Everything You Need to Know about Using Credit Card Bonuses for Free Travel

The following guest post is by Craig Ford. Craig blogs at Help Me Travel Cheap where he helps newbies turn credit card sign-up bonuses into free travel.

To entice you to sign up for a credit card most credit card companies offer a sign-up bonus.

The sign-up bonus is the life blood for a growing population of American travelers. They scour the web looking for the best credit cards with sign up bonuses. They get the cards, get the bonuses, and turn a single credit card application into a vacation that most of us only dream of taking.

The objective is simple: try to collect and redeem many frequent flyer miles so you'll never have to pay for a vacation again.

Today you'll learn how to strategically get started using credit card sign up bonuses to accumulate free travel.

Why are people hesitant to use credit card sign-up bonuses to accumulate miles?
People who collect frequent flyer points and miles sometimes have a hard time understanding why everyone doesn't use this strategy for getting free flights. There are five common reasons why people avoid credit cards with cash back offers sign up bonuses in an effort to earn travel miles.

  1. It sounds too good to be true. I'm afraid of getting scammed. Surely there must be a catch that I simply don't understand. My response: Credit card companies play the averages. The average customer who signs up for one of their credit cards will likely keep it and pay the annual fees for a long time, pay a late fee, transfer a balance, or carry a balance. That's why they offer these huge sign-up bonuses; they want you to become a customer for life. Just because they come out ahead most of the time doesn't mean a person can't tactically apply for cards to benefit from the sign-up offers.  It's not a scam, but you do need to be disciplined and organized to come out ahead.
  2. It will hurt my credit score. My response: Without a doubt, it will affect your credit score. If someone is going to make a large purchase and plans to borrow money in the next couple of years, they might want to avoid signing up for credit cards just for the bonus. For most of us, however, the credit score impact will be incremental and won't have a significant effect on our ability to borrow money. Think of it this way: You attend a school that uses a grading system that gives an A for a 91 and above, so a student with a 99 gets an A and a student with a 91 does, too. Interest rates are based on “ranges”.  A score above 700 might yield one interest rate and a score below 700 another. If you have a 750 credit score, then those few point drops won't even bring you close to dropping below the 700 mark. You can still have a strong credit score and use credit cards to get free travel. Also read how to get your free credit report and take care of your credit score.
  3. There are too many rules and restrictions that make the points or miles hard to use. My response: This is partially true. Most airlines only allow a certain number of seats to be booked with reward points. As a result, you need to book mileage flights differently than cash flights: You'll need to be flexible, and you'll need to book months in advance — sometimes as early as 10-11 months, depending on how competitive the destination is.  You'll need to be educated about fuel surcharges imposed by certain airlines and member airlines partnerships. You'll even need to learn a little bit about each program to know where you should be focusing your time. I'll show you how to do that later in the article.
  4. The temptation to have a credit card is too much, and I always overspend. My response: Thanks for being self-aware. Nothing I say in this post could or should make you change your mind. Avoid this strategy. You're a wise person if you recognize how dangerous credit cards can be when you aren't able to set some reasonable limitations.
  5. It's not worth the time. My response: That may be true. It takes a small investment of time to track, apply, monitor, and cancel your credit cards. If you don't have the time to apply for a credit card with a $600 sign-up value, then you probably don't have time to read this post either.

In my case, I'd gladly trade a few hours a month for several thousand dollars worth of (free or very cheap) travel a year.

So does it really work? My trip report

Here's a quick roundup of how I used some of my miles and points in the last year to save money on travel:

  1. In May 2011, our family of five spent eight days in Auckland and Rotorura, New Zealand. We didn't have to pay for airfare as it was part of a regularly scheduled furlough back to the USA. However, we used Thank You Rewards points to get our first four nights free — a $475 value. Beyond that, we paid another $500 for hotels and rented a car for $250. Those expenses were reimbursed because we had Venture Rewards points from the 100,000 mile-match offer. Total 8 day cost for our family of five (including all accommodations, vehicle rental, meals and activities) was $325.
  2. In July 2011, I booked two tickets from Phuket, Thailand to Toronto, Canada. We purchased three tickets with cash and used points for two of the flights. The tickets cost 70,000 miles, and we paid $125 each in taxes and fees.  That saves us more than $2,000 worth of airfare.
  3. In August 2011, I flew from Houston to St. Sault Marie. It was a last-minute flight that I was trying to buy five days in advance. The best fare I could find on Delta (the only airline that services the airport) was $900. Instead, I chose to use 25,000 Delta miles and pay $10 for the trip.

In my opinion, the results speak for themselves.

How to get started collecting your miles and jetting around the world
Yes, you do need to be willing to do a little research. Yes, you do need a little background knowledge. But within an hour or two, you should be ready to start mastering the art of nearly free travel. There are a ton of free resources that will help you to get started. If you prefer, there are also some paid options available to individuals.

