Traveling is a strong a passion mine. It has been for as long as I can remember, and is one of a handful of experiences that truly resonate with the soul. Travel can be challenging, rewarding, exhausting and humbling, and is the most authentic experience I've had individually.
But it is also expensive. So, to fuel this passion, in 2011 I began applying for 15+ credit cards a year in order to earn frequent flyer miles. Since then, I've earned over 4,000,000 points and miles and traveled to over 50 countries. Meanwhile, my credit score has risen past 800.
Many websites dedicated to earning miles will lay out complex schemes to maximize every single dollar you spend. Often these sites will recommend having many credit cards in your wallet, at all times, for all types of spending – gas, groceries, restaurants, etc. Then they advise you to open up multiple bank accounts to layer onto these cards rewards. It quickly becomes a nightmare to manage.
This is not one of those websites. My strategy – and what I recommend to you – is to keep it simple. While you may choose to apply for multiple cards a year or just keep one, trying to manipulate every dollar you spend is a dizzying feat and, in my opinion, not worth the effort.
My Mission Is To Maximize The Dollars You Already Spend Without Adding Any Extra Costs.
So what does this mean for you? Let us start with what you should not expect to do. You should never pay an annual fee, unless you choose to do so. You should not apply for spend thresholds (e.g. $10,000 in three months) if you are not able to meet it with regular spending. You also should not worry constantly over how to manage every dollar or flight redemption.
Most importantly, when done correctly, you should not see your credit score drop much, if at all. In many cases - like mine - your credit score will actually raise.
What you should expect to do is create - and stick to - long-term goals. Choose any corner of the world you want see. There is a number of miles – and thus, a certain card – that will get you there. But it requires time, patience, and an open mind for what I am going to teach you. It also means managing finances across multiple banks (and being okay with that). And, finally, it sometimes means having to cancel credit cards. Don’t worry, as you will see later this is a far smaller impact then you imagine.
Ultimately You Are Taking A Leap Of Faith - In Exchange For Significantly Cheaper & Better Travel.
But before delving further into the miles earning space you, the reader, need to consider what is appropriate for your current situation. For example, will switching from debit to rewards credit cards result in financial debt? Then the miles aren’t worth it. Do you not have time or energy to effectively manage multiple cards from multiple banks? Then apply for a card or two of the best available credit cards and keep those as your only cards.
Maybe most important: do you need absolute certainty before any financial decision? Then this hobby may not be for you. Deals come and go, and sometimes you are rejected for a card. This is okay though - and I'll show you why.
With all of that said, if you have an interest in unlocking significantly cheaper travel and can manage your finances, this blog is for you. This guide takes you, the reader, in five steps from present day - no miles, no knowledge - to routinely redeeming miles for multiple vacations a year.
Here is how you get started.
STEP 1: SIGN UP FOR PROGRAMS
Wondering what frequent flyer programs to sign up for? You aren't alone.
The first step in elevating your travels is to become a member of the programs. The first frequent flyer program was started by American Airlines in 1979; since then, over 20 trillion miles have been accumulated by people worldwide, which corresponds to well over a trillion US dollars. The programs are highly profitable for airlines, hotels and banks, which means there is ample opportunity to earn miles.
Below I outline the best frequent flyer programs and those I recommend signing up for initially. Once you sign up for these – and organize the numbers, usernames and passwords – you can move onto step two.
Note that clicking the name of each program will redirect you to their enrollment page.
- American Airlines AAdvantage – There are many that complain about American but I am not one of them. Their new fleet of planes is top notch and award flexibility is huge. Citibank has continued to offer big bonuses for their credit card as well.
- Delta Sky Miles – Delta remains a top-tier airline for domestic award flights. Several American Express card options and the ability to transfer from Membership Rewards are big positives, but recent miles devaluations have limited the program's competitiveness domestically. Still a must have for anyone in this space.
- Southwest Rapid Rewards - Southwest has been expanding their destinations rapidly as a great program for domestic flyers. Their credit card is with the world’s largest credit card issuer, Chase. Many of this bank's cards are transferable to Southwest, only increasing the program's value even more.
- United MileagePlus – This is my preferred U.S. carrier for international award flights, especially in economy class. Another credit card relationship with Chase means the same flexibility as Southwest, a considerable perk when redeeming award flights requiring more than a single card bonus.
