{"id":116382,"date":"2011-12-27T06:00:35","date_gmt":"2011-12-27T13:00:35","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=116382"},"modified":"2024-03-05T21:38:44","modified_gmt":"2024-03-06T04:38:44","slug":"everything-you-need-to-know-about-using-credit-card-bonuses-for-free-travel","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/everything-you-need-to-know-about-using-credit-card-bonuses-for-free-travel\/","title":{"rendered":"Everything You Need to Know about Using Credit Card Bonuses for Free Travel"},"content":{"rendered":"

The following article is written by Craig Ford.<\/strong> Craig blogs at <\/em>Help Me Travel Cheap<\/em><\/a> where he helps newbies turn credit card sign-up bonuses into free travel.<\/em><\/p>\n

To entice you to sign up for a credit card<\/a> most credit card companies offer a sign-up bonus.<\/p>\n

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.<\/p>\n

The objective is simple: try to collect and redeem many frequent flyer miles so you’ll never have to pay for a vacation again.<\/strong><\/p>\n

Today you’ll learn how to strategically get started using credit card sign up bonuses to accumulate free travel<\/a>.<\/p>\n

Why are people hesitant to use credit card sign-up bonuses to accumulate miles?<\/strong>
\nPeople 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<\/a> sign up bonuses in an effort to earn travel miles.<\/p>\n

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  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.<\/strong> My response:<\/em> Credit card companies play the averages. The average<\/em> 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<\/a>, 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.<\/li>\n
  2. It will hurt my credit score.<\/strong> My response:<\/em> Without a doubt, it will affect<\/em> 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<\/a> and take care of your credit score.<\/em><\/li>\n
  3. There are too many rules and restrictions that make the points or miles hard to use.<\/strong> My response: <\/em>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 \u2014 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.<\/li>\n
  4. The temptation to have a credit card is too much, and I always overspend.<\/strong> My response:<\/em> 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<\/a>.<\/li>\n
  5. It’s not worth the time.<\/strong> My response:<\/em> 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.<\/li>\n<\/ol>\n

    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.<\/p>\n

    So does it really work? My trip report<\/strong><\/p>\n

    Here’s a quick roundup of how I used some of my miles and points in the last year to save money on travel:<\/p>\n

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    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 \u2014 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.<\/strong><\/li>\n
    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.<\/strong><\/li>\n
    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.<\/strong><\/li>\n<\/ol>\n

      In my opinion, the results speak for themselves.<\/p>\n

      How to get started collecting your miles and jetting around the world<\/strong>
      \nYes, 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.<\/p>\n

      To help you get started, here are a few resources:<\/strong><\/p>\n