To help you get started, here are a few resources:

  • Travel Hacking Cartel. Chris Guillebeau has a membership-based program where he notifies participants of the latest deals and offers associated to miles and points. Plans start at $27 per month. It may be worth it, depending on your time availability and temperament. Personally, I've developed my own DIY Travel Hacking Cartel.
  • Online forums. Flyer Talk is one of the largest forums that discusses all things related to frequent flyer programs, activities, and promotions. It is an ocean of information, so you may feel overwhelmed if you've never been to the site before. Another valuable forum is Mile Point.
  • Travel points and miles blogs. There are a lot of blogs in this niche, but I'll introduce you to some of the blogs that I think will really help you get started. As you start reading these blogs, you'll be able to find others and quickly develop your list of favorites:
  • Help Me Travel Cheap (my travel blog). Help Me Travel Cheap focuses on helping people find and identify the best credit card sign up bonuses. This site is ideal for newbies who want to get the most return for the smallest time investment.
  • The Points Guy. This is one of the most comprehensive miles and points blogs on the web. In an easy-to-understand way, Brian reports the deals that will help you earn extra miles. He often has educational posts that help you understand different airline award redemption policies.
  • Frugal Travel Guy. This blog focuses on credit card rewards and highlights Rick's credit card churning strategies.  Rick has been a long time credit card churner and provides valuable insight.
  • Million Mile Secrets. Million Mile Secrets is an easy-to-understand blog that posts frequent step-by-step instructions on how to execute or capitalize on certain offers. It's another great site for people who are just getting started.
  • View from the Wing and the other Boarding Area Blogs. This blog network may not be ideal as you get started, but as you start reading more travel related articles, you'll want to subscribe to the Boarding Area family of blogs.  These blogs provide detailed analyses of program benefits.

Final addiction warning: I've had a lot of friends that I've convinced to start collecting miles and points, and they love it. If you're going to using this strategy to get free travel, you'd better be prepared for a new obsession: It's a fun and profitable hobby. You may want to start packing your bags because you'll be surprised at how quickly your points will add up.

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Mom of five
Mom of five
8 years ago

We’re not much for travelling, but we are definitely addicted to CC points. Points accrue rapidly if you put your recurring bills on the cc and do the bulk of your shopping online. Our goal this year was to do Christmas entirely on CC points – we fell a little short, but mostly because we used the points to buy items off bridal registries and athletic shoes for the boys’ sports.

My University Money
My University Money
8 years ago

This is my favourite post I have ever read on this site! PF blogs in general like to tout the advantages of credit card rewards, but this is by far the most comprehensive set of resources I have ever seen in one place. The only downside is, that as a young person looking to make some large purchases in the next couple years I am at the mercy of credit checks, but I am definitely going to keep this article stashed away!

SB @ One Cent At A Time
SB @ One Cent At A Time
8 years ago

Yeah, and once you have your mortgage applied and secured, you can apply and cancel cards for points and miles.

Jimmy
Jimmy
8 years ago

…OR…use the Chase Freedom card to save between 1 and 5% on every single one of your purchases and recurring bills and not drive yourself insane trying to circumvent all of the burdensome terms and conditions of various frequent flyer programs.

Travel is, by far, my favorite hobby, but between the constant devaluation of points, blackouts, etc etc, I much prefer to simply click one button every month and receive a sizable credit card statement credit. To each, his own I suppose.

Dan
Dan
8 years ago
Reply to  Jimmy

If all you want to do is domestic coach flights, then you’re doing the absolute right thing. But, if you’ve ever wanted to go overseas and dread the thought of going in coach, then you’re probably leaving money on the table.

Steve
Steve
8 years ago
Reply to  Dan

“dread the thought of going in coach”: That’s the rub isn’t it. All the claims about how you can get multiple cents per mile assume that your other option was paying the list price for business class tickets. There is no way I would personally pay thousands of dollars for a slightly-less-uncomfortable 10 hour (or whatnot) experience. I can’t disagree that it’s worth more than a coach ticket, but typically it’s not worth enough more that the value of the points beats out 1 to 5% cash back you can get with far less hassle and effort. Pareto at work… Read more »

Nachomama
Nachomama
8 years ago

I’ve been using CC points to travel for over the last ten years. And like everything else, what was once a good thing has been whittled away with restrictions and find print. Some of the gotchas to look out for include: 1. It’s no longer a set amount of points for a flight. The amount of points required directly correlate to the price of the ticket. 2. I recently flew Delta on a free ticket , checked in at the curb just to get to the gate to be told that the flight was oversold and I no longer had… Read more »

