Maximizing Credit Cards For Free Travel

Maximizing Credit Cards For Travel

Credit Card 101

The Art of the Sign-Up Bonus

Category and Spending Bonuses

Perks and Benefits

Creating Credit Card Spend

My Three Favorite Transferable Points Programs: Amex, Chase and Starwood

Different Kinds of Credit Cards

Transferable

Strengths: Flexibility, Diversification

Weaknesses: No airline/hotel-specific perks

Cobranded

Strengths: Perks, mileage and points bonuses

Weaknesses: Lack of flexibility, perks same as elite benefits

Fixed Value

Strengths: Reliability and Elite Miles

Weaknesses: Lack of aspirational/premium options

Understanding Your Credit Score

How is it calculated?35% payment history 30% amounts owed15% length of credit history10% new credit10% types of credit

 FICO vs. FAKO

Get your credit score for free at AnnualCreditReport.com

You Should Not Get Into the Credit Card Game If…

If you run huge balances, focus on paying them down and putting them on a 0% intro APR card like Chase Slate

Have poor credit

Cannot manage credit

Are taking a major loan in the next 6 months

Alternative - Debit Cards: SunTrust Delta, Bank of America Alaska, PerkStreet Financial Cashback

Business CreditTied to personal credit

Personal hard inquiry but once open, business credit line is on different credit report

Fewer consumer protections

Lucrative earning opportunities

Apply as sole proprietor with SSN

How Many Credit Cards Can You Get?

American Express: 4 personal credit cards, unlimited charge cards

Chase: No number limits – overall credit line limit

Citi: No published limit

Capital One: No published limit but stringent on applications

Can you get cards/bonuses over and over again?

Finding Top Sign-up BonusesThepointsguy.com – Top Deals PageOpen your mail! You might be surprisedThe forums/social media: FlyerTalk, MilePointFollow me on Twitter: @thepointsguy

Top Current Credit Card Offers

Chase Ink Bold and Ink Plus: 50,000 Ultimate Rewards when spend $5,000 in 6 months. $687-$7,000 in value.

Southwest Personal and Business: 50,000 Rapid Reward points when spend $2,000 in 3 months. Value: $3,000 for both.

Citi American Airlines Cards: 50,000 miles when spend $2,500 in 4 months on each – two cards at once. Value: $2,680 for both.

Chase British Airways Visa: 50,000 Avios for $1,000 in 3 months, 50,000 more when spend $20,000 in a year. Value: $1,600-$2,600.

American Express Mercedes-Benz Platinum: 50,000 Membership Rewards points for spending $1,000 in 3 months. Value: $1,250.

Credit Card ChurnsAKA the “app-o-rama”

Bundling applications 91 days apart

Factors to take into account:Bonus offer expirationValue of bonusTiming of spend threshold bonusesCategory spending bonusesPrioritizing spend bonuses by time of yearBy issuerDon’t take no for an answer – call reconsideration lines

Beyond Sign-Up Bonuses: Meeting Minimum Spend

Put every expense possible on your card – as long as you’re not paying fees

Charity donationsBuy Gift Cards

 

Advanced: Payment Services like ChargeSmart and WilliamPaid (generally 3%), Amazon Payments $1,000 per month to another person with no fee

Prepaid Cards: American Express Bluebird

What is it? Like a checking account and debit card combined

How do you fund it? Vanilla Reload Cards

Mint points at very low cost – 8/10s of a cent per point

Limitations

For more information: See our Bluebird series

Category Spending BonusesAirfare:

Hilton Reserve 5x, Premier Rewards Gold 3x, Chase Sapphire Preferred, Airline Co-Branded Cards

Gas: Citi Hilton Reserve 5x, Premier Rewards 2x, Chase Ink Bold 2x

Grocery: Hilton Amexes 6x, Premier Rewards 2x

Dining: Citi Forward 5x, Chase Sapphire Preferred 2x, Chase Hyatt Visa 2x

Spending Threshold BonusesIn addition to sign-up bonuses, many credit cards offer additional perks for hitting certain spend thresholds such as:

Bonus Points: American Express Premier Rewards

Airline Elite Miles: American Express Delta Reserve

Hotel Elite Status: Citi Hilton HHonors Reserve

Companion Tickets: Chase British Airways Visa

Annual Fees: When to Cancel a Card?

Keep cards open at least 6 months to avoid red flags

Transfer or use points before closing an account

To renew or not to renew? Do the math.Example: Chase Hyatt Visa gives you a free night at a Category 1-4 hotel each year – more than makes up for the $75 annual fee

What it means for your credit when you cancel?

Call and ask them to waive annual fee – it never hurts to ask!

