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If You Have 29 Credit Cards, You're Probably a Millennial; As issuers use rewards points to battle for business, some young adults are signing up for every offer and finding creative ways to rack up charges; 16 cards and no income


Rob Copeland | Friday, March 31, 2017

The Wall Street Journal

When Kyle Allen gets home from work each day, he heads straight for his mailbox. "It does give me a rush," says the 29-year-old financial analyst from Orlando.

What he hopes to find is yet another offer for a new credit card. He and his wife together have 40 of them and have earned, so far, 1,492,500 rewards points. They have used the points in an almost-completed quest to visit each destination named in the chorus of the Beach Boys song "Kokomo."

"I keep waiting for them to decline me," says Mr. Allen of the card companies. "It just doesn't happen."

Forget comic books or vintage lunchboxes. Credit cards, and the prizes they earn, are the hot new collectibles for millennials. Fanatics sign up for new cards in every city they visit. They get multiple versions of the same card. (That's often allowed.) They angle to use their cards to cover tabs at restaurants.

Driving their obsession is an arms race among credit-card companies to offer the best rewards. The trend has spawned blogs and message boards where card holders trade tips and brag about their conquests.

J.P. Morgan Chase & Co.'s Chase Sapphire Reserve card until recently offered a sign-up sweetener of 100,000 rewards points, potentially worth thousands of dollars when redeemed for travel, as many collectors have done. The card, launched last August, proved so popular that 10 days later the bank ran out of the metal required to make them.

Citigroup Inc., American Express Co. and other rivals have enhanced their own cards to compete.

"I'm kind of a credit-card—maybe junkie is not the right word—but I'm a credit-card enthusiast," says Mary Xu, a San Francisco cybersecurity manager. In pursuit of points, she spends more than $1,000 a year on annual fees for high-end cards.

She was so disappointed to be rejected for the Sapphire Reserve last October that she spent hours constructing a costume of the card out of cardboard. She sent the bank a photo of herself dressed up, hoping for a second chance.

She was approved about three months later.

"They got the sweet end of the deal over all," she says. "I went to a Halloween party wearing it, and I'm positive they got at least a dozen referrals from me."

Rewards fanatics are one reason new credit-card sign-ups in the third quarter of last year were 14% higher than in the year-earlier period, according to the most recent data from credit-reporting firm TransUnion Corp. Credit-card balances in the fourth quarter rose sharply among those under age 40, the firm says.

Many issuers don't limit the number of cards an individual can acquire. Payment history and overall debts usually are weighed more heavily than numbers of cards in application decisions. TransUnion Vice President Heather Battison says heavy card collectors who miss a payment date could see their credit scores fall disproportionately compared with casual users.

Some cardholders move on to a fresh card as soon as they charge enough to earn their sign-up bonus on one.

Washington, D.C., communications director Daniel Seaton, 31, signed up for a new card not available at home when he was on business in New York in February. It was his 29th new card in the past 18 months. "I've definitely kind of scolded friends for using a debit card," he says.

Ike Lee, 25, a student at Yale School of Medicine, has 16 cards and no income. When friends told him they needed furniture for a new apartment, he hatched a plan to pay for it himself with a card that offers 5% cash back on furniture purchases. He intends to give them a 3% discount when they reimburse him, netting himself a bit of cash.

When Levi Broderick, 32, and a friend recently moved to split the bill at a restaurant, both slapped down the same rewards-heavy card. "He didn't say anything to me and I didn't say anything to him, but you could tell by the milling glances that we knew something was going on," says Mr. Broderick, a Seattle software engineer.

Benjamin Gowdy of Gorham, Maine, a 34-year-old real-estate investor, pitched his girlfriend on a four-hour road trip to nab a Chase sign-up bonus that required an in-person application. "I don't really feel like blowing up a whole Saturday to sit in a bank," he recalls her responding.

He eventually prevailed, and he and his girlfriend, Anna Gardner, set off at dawn in early March in his decade-old Toyota Prius for the nearest Chase branch—in Connecticut. They arrived to find a charged-up mob of other applicants from across New England.

"The crowd made Anna feel like I was a little less insane," Mr. Gowdy says. Ms. Gardner, 32, signed up for a card, too. "I ate a little crow there," she says.

A J.P. Morgan Chase spokeswoman marvels at the motivation of applicants. "They're crazy!" she says.

Over the past year, Chase has signed up tens of thousands of new credit-card customers, with more than half of the high-priced Sapphire Reserve cards going to millennials, the spokeswoman says.

San Antonio engineer Marshall Sharp, 31, uses an Excel spreadsheet to track the due dates for the 24 credit cards he has acquired in the past 11 months.

Because he doesn't spend enough to qualify for all the rewards, he heads to a local mall and uses his credit cards to buy cash-equivalent prepaid cards, earning points in the process. Then he uses the prepaid cards to pay off his credit-card balances. He recently had to wait a long time to check out because someone ahead of him in line was doing the same, he says.

"The same sort of loop is used for money laundering," Mr. Sharp says. "Some of my co-workers joke that if the FBI comes, we'll know where to point them."

The practice is legal, though discouraged by card companies.

Donovan Frost, 25, a Los Angeles software account manager, broke out his card at a New Year's celebration this year to cover a $300 group bar tab so he could collect a hefty credit-card bonus tied to restaurant spending. Some of his friends reimbursed him with cash.

"Cash?" he recalls thinking. "What am I going to do with that?"

This article was licensed through Dow Jones Direct.

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