Tracy
Tracy
8 years ago

We have multiple travel and other reward cards, but don’t pay annual fees so our reward to sign up was smaller. The Hilton one has paid off in free hotel stays for sure – especially when we can be flexible and take advantage of point stretcher stays where the points needed for a particular hotel usually drops by about a third. We got an Amtrak card right as my husband travel for work decreased, so timing was not smart (you get bonus points when using the card to purchase tickets) but have used those points a number of times as… Read more »

Amy
Amy
8 years ago

We’ve been happy American Express Delta Skymiles members for more than 3 years. Compared to April, we have only just begun! However, we use the credit card like a debit card (we only use it if we have the money already and pay it off each month so as not to incur interest), so we accumulate miles rapidly. The two of us have pretty much been able to fly once a year for “free”. I love this, because before 3 yrs ago, we had only flown once in 5 years. Having the “free” airplane tickets encourages us to travel/vacation more… Read more »

Jane
Jane
8 years ago

“If you don’t have the time to apply for a credit card with a $600 sign-up value, then you probably don’t have time to read this post either.” I think when people say they don’t have time to do something, really what they are just politely trying to express to you that they don’t WANT to do something. I personally find your point here pretty patronizing, i.e. if you don’t do what I do, your reasons must be invalid. Why are you trying to convert people to your way of doing things anyway? And if everyone starts doing what you… Read more »

Dan
Dan
8 years ago
Reply to  Jane

I’ve posted before in the comments about my miles and points successes, and more than few people were interested in a guest post from me. Really, I don’t think the author is trying to “convert” anybody, more than he is trying to show them the light. There’s a lot of people on here who are clueless on how to get started. But it also depends on what your priorities are. Last year, with a little bit of leg work, I bought business class tickets from JFK – Bangkok/Bali for $2300/ticket. At the time, I had no points, but I used… Read more »

Jane
Jane
8 years ago
Reply to  Dan

When the author breaks down in detail why the reasons people give for not doing these deals are invalid, I certainly think this implies that he is trying to convince people who stubbornly remain unconvinced. Yes, I think this is useful information for people who want to do this. But I was merely pointing out that this section of the post was a little irritating, because it implied that people’s reasons were just excuses keeping them from something they really should be doing.

Miser+Mom
Miser+Mom
8 years ago
Reply to  Jane

Or you could read this (as I did) as a kind of self-defense. When you live life differently from other people, you can get a lot of criticism. I saw this section as sharing responses he’s developed to counter those who scoff at him.

If you’re going to live a little oddly, it’s nice to have a set of careful explanations ready at hand. I know I have a long list of “yard sale” explanations, different in content but probably similar in tone.

Craig Ford
Craig Ford
8 years ago
Reply to  Jane

Jane, Sorry the tone of my statement bothered you. Those of us who collect miles (like Dan) just get excited about it and I guess sometimes we can overstate our case. The point was simply if this is something you’ve not given serious consideration to doing this may be the right time. I certainly don’t think there’s anything wrong with people who don’t want to sign up for cards for the bonus, but I just want to be sure people are properly informed before dismissing it as some type of a scam. I’ll be traveling with my wife and three… Read more »

Jane
Jane
8 years ago
Reply to  Jane

Craig – I actually like Miser Mom’s explanation that you probably get a fair amount of skepticism from people about this, and that is the reason you dissected people’s reasons for not doing this. I’m glad that this information is presented for those who want to avail themselves of it.

I’m impressed that you travel to such far away places with your children. I have two young boys, and the thought of traveling to Malaysia with them on vacation sounds about as fun to me as a trip to Guantanamo.

El Nerdo
El Nerdo
8 years ago
Reply to  Jane

He’s traveling from Papua New Guinea where he’s based.

sara
sara
8 years ago
Reply to  Dan

Dan,
You have done well! What was your best way of accumulating rewards? Thx!

Dan
Dan
8 years ago
Reply to  sara

Credit card sign up bonuses. Craig talked about the big ones in his post.

Princess_Gweniie
Princess_Gweniie
8 years ago
Reply to  Dan

$2000 for a beach-front bungalow in Thailand?!? I paid $20/night.

Heather
Heather
8 years ago

Agreed! Thailand is awesome: $20 a night bungalows, $5 massages, and tasty food for cheap! Now that’s the way to travel!

I think if you stay in a super swanky hotel (even for “free”) you will end up paying more for things like Internet, food, and drinks. I never use rewards on hotels, because what’s the point of staying at a hotel that will nickel and dime you for everything when you can find other hotels with more atmosphere for less cost?

Dan
Dan
8 years ago

$400/night isn’t bad for a place that runs close to $900 in the peak season.

My wife and I live in an average, run of the mill apartment in suburban Washington DC. The place sets me back $1200/mo, and it’s really nothing special.

I’ve done the youth hostel thing before (private rooms even) and they were just fine. But because we live like misers during the year, it really magnifies the beauty of swank.