Don’t cancel, downgrade so you can use as bargaining tool for future cards

Keep a couple no-fee cards around. Best: Chase Freedom

Transferrable Point Programs

American Express Membership Rewards

Pros:16 airline partners4 hotel partnersTransfer bonuses – Delta, British Airways, Virgin AmericaTransfers post instantaneously (mostly) Has added some partners like British Airways, Virgin America (bad ratio)

Cons:Losing transfer partners – Continental, Southwest, Airtran, Priority Club 6/100 cents per point for transfers to US airlinesEarning portal shut downPay With Points Dropping to 1 cent on all cards, except Business Platinum

American Express Membership Rewards

Star Alliance• Aeroplan 1:1• All Nippon Airways 1:1• Singapore Airlines 1:1

OneWorld• British Airways 1:1• Iberia 1:1• Asia Miles 1:1

Skyteam• Aeromexico 1:1• Alitalia Airlines 1:1• Delta 1:1• Air France/KLM 1:1

Other• El Al 50:1• Frontier 1:1• Hawaiian 1:1

Airline Transfer Partners

JetBlue 1.25:1Virgin America 2:1 Virgin Atlantic 1:1

OneWorld

• Positives: Instant transfers, transfer bonuses, some great values from distance-based awards, no last-minute booking fees

• Negatives: High fuel surcharges, segment pricing on awards, hard to search for some awards

• Good awards: Expensive short- and mid-haul flights. Ex: New York to Toronto

British Airways

American Express Membership Rewards

• Best Western 1:1• Choice Privileges

1:1• Hilton HHonors

1:1.5• Jumeirah Hotels and Resorts

23:1• Starwood

3:1

Hotel Transfer Partners

Tip: Transfer points to Virgin Atlantic at 1:1 and then Virgin Atlantic to Hilton at 2:1- better than the standard direct transfer ratio of 1: 1.5

American Express Membership Rewards

Earn 1 point per dollar spent (Premier Rewards is 3x on airfare and 2x on gas & groceries, 4x per dollar with Amex Travel)

Points go into pending status for a month after statement close (can be expedited)

Cannot combine Membership Rewards points

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!

American Express Membership Rewards

Pay With Points

Easy, but fixed value: 1 cent (1.25 for Business Platinum)

- A $5,000 business class ticket would require 500,000 points!- Could be an okay decision for cheap domestic tickets

Earns elite status just like a purchased ticket

Chase Ultimate RewardsPros:

Adding partnersMost transfers instantaneousNo transfer feesTransfer points to anyone else, combine points with anyone elsePoints post right after statement closesGood customer service

Cons:Limited number of partnersNo transfer bonuses yet

Chase Ultimate Rewards Transfer Partners

• British Airways 1:1• Korean Air

1:1• Southwest

1:1• United 1:1

Airline

• Hyatt1:1

• Priority Club1:1

• Marriott 1:1• The Ritz Carlton 1:1

Hotel

• Amtrak 1:1Other

Chase Ultimate Rewards

• Positives: Low points requirements for free nights, great elite perks

• Negatives: Just over 400 properties worldwide

• Good awards: Top-tier redemptions for 22,000 points like Park Hyatt Paris Vendome, only 6,000 points to upgrade paid stays for up to 4 nights

Hyatt

Chase Ultimate RewardsPay With Points:

1.25 cents per point in travel (Sapphire Preferred & Ink Bold), 1 cent for Freedom

Transfer to anyone: ultimaterewards.com -> Manage Ultimate Rewards -> Combine Points -> Transfer To Other -> Enter credit card number and last name

Chase Experiences

Starwood Preferred GuestPros:

Over 1,100 propertiesCash & Points Reward stays count toward elite status30 airline partners5,000 point bonus on transfers of 20,000 points

Cons:Member can only transfer to own accountsNo other transfer bonusesPosting times vary greatlyNo shopping portal

Starwood Preferred Guest

Airline Transfer PartnersAeroplan

1:1Air Berlin

1:1Air China

1:1Air New Zealand

65:1Alaska Airlines

1:1Alitalia 1:1

ANA 1:1

American Airlines 1:1

Asia Miles 1:1

Asiana Airlines 1:1

British Airways 1:1

China Eastern 1:1

China Southern 1:1

Delta 1:1

Emirates 1:1

Etihad Airways 1:1

Flying Blue 1:1

Hawaiian 1:1

Japan Airlines 1:1

King Club 1:1

Other

Amtrak 1:1

Starwood Preferred GuestAirline Transfer Time In Days

Delta 1Aeroplan 3Air Berlin 4ANA 4Virgin Atlantic 6American Airlines 8US Airways 8Alaska Airlines 8British Airways 9LAN 9United 11Asia Miles 15Asiana N/AFlying Blue N/A

Starwood Preferred Guest

• Positives: Low fees, one-way awards, free stopovers in your destination

• Negatives: Ticketing fees, no international stopovers

• Good awards: 40,000 Off Peak awards to Europe October 15-April 15; Cathay Pacific First Class North America-Asia for 67,500

• Alaska: 115,000 SPG Points = Cathay Pacific First roundtrip to Asia for 140,000 miles roundtrip. Other partners: Icelandair, Emirates

American

What’s In My Wallet

The TakeawayYour credit score is an asset. It is critical and you can leverage it to earn hundreds of thousands of points and miles a year

Think long-term: It’s not just about sign-up miles and points – perks, status, bonuses

Hop on deals when they come – they don’t last long

Don’t bite off more than you can chew

Always set auto-payments – make sure you don’t miss a payment

Strategize Your Spend