how the banks want you to travel the world for free!
TRANSCRIPT
How the Banks Want You to Travel the World for Free!
Gary Leff – View From The Wing
Daraius Dubash - Million Mile Secrets
Thank You Chase!
Thank You Banks!
How many have rewards credit cards?
How many?
How many miles did you earn with them last year?
- Credit Cards
- Debit Cards
- Shopping
- Dining
- Banking/Investing
- Promotions
- Asking nicely!
- Partners
- Flying
Earning Miles & Points
Credit card sign-up bonuses are the
EASIEST way to earn hundreds of
thousands of points.
1 MILLION+ miles/points in
2011 from 16 credit cards!
1 MILLION+ miles/points in
2011 from 16 credit cards!
Million Mile Secrets Credit Score
Only 240,000 Miles to the Moon
Have a mortgage in the next 2 years
Do NOT Apply for Credit Cards If You…
Can Not pay your balance in FULL each month
Do NOT Apply for Credit Cards If You…
- How it works
- Sign-up for card and get sign-on bonus (25K to 100K)
- Usually have to spend a minimum amount, e.g $3,000 in 3 months
- Then what?
Earning Miles & Points – Credit Cards
What is the average household income in the US?
$50,000*
*2010 US Census
- Spend everything you earn, you’ll get only 50,000 miles/points
- Pay-off is with the sign-up bonus, NOT everyday spending
Earning Miles & Points – Credit Cards
- Churning is key!
- Get same card again (YMMV):
Earning Miles & Points – Credit Cards
How to Evaluate Credit Cards?
1) Big Sign-up Bonus
- E.g. 100,000 Point British Airways
- 50,000 Point Southwest
3 Reasons to Get a Credit Card
2) Most Rewarding for Actual Spending
- E.g. American Express Starwood earns 1.25 miles
- E.g United Club Card earns 1.5 miles
3 Reasons to Get a Credit Card
3) For The Benefits
-E.g. American Express Platinum
3 Reasons to Get a Credit Card
Spending on Cards with no/low NET cash outflow - Amazon Payments $1,000 per month free
Spending
Spending on Cards with no/low NET cash outflow - Vanilla Reloads & Bluebird
Spending
Spending on Cards with no/low NET cash outflow - William Paid for Rent - Charge Smart for loans Pre-Paid Cards - Wells Fargo - US Bank Visa Buxx
Spending
Will my credit score go down?
3 Credit Bureaus
FICO Score: 700+
Credit Score
- Will my score go down?
- 3 credit bureaus
- Credit score: credit history, types of credit, payment, utilization, inquiries
- 2 to 5 points decrease per application
- But available credit increase, so credit score may increase
- Monitor your credit score (Credit Karma/Sesame)
- Do what you’re comfortable with
Earning Miles & Points – Credit Score
Free Credit Score
App-O-Rama (Example)
Every 3 to 4+ Months
- Different Credit Bureaus
- Business + Personal
- Plan for Minimum Spending
- Call reconsideration to get approved
- 3 to 4+ months
App-O-Rama Planning
- Don’t need an established business
- Selling stuff on ebay etc.
- Use SSN as Tax ID number
Business Cards
How Many Cards?
Do what you’re comfortable with
OR
- Not approved online
- Max out available credit or too many inquiries
- Call Reconsideration Department after applying
- Relationship, Credit Worthiness, Business Info
- Good reason for wanting card
- Show that you’re not a credit risk
- Hang Up and Call Again!
Reconsideration
- Retention
- Citi great at offering incentive to keep card
- I’m “thinking” of cancelling card - Annual Fee - Benefits
Earning Miles & Points – Retention
Best Deals (Sign-up Bonus):
- 2 Citi AAdvantage cards for 50,000 miles each
- Use 2-browser trick - 100,000 miles = Business Class to Europe/South America
Earning Miles & Points – Credit Cards
Best Deals (Sign-up Bonus):
- 2 Chase Southwest cards for 50,000 points each - 100,000 out of 110,000 points needed for Companion Pass -Chase United Explorer
- 55,000 miles after $1,000 within 3 months + $50 credit
Earning Miles & Points – Credit Cards
Best Deals (Sign-up Bonus & Spending):
-Chase Sapphire Preferred
- 40,000 sign-up bonus, 2X points on dining/travel, no forex fees, TRANSFERABLE to United, Hyatt, British Airways, Southwest etc.
-Chase Freedom
- 10,000 sign up bonus, but 5X points on certain categories (gas, groceries, etc.). Points transferable to hotels/airlines if you have Chase Sapphire Preferred.
- Chase Ink Bold
- AMEX Starwood Preferred
Earning Miles & Points – Credit Cards
1) Transferable Points
2) Airline/Hotel Cards
3) Cash Back
3 Types of Credit Cards
• Flexibility, flexibility, flexibility!
• Sharing points with family/friends
• Transfer partners = options
• Don’t forget about partners of partners
• Don’t put all of your eggs in one basket
The Case for Transferrable Points
1a) Chase Ultimate Rewards
Types of Credit Cards -Transferable
1:1 transfer partners with Continental, United, British Airways, Korean, Hyatt, Marriott, Priority Club and Amtrak
You can combine points with anyone else
No fees when transferring to airlines!
You can transfer to anyone else
Points post right after statement closes
No transfer bonuses (yet)
Chase Ultimate Rewards
Current offers:
Sapphire Preferred: 40,000 after $3,000 spend within 3 months. $95 annual fee waived the first year.
Ink Bold: 50,000 after $5,000 in 3 months. $95 annual fee waived the first year.
Chase Ultimate Rewards
1b) American Express Starwood (SPG)
Types of Credit Cards - Transferable
1c) American Express Membership Rewards
Types of Credit Cards - Transferable
• Earn 1 point per dollar spent (Premier Rewards is 3x on airfare and 2x on gas & groceries)
• Points go into pending status for a month after statement close (can be expedited)
Membership Rewards Basics
• Transfer to anyone!
• Link (not enroll!) their account to your account membershiprewards.com -> Points Summary -> Bottom right
• Advance points for free, just earn them back
• Up to 60,000 for Platinum
• 15,000 for most other cards (not corporate)
• Buy points at 2.5 cents each, up to 500,000 a year!
Flexibility
Recent bonus opportunities
Delta: 50% and 25,000 MQMs, 40%, 30%, 20%, 10%
British Airways: 50%, 40%
Virgin Atlantic: 15% El Al: 25% Iberia: 20% Aeromexico: 25% Starwood: 50%
Transfer Bonuses
Mercedes Benz Platinum- 50,000. $495 annual fee
Platinum- 25,000. $450 annual fee
Premier Rewards Gold- 25,000 Pts. $175 annual fee waived first year
Bumping bonuses debacle
Look out for targeted offers!
Current Sign-up Offers
Perks : - Free bags - Priority boarding - Less miles for redemptions
Types of Credit Cards – Airline
Best Deals (Sign-up Bonus):
- 2 Citi AAdvantage cards for 50,000 miles each
- Use 2-browser trick - 100,000 miles = Business Class to Europe/South America
Earning Miles & Points – Credit Cards
Could be worth paying fee for: - Free night certificates - Elite Status - Discounted award redemptions
Types of Credit Cards –Hotel
Types of Credit Cards – Cash Back
- 1 to 2% on purchases - ~5% on categories - Easy to understand - Good for coach travel - $5,000 business class ticket = $250,000 spending
- $80,000 spending on AMEX SPG = 100,000 AA Miles