There’s a couple of bloggers that I read that make a point of pointing out which redemptions are some of the best values for points.

Dan
Dan
8 years ago

Heather,

You are right to some extent. In the city, those side issues don’t bother me. The good hotels are located in parts of the city where you have restaurants and bars out the ying-yang right out the front door. And I don’t hang around and surf the internet all day… I’m on vacation, I try to leave the computer at home.

Resorts, OTOH, are a bit different. It *is* harder to escape the resort prices, but I plan my trips carefully and try to find places that have local eateries convenient to the property.

Steve
Steve
8 years ago
Reply to  Dan

Unless you would have paid $26000 for those tickets, you did not get $26000 worth of value.

Steve
Steve
8 years ago
Reply to  Jane

On the one hand the author makes a valid point in a somewhat humorous way. If your time is so valuable, why are you wasting it reading this article? On the other hand the data he uses is faulty. It might take one hour to earn “$600 worth of points” but how many hours will it take you to find something you can actually get with those points? What compromises will you have to make – connections, mid-week flights (not very efficient if you have a monday through friday job)? Cashing in your credit score for points is easy, it’s… Read more »

Mark
Mark
8 years ago

This sounds like a great way to torpedo your credit score. Not for me.

I’m glad that you had sucess redeaming FF points and miles. I built a stash traveling for work and it was a PAIN to redeam them… tiny availability that required me to have long layovers and very undirect flights. Plus, for a free ticket it had a lot of “fees and taxes”… really took away from the savings.

Gimme a good cashback card that doesn’t force me to do anything but save my money and spend it where i like, without hassel

Dan
Dan
8 years ago
Reply to  Mark

Done in moderation, it doesn’t hurt. Some people go hard core — one guy did 13 apps in one day.

But a couple of inquiries every few months is no big deal — probably about 5 points per hit.

Steve
Steve
8 years ago
Reply to  Dan

The “tiering” of credit scores can make this *worse* for your credit than something more gradual. Each application may ding your score 5 points, but if your score was 704 and the cutoff was 700, suddenly you drop to a lower tier and your interest rates go up. You can buy your scores (though I would bet you a dollar that they won’t match what the lenders get) but you can’t know what the tiers are for every and all lenders. I am nothing but negativity in my necrocommenting (I guess what I’m really saying when I say “but what… Read more »

Derek
Derek
8 years ago
Reply to  Mark

It does affect your credit score but not “torpedo” it. 13 apps in 1 day is intense because every credit card that gives you a bonus requires some form of spending requirement. So even if they got approved for 13 apps and each card required a minimum of $3k in spending over the next 3 months, they would need to charge $39k in the next 3 months on to those credit cards in order to earn the bonus. For most people that is impossible, unless if you run a business that does a high amount of spending.

sora
sora
8 years ago

I am a little ambivalent about this. Ia pplied for the Chase/British Airways card based on a post by J.D. a few months ago. To date, I have not been able to redeem the miles for anything. I can never find a flight online. I have to call them, wait an eternity to talk to someone and then find out that the dates I want are not possible. Love the concept in theory, esp when reading others’ experiences, but somehow have not been able to quite create a magical free vacation for myself. I have had the best success with… Read more »

Craig Ford
Craig Ford
8 years ago
Reply to  sora

Sora,
If you visit my blog you’ll find my contact information there. Get in touch with me and I’ll be glad to help you search for availability using your BA miles. I can give you a few tips to be sure you’re exploring all your options.

Dan
Dan
8 years ago
Reply to  sora

I took my BA points, combined them with some AmEx MR and Chase UR points, and got first class tickets to Asia. 20 hours in the air each way, flat bed, champagne, caviar, lots of fun…

Your BA points (now branded as “Avios”) are best used for non-stop flights on one-world (BA alliance, including American) flights.

Sora
Sora
8 years ago
Reply to  Dan

Thank you both for replying…i will reserach this a bit more.
Dan, i hear you, but i am saying i just can,t seem to get anywhere with the system, so so far, it has not been of much use. Amex on the other hand is easy as pie, so at least i have gotten something out of it. Nothing as grand as you, but i have 100k+ in avios points, absolutely no luck with getting anything from it. As of yet. But i will mosey over to Craig’s site and see if i can do any better

Dan
Dan
8 years ago
Reply to  Sora

What do you *want* from it? BA irritated the US market with the change to Avios. It used to be that the best deals were on partner awards (Cathay, LAN) to Asia and South America. BA flooded the market with points (credit card bonuses, AmEx transfer bonuses) knowing @#$% well that they were going to significantly devalue the best redemption opportunities. You now have to redeem your points one *flight* at a time, making all but non-stop flights to/from One World hubs drastically expensive.

