cash flow that can be directed to my debt reduction efforts. So, that's the idea. Eventually, I'll only have the one credit card in which all my spending goes.

Which I've been thinking about lately. When I am done, I might very well set aside the points and miles game to focus on one card. I think when that day comes, it will be the American Express Green card that will be my daily driver. But, there's plenty of time to figure that out.

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