Banks Canceling All App-O-Rama Player's Credit Cards?

Are credit card companies cracking down on “app-o-rama” (AOR) gamers, those folks who do a slew of credit card applications at the same time for to get as many bonus offers, credit lines, and 0% balance transfers as they can? After some of these FatWallet forum members did an AOR, all their credit cards were closed with one bank. For one guy, stook2001, this meant five new Citicard credit card accounts as well as three already existing Citicard accounts in good standing. The only reason given for the closing was the number of inquiries on his credit report. AOR thrived when credit card companies were throwing all sorts of enticing promotional offers in a desperate drive to get more customers. Now that credit card defaults are rising and credit card companies are trying to get rid of customers that might end up as liabilities, AOR could be just as on its way out as a no-doc stated income interest-only option-ARM mortgage.

Severe Adverse Action from Citibank [Fat Wallet]
RELATED: How to Cash In On 0% Offers For Credit Cards [WSJ]
(Photo: mod*betty)

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  1. SkokieGuy says:

    I too play the promotional offer game and have an Amex Optima with one year on purchases at 0% interest, (set to expire this June).

    In the midst of this current crackdown, last week I received a Discover card solicitation, 0% interest on balance transfers – till 20012!

  2. B says:

    To be fair, an App-O-Rama would be exactly what an identity thief would try after stealing somebody’s identity.

  3. gorckat says:

    Banks really have no way of telling if a consumer is going after the promos or hit hard times (gambling debt, divorce, lost job- w/e). I don’t necessarily fault them here.

    That said, a more diplomatic solution would be to distribute the existing credit on all the accounts (if possible, since some cards have required minimum limits, like 10k for platinum cards, iirc), if a person really wants all the cards.

  4. Milstar says:

    @B: agreed plus rapid aquaisition of debt ( since many of these people turn and invest this money in safe invests and earn interest on 0% shows a high risk of leverage.

  5. Mr. Gunn says:

    Anytime a FW member has some adverse action, they post a thread about how it’s some industry wide crackdown. Wait until you see how the thread develops, and how the experienced and prudent members such as DaveHanson and SiS react, before believing the hype.

    They’ve been advising for over year now to be more cautious with the AORs than in previous years when people would apply for 50+ cards in one go. If you read around, most people are structuring theirs to have no more than 2 cards with a given issuer, though there’s actually specific anecdotal evidence on how many you can have with various individual lenders.

    /TMYK

  6. zentex says:

    @SkokieGuy: 20012? that’s awesome! you’ll be long dead before you start accruing interest!!

  7. ViperBorg says:

    @zentex: You beat me to it!

  8. econobiker says:

    Alot of card companies want you to have multiple cards because you run the risk of a higher percentage of late fees, over credit limits, etc.

    I had two Citibank cards one from Citi and one from a bank Citi bought. Citi would absolutely not let me roll the balance into one card- even with a lower credit limit than the two combined.

    System problems, yeah right…

    That said, the App-O-Rama site cracked me up. I knew people did the professional 0% card balance investing but that site takes the cake!

  9. xmarkd400x says:

    “System problems, yeah right…”

    To be fair, often times in mergers two databases will be incompatible, often for years after the merger.

  10. mike says:

    I have to play dumb here. What exactly is “App-O-Rama”?

    Is this a made-up term or is it something real?

    Kinda sounds like a TV Dinner…

  11. BigElectricCat says:

    An App-O-Rama is when you apply for MANY credit cards (some people have done 20-30 or more) within a matter of hours. This has to be done online with CC providers that offer the possibility of instant approval. There are two reasons to do this.

    1) By applying over a period of hours instead of days or weeks, any hard pulls on your credit reports (which will lower your credit scores) won’t be reported until long after the app-o-rama is over. Consequence: your credit rating doesn’t drop (and it WILL drop) until long after you’re done with the applications. That increases the possibility that you will get approved for lots of the cards for which you are applying.

    2) By applying for cards that offer 0% introductory rates (especially for balance transfers), app-o-rama practicioners can perform rate arbitrage and actually realize profit. You can find out how this is done under “stoozing” on Wikipedia.

    [en.wikipedia.org]

  12. These people are stupid.

  13. hejustlaughs says:

    @loquaciousmusic: Different strokes for different folks.

    I’m a 20 year old colleges student and have done a AOR in the past. For someone that has part-time income of $8k/year the AOR game helped me make decent side cash and obtain other bonuses.

    I managed to obtain roughly 60k at 0% and stashed this in an account earning 5.05% interest (remember those days?). I profited roughly $3k in interest. There are more aggressive individuals that can obtains tons more credit and profit a lot more.

    I also went after a bunch of bonuses, $250 cash from Chase freedom, 25,000 miles for AA, another 25,000 on United, etc. etc.

    To top it off after my AOR was over I credit score shot through the roof and will probably continue to slowly edge up over time.

    Here at the consumerist we pride ourselves on being smart consumers. If you can smartly “consume” the power of leverage it’ll generally work in your favor… AORs included.

    The problem is some people don’t plan out their AORs right. Citibank has a 2 card application limit within a 60 day window. This guy attempted to skirt that limit by applying for 2 regular Citi cards and then 2 co-branded citi cards.

    Also utilization % plays a key role. I kept my utilzation percentage between 50-70% accross all issuers. Utilizing all your available credit on all cards looks extremely risky in an analyst’s eyes.

  14. hejustlaughs says:

    reading through my above comment I realize there are numerous typos but I’m sure you’ll forgive me as it is 4:30 am. The consumerist contributes to my insomnia ;).

  15. BigElectricCat says:

    @hejustlaughs:

    If you don’t mind me asking, what were your credit scores before the AOR, after the AOR and then again after all the hard pulls dropped off?

    The interest income is a nice reward, to be sure, but certainly your scores got a nice healthy bump after Experian, Equifax and TransUnion got done digesting everything, right?

  16. hejustlaughs says:

    @BigElectricCat:

    I don’t know what my scores were BEFORE the AOR because I didn’t have a subscription to myfico.com. However, they did have a sale and I signed up for a 12 month subscription after my AOR.

    My reported score was 670… after 6 months (when inquiries are not suppose to matter as much) my score bumped to 690 which leads me to believe inquiries don’t hold much weight anyway. aobut 2 months after I paid off all the balances my score bumped up to 720.

    The nice outcome is that I before my AOR my highest credit limit on 1 card was $1,000. I now have 2 cards with $12,000 limit on each, one at chase and one at citi.

    One of the “high” limits was due to the fact that instead of closing the cards, i called and asked they be consolidated. I guess Citi does soft inquiries into my credit report because month after month they were upping my credit limit and it matched the limit of my card at chase.

    People might ask why a 20 year old might need a card or two with a $12k limit but it did come in handy when tuition is due and I could charge the whole amount to my card. Now my school charges 2.3% CC procesing fee so those days are gone.

    I may or may not do another AOR in the future but my goal of building a nice credit profile has already been attained.

  17. BigElectricCat says:

    @hejustlaughs:

    Schweet! You goosed your credit scores *and* managed to pick up two cards with respectable limits.

    Good on ya!