The most cost effective awards with Avios are now pretty mundane short-haul flights.

Amanda
Amanda
8 years ago

I find the point cards far easier to use. I’ve basically outfitted myself for work using the points I earn on my Amex. Go through eBates first and you save even more in the form of cash back. No blackout dates, no restrictions, and my card has no fees.

jack foley
jack foley
8 years ago
Reply to  Amanda

Is there anyone here who has American Airline points?
Have you held onto your points since they have gone into receivership?

Dan
Dan
8 years ago
Reply to  jack foley

Yup. 300,000 AA points here, not breaking a sweat at all.

Craig Ford
Craig Ford
8 years ago

@Jimmy, One great thing about the Chase Freedom card is that it gives you a host of options. If a person also has the Chase Sapphire Preferred (or gets it after using the Chase Freedom for several years) they can then transfer all of their points earned with the Freedom card to a few airline programs like United, Continental, or British Airways. This way if you can get a flight with less miles use miles or if you can get it cheaper with cash then cash out your points. With the Freedom card it doesn’t need to be either/or, but… Read more »

Heather
Heather
8 years ago

I LOVE to travel, but I have always had difficuly using my FF miles (through AA, Delta, and BOA credit card). In fact, I have enough miles through American to go to either Europe or some parts of South America for free. However, these miles are basically useless, because I cannot get flights to the destinations I want. Is it because my preferred airport is smaller (IND)? Is it because I’m too picky about destinations(although even the major hub AMS isn’t available)? I don’t know, but the deals seem awfully elusive. I don’t want to use all my miles on… Read more »

Dan
Dan
8 years ago
Reply to  Heather

Buy the tickets to nearest gateway, and use rewards from there. My wife and I live in DC, but find ourselves flying Cathay Pacific when we’re burning One World miles. Cathay only flies from LAX, SFO, ORD, and JFK, so we’ve got to get to their gateway. Because of ticketing issues (buying a ticket + reward ticket = screwed if your flight is late) we’ll typically fly into the gateway a day or two early and make a mini vacation out of it. This same principle applies in my many circumstances. Sure it adds to the cost, but hotel points… Read more »

El Nerdo
El Nerdo
8 years ago

So, the conclusion I drew from this article is that there is a time cost to “free” travel… time that you could spend enjoying life, or making extra money, or chasing after credit card deals and fitting you trips around blackout dates… The other couple of things that weren’t included in the “everything” is that a) people will be tempted to waste money on unnecessary purchases because they come with “free” miles (somewhat similar to the “anchoring” phenomenon discussed the other day), so as “disciplined” as you may think you are, you’ll keep staring at the forbidden fruit until maybe… Read more »

Dan
Dan
8 years ago
Reply to  El Nerdo

El Nerdo, As someone who understands this game well, you are right that there is a time component to it. I actually *enjoy* this kind of thing. It’s fun. It’s a game. And I’ve gotten to see and experience things in life that many Americans never will. If you want to say that I’ve “lost” at it, because the house always wins, well, we all have a right to our opinions, don’t we? But, it doesn’t take as much time as you think it does. TBH, the longer you play the easier it gets, and the less of a time… Read more »

Steve
Steve
8 years ago
Reply to  Dan

The difference is that you eat every day, so there’s lots of chances to practice cooking. But if you have a regular, 9 to 5 monday to friday job, you don’t have enough vacation days to get good at hunting down the reward redemption opportunities.

Craig Ford
Craig Ford
8 years ago
Reply to  El Nerdo

El Nerdo,
In the last year I’ve book $26,000 worth of travel for myself and my family. If the house is winning I invite them to continue to do so.

El Nerdo
El Nerdo
8 years ago
Reply to  Craig Ford

@ Dan – I actually enjoy writing harmless rants on the internet. Writing is… therapeutic, for me. I find the discussions stimulating and I laugh tons while I’m at it. And laughter is priceless. Totally worth my time– which is why I do it almost daily. I also love cooking: delicious and fun, the slower the better. (When it’s truly something enjoyable, you don’t want to do it faster… and that applies to a lot of things.) I get that you enjoy chasing credit card rewards, and by all means I congratulate you on your fun, but to me the… Read more »

Jane
Jane
8 years ago
Reply to  Craig Ford

This might be a crude comparison, but is this number like the amount a grocery store says on the bottom of the receipt you “saved” in sales and coupons? You didn’t really “save” it if you were never going to spend that amount in the first place or if that number is an inflated price you wouldn’t have paid for anyway. And I do think the point someone made above is pretty good. I imagine when you go to SE Asia you spend extra money on sites and food and experiences. I don’t think anyone would say travel isn’t a… Read more »