- Hilton HHonors – Hilton properties are everywhere with extensive redemption options. While value-per-point has dropped recently, good credit card options with Citibank and the luxury Conrad properties make it a must.
- Hyatt Gold Passport – Hyatt properties, specifically Park Hyatt, are pure elegance and somehow redemption value is still better than most. Several credit card options with Chase make this my personal favorite.
- IHG Rewards Club – An extensive collection of hotels, including InterContinentals, make this a solid program. As with Hyatt, a Chase credit card relationship means multiple earning opportunities.
- Marriott Rewards – Marriott properties, as well as the luxurious Ritz-Carlton, are all over the world with good redemption options. Having a Chase credit card - and similar flexibility - makes it another must-have.
- Starwood Preferred Guest – SPG may have the best quality-to-point ratio of any hotel program, a significant feat. American Express credit card options are available as well.
- Amtrak Guest Rewards – This is ideal for those residing in the U.S. Northeast. Amtrak has a credit card and often runs point promotions. Less lucrative than international flights, but nonetheless a good value for some.
- AAdvantage Dining Rewards – These are available for all the major airlines, but I recommend AA. Register your credit cards and then let it be; if you live in a big city, you can expect random bonus miles every week or two.
Need A Break Yet?
I agree - the process of setting up your future, enhanced travel is not particularly fun. But the good news is once you have set up your programs - and organized them appropriately - you rarely have to worry about them again. It's a one-time investment of time with the potential for an extremely lucrative return.
And, with a robust collection of the best travel tools at your disposal, the process of remembering program numbers and passwords has never been easier. But enough on this aspect - you are ready to move on to step 2.
STEP 2: UNDERSTAND & IMPROVE YOUR CREDIT SCORE
A Firm Understanding Of Your Credit Score Is The Easiest Way To Improve It.
Which is why earning points and miles starts with your credit score. Fortunately, the widely held notion that more credit cards means a lower credit score is false – in my experience. My score has actually improved since I began earning miles.
Whether you’re a beginner or expert, this post serves as a useful reminder of your credit score, its components, and how to obtain - and then maintain - a high score.
Part 1: Know Your Score
This part is simple: sign up at CreditKarma to view your credit score. The service is free and does not impact your score in any way, and you can check as frequently as you would like. While not 100% accurate, the score is a legitimate gauge and can be used safely in preparing for card applications.
For our purposes, consider a score of 680+ necessary to have approval chances for top-tier rewards cards. Did I mention part 1 was simple? On to part 2.
Part 2: Understand Your Score
This may be the least fun yet most important part of earning points and miles. As a brief summary, your score is composed of six parts:
- Payment History – The #1 most important aspect of your score. Pay your bills on time, every time and you’ll receive an “A” in this category.
- Derogatory Remarks – These are negative marks on your credit, often resulting from outstanding debts, bankruptcies, etc. This is also often misreported by a credit bureau, meaning you’ll have a mark that is not accurate. Probably the easiest way to boost your score: find a mistake and fix it.
- Credit Card Utilization – Your balance versus your total available credit. For example, purchasing $1,000 on a credit card with a $10,000 credit limit would result in a 10% utilization rate ($1,000/$10,000) – the lower the percentage, the higher your score. Pay your bills in full and on time and you’ll receive an “A” in this category.
- Age of Credit History – One of the top reasons for denial of rewards cards: this is total length of credit history divided by number of cards. For example, two cards – one opened today and another opened 10 years ago – is an average age of five years. But two cards both opened today would have an average age of a day. The longer your average age the better.
- Total Accounts – Exactly what it means: how many credit accounts you have. One note, 20-25 open credit cards is not uncommon and can lead to a higher credit score than having under 10 accounts!
- Credit Inquiries – When you apply for a credit line, the business will “pull” your credit report to determine if they should approve you. This is considered a hard inquiry (as opposed to a soft inquiry which does not affect your score). These typically only reduce your score by a few points and have minimal impact on your credit score, but too many hard inquiries can be a red flag when applying for a new card.
I can't stress the importance of understanding the above factors. If you have any questions, comment below. But if you are ready, move on to part 3.
Part 3: Improve Your Score
For those with scores under 680, there are many ways to improve your score quickly. These options are in addition to establishing healthy credit-habit routines like not getting into debt and paying your bills in full - or close to in full - every month.
