The term “app-o-rama” is a familiar one to miles and points junkies. In short, app-o-ramas involve applying for multiple credit products (usually credit cards) as close to each other as possible, ideally within a few hours or even a few minutes. App-o-ramas appear to have originated with our compatriots over at FatWallet, who started experimenting with the concept a decade ago to arbitrage low-interest loans. Today most people consider app-o-ramas a major component of a miles and points strategy.
But is it still the right strategy?
To answer this question, we have to examine the rationale for app-o-ramas in the first place. There’s a number of reasons a person might want to apply for multiple credit lines at the same time, but we can boil it down to a few key arguments…
Conventional wisdom says credit inquiries don’t show up instantaneously on your credit report.
Much of the conventional wisdom holds that there’s a short delay after you apply for a credit line before the inquiry lands on your report. Therefore, by submitting all your applications at once, each bank cannot see that you are also applying for other cards at the same time.
That may have been true back in 2004. However, technology has improved a bit in the last 10 years. Is it reasonable to believe that in this day and age where I can send an e-mail and have it arrive in another inbox within 3-5 seconds (unless I’m using AOL, of course) that bank computers take days or even hours to report new credit applications to credit reporting agencies?
But there’s no need to speculate — a review of recent data points will show us the way. Going back to the far reaches of 2012 (ahhhh, remember Linsanity?) we can find FatWallet posts stating “it appears that issuers are generally informed of inquiries in real-time these days” and “inquiries ‘post’ immediately, so it doesn’t matter if he applies for the extra cards the same day or a few days later.” Similar data points can be found in posts on FlyerTalk. “I pulled a credit report 5 minutes after applying a card, and the inquiry is already there” and “all real time inquiries now.”
We can even see evidence of this just across the Boarding Area hallway where our good friend Greg at FrequentMiler did his Million Mile Madness challenge last year. When he called Chase’s reconsideration line in the middle of an app-o-rama, the analyst said “I see you are applying for a lot of cards today. You have six inquiries already.” Barclays even told him his 8 inquiries that day were a risk factor.
The banks can see your same day inquiries, folks.
Can you still “hide” your inquiries if you’re clicking “Submit” on multiple applications in multiple browsers at literally the same second? Perhaps. But given the differing speeds in which internet traffic reaches a destination and how quickly a simple bit of inquiry data can be reported, I wouldn’t count on it. If you get approved, it’s most likely in spite of your multiple same day inquiries, not because they couldn’t be seen.
Don’t app-o-ramas offer an advantage by sacrificing an immediate hit to your credit score in exchange for a normal (or even higher) score a few months later?
This strikes me as a six-of-one/half-a-dozen-of-the-other argument, the difference between ripping off the band aid versus the slow pull. Since your credit score is always a “moment in time” look at your credit profile, there’s no statistical difference between having your score make large moves up and down or small ones. There might be a slight advantage in having your most recent couple of inquiries a few extra months in the past, but it’s highly unlikely to be more than a 5-6 point total effect on your credit score. I think it’s fair to say there’s no huge improvement to your score (if any) by doing apps all at once instead of one at a time, and it’s probably reasonable to assume that not having 6 inquiries show up on your credit report in one day is better from a reconsideration agent viewpoint.
But doesn’t consolidating all your inquiries on the same day make them easier to track?
Sure, okay. But come on, guys. Make a spreadsheet.
Seriously, if you’re in this game, you should already be keeping track of your credit lines, how many cards you have from each bank, which reporting agency got hit with each inquiry, and so forth. That data should certainly include your application dates. Yes, it’s easier to remember that your last app-o-rama was February 26th and therefore you have 33 days until your next app-o-rama. But if you don’t do 6 apps at a time, you won’t have to wait 90 days every time you want a new credit card anyway. And that brings us to our conclusion…
The Devil’s Advocate says we’re losing more than we’re gaining with app-o-ramas.
When we break down the arguments for app-o-ramas, there don’t seem to be a lot of advantages other than convenience and perhaps a very slight bump on your credit score. But look at what we’re missing out on by doing our apps that way. When a limited-time bonus offer arrives – such as last year’s 1-week only Chase Ink increase to 60,000 bonus points or the 12-hour window last January for 100,000 bonus points on a new American Express Platinum – being on a fixed 90-day schedule makes it that much harder to get that card during the short window it’s available.
App-o-ramas also raise our spend requirements. Manufactured spending makes these more manageable nowadays, but with spending requirements ever increasing and more CVS-style loopholes closing every day, why kill ourselves to make a $25,000 spend in 3 months when we could do it over 6 months by simply applying for 1 card every 30 days? Plus how many mediocre credit cards are we adding to our app-o-rama just for the sake of making it a full “rama”? Would we really bother with that Best Western card if we weren’t just filling out our round of apps?
Without a doubt, app-o-ramas are entertaining. I admit that I enjoy the reaction from my friends when I tell them I was approved for 6 credit cards in one day, but that’s just bragging rights. When we look at the data, app-o-ramas may have made sense in 2004. But today, it’s possible their time has passed.
Last Week’s Recap – Redemption Valuations
Each week when it’s warranted, we’ll take a quick look back at some of the debate from the previous week’s Devil’s Advocate topic. We had a lot of great comments and back and forth regarding last Thursday’s discussion of redemption valuations (see “Yes, You DID Get 10 Cents Per Mile For Your Award Redemption“). But there were two comments in favor of the conventional wisdom that stood out to me as being worth a quick rebuttal.
One was the point Big Habitat made about first class seats being given away by airlines to elite customers and how that might affect valuation calculations. You can read my lengthy response in last week’s comments, but briefly, I’d argue those changes in price are a function of time versus supply, not redemption valuation. When you buy a ticket of any sort, you’re paying for the guarantee to that seat. An elite upgrade is never guaranteed, and as such it’s not worth the same as a first class ticket, no matter what currency you’re using.
The other was a comment a few days ago by R A Rosier about merchants who routinely advertise retail prices that never actually get charged for the items in question. That certainly does happen but it’s not necessarily the case in first class airline seats. On high-traffic routes such as LAX-JFK, it’s reasonable to believe those seats are being sold. If they weren’t, elite upgrades would be much easier to come by on those routes. And on lower-traffic routes, if the airlines aren’t selling enough seats they can lower the price and/or release more award space, which happens all the time. Many airlines are even trying to sell those first class seats at the gate right up until the last minute, which brings us back to the above discussion about time versus supply. Redemption valuations are calculated at the moment you pull the trigger on purchasing your ticket, so isn’t using the sale conditions in effect at that moment the fairest way to make those valuations?
If you’re interested in last week’s debate, you can go to last week’s comments and check it out for yourself. While you’re there, please feel free to add your thoughts as well, or join us below for comments on this week’s post. Devil’s Advocate debates are never completely settled!Devil’s Advocate is a weekly series that deliberately argues a contrarian view on travel and loyalty programs. Sometimes the Devil’s Advocate truly believes in the counterargument. Other times he takes the opposing position just to see if the original argument holds water. But his main objective is to engage in friendly debate with the miles and points community to determine if today’s conventional wisdom is valid. You can suggest future topics by sending an email to firstname.lastname@example.org.