Dan
Dan
8 years ago
Reply to  Jane

Jane, I don’t think anybody means to imply that trips have no out-of-pocket expenses whatsoever. Personally, I figure out what I’m willing to spend on a particular year’s vacation and then try to use my miles and points to help me take the most enjoyable trip possible. I can go to Sandals for a week or go to SE Asia for a month. 3/4 of our trip budget is for things like meals and entertainment. One reason I love love love using miles for travel to Asia is that it’s generally pretty cheap once you get over there. Last year’s… Read more »

Matt, Tao of Unfear
Matt, Tao of Unfear
8 years ago
Reply to  Jane

I got my trip with $0 in out of pocket expenses. Nothing for flight, lodging, food, or transportation. Nor for the one museum I went to, or the various tours I was taken on. I saved money on groceries and transportation while I was vacationing. You have to decide how much you’re willing to pay, and if that amount is $0, then get creative and you can manage. Just wish my guest post was up at BAS so I could link to the details of how I did it. I had absolutely no budget for travel, and didn’t want to… Read more »

Shaune
Shaune
8 years ago

I tried signing up for the ebook but it wasn’t working for me. I kept going in loops without an actual link to the ebook.

Brianne
Brianne
8 years ago

I rarely accrue enough miles to actually obtain free flights because I tend to buy the cheapest ticket whenever I travel. After paying $100 in baggage fees over Christmas though, now I realize that I would’ve saved money with a Delta branded CC. Something to look into for the future.

I think that using an airline miles card would just be a bonus to getting better treatment by the airline and free baggage.

Golfing Girl
Golfing Girl
8 years ago

I waited for a special from Priority Club and got their Chase Visa to get 80,000 Priority Club points (roughly 4 nights at a mid-higher level hotel). No fee the first year and only $49 after that, but you get a free night at ANY of their hotels in return for that $49 fee. I figure if we use it at a $200/nt hotel it’s worth it, plus you keep accumulating points with purchases.

Craig Ford
Craig Ford
8 years ago
Reply to  Golfing Girl

Golfing Girl,
The 80,000 Priority Clubs is hard to beat. You could get 16 nights if you found a good Point Break location.

Jackie
Jackie
8 years ago

Do you cancel these cards then before the annual fee comes due? If so, does that affect your ability to use the miles you’ve accumulated?

Craig Ford
Craig Ford
8 years ago
Reply to  Jackie

Jackie,
You may or may not lose your miles. It depends on the card. In general, if the credit card company ‘owns’ the miles or points you’ll want to use them before canceling the card. If they use other miles or points you don’t need to worry about losing them. You’ll want to know for sure before canceling your card. If you’re wondering about a particular card just let me know.

Matt, Tao of Unfear
Matt, Tao of Unfear
8 years ago

I definitely signed up for the Southwest card to get a free domestic flight to New Orleans. My whole trip was free, actually. This was right after I lost my job (actually, flew out the very next day). Takes a little bit of creativity, but there’s no reason to drop a bunch of money on travel if you don’t have to.

krantcents
krantcents
8 years ago

I use my frequent flier mile to travel overseas too. We generally fly business or first class to Europe every other year. It is definitely worth it for us.

PawPrint
PawPrint
8 years ago

I have a Capital One Rewards card (no annual fee) that we used to fly to Boston, then on to England and returned the same way using the points plus we had enough for the hotel in Boston and a rental car. Southwest, which I fly most of the time, sends me lots of solicitations, but I just can’t get past the annual fee. I should do the math to see if paying that annual fee for the extra rewards would be worth it, but I have a psychological block against annual fees.

Matt, Tao of Unfear
Matt, Tao of Unfear
8 years ago
Reply to  PawPrint

On my Southwest card, you get $50 worth of points each year, and the annual fee is $69 dollars. The actual sign up bonus covers the additional $19 a year for 22 years. So, even if you derived no other benefit from the card, you’d have to keep it for 23 years before the sign up bonus + the annual bonus didn’t cover the annual fee. I don’t like annual fees either, but it was worth the free trip for me. (Of course, the terms of the SWA card have changed slightly since I got it in Octoberish. You get… Read more »

Steve
Steve
8 years ago

Do you have to spend money to get the $50 worth every year? Or is that just an annual bonus for paying the fee?

Craig Ford
Craig Ford
8 years ago
Reply to  PawPrint

PawPrints,
Matt is right that the retention bonus really evens things out with the Southwest card. They were having a 50,000 point sign up bonus so if that comes back again I’d say it would definitely be worth signing up.

smedleyb
smedleyb
8 years ago

Credit card sign-up bonuses make sense if you find yourself doling out thousands a year for travel. A family of 4 making a couple trips a year — let’s say a week in some sunny locale, a 4 day trip to a ski-lodge, weekend stays here or there to visit family, museums, amusement parks, etc. — can derive huge savings from churning through multiple cards a year. To each his own, I say. I understand and respect those who don’t want to play. The risks and pitfalls are numerous; you need to be organized and diligent about the many accounts… Read more »

Maggie@SquarePennies
8 years ago

There’s a business opportunity here for someone with the expertise. I’d be happy to pay a fee for someone to do the legwork for me, and I bet others would too. I guess if too many people did it there would be changes.

Grace Pamer
Grace Pamer
8 years ago

Thanks for sharing this informative post! It can help a lot of credit card holders like me plus make us know that we could actually travel using our CC points. I seriously think the sign-up bonus strategy of most credit card companies can really entice one to sign up for a credit card.

Sam
Sam
8 years ago

I’m interested to hear from the folks who play the rewards game as to whether they have any qualms with the financial impact of rewards credit cards on both small business owners and other consumers that basically subsidize your points? Is it fair to ask the poorest among us to pay more for goods and services to provide free points to those that are, in general, wealthier? The price of your points are either absorbed by other consumers who do not benefit or cannot benefit or by the business. Do you refrain from using your rewards cards when you patronize… Read more »

Dan
Dan
8 years ago
Reply to  Sam

Absolutely not. You’re asking two questions here — one is about small businesses, the other is about poor people. With regard to small businesses, I don’t give them special status because they’re local. In the end, if their products cost me more, they better deliver better value. If they don’t, then that’s not my problem, and it’s actually stupid from a PF standpoint to patronize them. No business is required to accept credit cards, so they do have the choice to avoid the interchange fees and lower their prices. But wait! Nobody will shop there if they don’t accept credit… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  Dan

Free markets require free information (or they are not free), so Iet’s all be aware of the fact that you run a website that sells credit cards to Americans while living in a 3rd world country where life is cheap. You have an interest in the success of your business, so we can’t assume that your information is 100% fair and unbiased. You’re selling a product, you want us to buy it– every good business person does that, of course, but they are biased in favor of their product. So, in a free market, some people care about the source… Read more »

Dan
Dan
8 years ago
Reply to  El Nerdo

El Nerdo, I think you’ve confused me with someone else, because I don’t own a business nor am I offering to sell you something. If you think I’m Craig posting under a different name, go ask JD to check the email addresses — I’ve been commenting under this one for well over a year. That said, there’s no way the credit card industry “preys” on the most vulnerable. First, they can’t get “good” credit cards. The ones they can get are loaded with fees. And you know what? They should be. No person has an inalienable right to cheap credit.… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  El Nerdo

LOL yeah, sorry, I *did* confuse you with Craig, ha ha ha. I couldn’t tell the difference! O well. Thanks for clarifying. And no , I didn’t accuse you of impersonating him; if I thought you played a part in this I’d accuse you of shilling, but I haven’t done that–just an honest case of mistaken identity.

momof2
momof2
8 years ago

I never leave any comments, but had to chime in this time.First, I am extremely surprised at the negative comments toward the poster. Some are even questioning the integrity or the morals of so called “point chasers”. Well, I am a point chaser and not ashamed of it! I never lie on my credit card applications . In fact, since I became a stay at home mom a few years ago, I can only apply under my husbands name( with his permission), since the credit apps now ask for individual income. Its credit card companies, who make an offer, and… Read more »

Dan
Dan
8 years ago
Reply to  momof2

There’s this really weird anti-credit sentiment that shows up on this board from time to time. I don’t quite understand it, and this comes from a guy who once had his credit wrecked and couldn’t borrow a dime.

Credit can be a useful tool, and there were times I would have been screwed if it wasn’t for it.

El Nerdo
El Nerdo
8 years ago
Reply to  Dan

What you wrote here illustrates exactly what’s the problem: people confuse credit cards with savings or insurance. Credit is a “tool”, but people use it like using a screwdriver to hammer nails or to saw wood– a cure of all of life’s little problems. And yes, credit is about “personal responsibility,” but decisions happen in a distorted environment where credit is presented as a gateway to an improved lifestyle and a solution to most of life’s problems. How many people don’t have an emergency fund because they rely on credit cards? I’m all for credit when it’s the productive kind–… Read more »

Dan
Dan
8 years ago
Reply to  El Nerdo

From a macro standpoint, the biggest problem I have is that increased access to credit => increased demand => increased prices. Above, Sam asked if people in general care about the costs that credit cards impose on businesses and poor people. I took his question to be quite narrow — more or less related to the interchange fees that businesses pay to process credit cards. Those are chump change. What’s worse is the people who irresponsibly use credit and drive up prices for us responsible people.

These days, I use my cards and collect my points.

BradB
BradB
8 years ago

Great tip on #2. It gives a little clarity and thought to a subject that too many blogs I have read just gloss over. It’s worth noting that people can stumble into a 700+ credit score or they can purposefully build one. When they act with a purpose and a plan they can keep their great credit and take advantage of reward type offers. It’s all about the strategy behind how they use them. Great post!

Anthony
Anthony
8 years ago

So which card is best? Also, how do points translate into miles? So I get 50,000 points at sign up, what does that equivalate to? I know this year I will be buying tickets to fly to France (probably $1000+ each). So I was really thinking about opening a card. I noticed most of them have annual fees, is this not a big deal base don the rewards you get? I currently have a citi card, and get only 1% back for all purchases.

Craig Ford
Craig Ford
8 years ago
Reply to  Anthony

Anthony, The ‘best’ card is based on your travel preferences. How points translate into miles depends on the points programs. Sorry, I know I’m not being helpful! I would suggest you check out my free eBook (How to Earn Hundreds of Thousands of Frequent Flyer Miles) referenced in the post. That will help you answer your question. If you were to get the Chase Sapphire Preferred you’d get 50,000 points which can be transferred to 50,000 United miles (and others). If you prefer you can use it as $625 towards a ticket purchased through the Ultimate Rewards booking portal. Many… Read more »

Matthew
Matthew
8 years ago

A word on the British Airways card… Yeah, I’ve seen the above. It’s VERY limited. If you’re wanting to go anywhere in Europe except for London, be prepared… They force ALL European traffic from the US to layover in London. Not only is this inconvenient, but it also concentrates demand for the points. I’m now in the position of competing with everyone flying out of O’Hare (one or two people here and there) to London, regardless of my intended destination. I got these points last year and have yet to be able to use them. I was trying to book… Read more »

Craig Ford
Craig Ford
8 years ago
Reply to  Matthew

Matthew,
Flying to Europe is the worst way to use BA miles (sounds backwards, right?). I 100% agree with that.

We used our miles to fly to Argentina.

However, it is not true that all One World flights to Europe must go through London. If yo use the miles to fly on American you can bypass London. What you cannot avoid is the fuel surcharge.

FYI – I just booked tickets from HNL to Paris for September and found availability on American.

Steve
Steve
8 years ago

Collecting points is easy. It’s using them that is hard. Is there some forum or service that helps you book flights with all those “valuable” miles?

CH
CH
8 years ago

The other problem is that you have to spend enough per month to accumulate miles. If you don;t spend a lot per month then the annual fees eat away the benefits and it takes forever to accumulate flights.

Anthony
Anthony
8 years ago
Reply to  CH

So the best thing to do would be to sign up for a mileage reward point card with certain airliens like Delta, AA, etc?

BradB
BradB
8 years ago
Reply to  Anthony

Hey Anthony, there are plenty of ways to easily spend the money to earn the rewards points. I just finished a post about how to spend enough to get the 50,000 rewards points for the Chase Sapphire Preferred card. That post will be up later today, but my point is, you could use the strategy I detail in my post with other cards as well.

BradB
BradB
8 years ago
Reply to  CH

One of the strategies that we have found works best that a lot of people neglect is to simply use the card for all purchases that you would usually pay cash for. Most people find they will meet the monthly or quarterly requirements very easily by doing this. Added bonus, you not only reach your mileage requirements, you also build a great payment history with your card that encourages them to increase your limits faster. Caveat – it does take discipline to make sure you send the cash payment to the card that would have normally paid the bills so… Read more »

Steve
Steve
8 years ago
Reply to  BradB

That is the most obvious strategy and pretty much the first rule of rewards cards. Who do you think is neglecting it?

BradB
BradB
8 years ago
Reply to  Steve

I agree that it seems to be the most obvious strategy. But I’ve learned by the thousands of emails we’ve received that are addressed by sharing that answer, that I can’t take anything for granted.

So who’s neglecting it? In my experience it’s mostly people who are new to the concept of rewards cards and just need a little shift in their financial thinking.

Anthony
Anthony
8 years ago

I understand using it for all purchases(at least to the best you can). But the annual fee still makes me uneasy. I’m very conservative with money, so paying a yearly fee of nearly $100 is still hard for me to accept.

Dave the Budget Traveler
Dave the Budget Traveler
8 years ago

@Anthony – very understandable. Do note that many of the best bonus offers don’t require an annual fee the first year (including the Chase Sapphire that BradB mentioned earlier). You also may consider downgrading the bonus offer card to a free card between 6 months and 1 year after opening it to avoid the fee while avoiding the potential negatives of closing a credit line unnecessarily (there are pros and cons to that). For your example, 50,000 Chase Ultimate Reward points convert to 50k united points. USA->Paris on United is 60,000 round trip (assuming you are booking in a time… Read more »

NoobTraveler
NoobTraveler
8 years ago

An update to Dave’s comments. The problem is that the Chase Saphire just dropped their bonus to 40K. But it is still a good value.

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