- Pay down your balances to (nearly) zero. This is essential for any mileage earning strategy and decreases your debt to utilization ratio. I try to always have a small balance on one card, making up no more than 1% of my available credit.
- Check if you have a derogatory mark. If you have one, immediately call the credit bureau to find out what it is and how to remove it. Often it will be a mistake; other times an old bill that went unpaid. Regardless, remove it and watch your score improve.
- Master the authorized user. See if you can be added to your parent/spouse/friend account. By becoming an authorized user, you inherit another person’s credit history - whether good or bad. The best part? You don’t even need the card! Have your parent/spouse/friend shred the card while you still reap the benefit.
If all else fails, apply for a low-rewards card via the 'Cards' section at the top of the screen to begin building credit. While not the best rewards value, there are still considerable deals in the mid-tier category that will kick off your credit score improvement.
Part 4: Let The Fun Begin
Yes, that's right - it is points and miles time. Once your score is above 680, you are ready to apply for credit cards.
STEP 3: HOW TO APPLY FOR A CREDIT CARD
How To Apply For A Personal Or Business Credit Card Is Fairly Simple.
But there are still some things to be aware of. First, let's take stock of where we are. By now you are a member of multiple frequent-flyer programs and have a strong credit score. So from here earning points and miles while maintaining your credit score is your top priority.
While the credit cards on this website are automatically updated with new deals, the card or cards you ultimately decide on is entirely up to you. It depends on your financial situation and where in the world you’d like to go. But any card I recommend will fall into two categories: personal cards or business cards. Below are helpful hints for applying to each of them.
Personal Credit Cards
A personal credit card application will look something like the below:
As you can see a personal card is, well, personal. Besides the basic information (name, address, etc.) you will be asked questions specific to your financial situation. This is to determine the risk associated with lending you credit and it is important not to lie on your application – a small income will by no means prohibit you from being accepted.
To reiterate that point, I should mention that the primary focus of a personal credit card application is income. So let me be clear: you should not lie, but you also should include all sources of income before taxes, unless otherwise noted on the application.
Consider these questions before finalizing your income in the application:
- Do you receive other funds outside a traditional paycheck?
- Do your parents or others pay your rent?
- Have you regularly withdrawn from investments?
All of this type of income should be included, and many more.
Business Credit Cards
A business credit card application will look similar, but include something similar to the below:
Business card applications will have a slightly different look than personal cards. There will be a similar section asking about basic information, your financial situation, etc. Then there will be the section about your business. Whether your business is a restaurant chain with hundreds of employees or you swap items on eBay alone at home, you are eligible to receive a business credit card.
As an example, I write about earning points and miles and, since I am a "sole proprietorship," my business is my own name. Since I operate mostly out of my home/plane/hotel room, the business address is also my home address. You can see where this is going – my business phone number is my own cell, and so on and so forth.
I should note again that it is important not to lie on an application. There are thousands of reports of people being accepted for business credit cards with $1,000 or less in business revenue. So think hard and long about how you can create your own small business (or if one already exists, right under your nose). My first business credit card was for a business I had reselling tickets on eBay - that small.
Because every situation is unique, feel free to comment below if you are still unsure. But once you have a credit card in hand - and have activated it - the fun begins.
It is time to start earning points and miles.
STEP 4: MANAGING MULTIPLE CARDS & HITTING BONUS SPENDS
Managing Multiple Credit Cards Does Not Require Much Effort.
It does require you to be smart though. It may have taken you months or minutes to get to this point, which is essentially the starting line - ready to add tangible miles to your accounts. The next part seems simple: just spend as you normally would and fly for free, right?
While this is true for your first few cards, there are a few milestones you will meet between activating the card and booking your flight – these are summarized below.
Part 1: Managing Multiple Credit Cards
Before moving any further, it is worth mentioning that many banks require a certain time to pass in between applications. This means that you need to do some managing and research before moving on to your next card application (or in my case, card application #50 and #51).
What do I mean by this? Track your application details carefully. Different banks require different amounts of time between applications (even differing among the same bank's products), which means when you applied for, downgraded or closed an account is highly valuable information.
While this may sound intimidating initially, it is easy once you get into a rhythm you are comfortable with. I provide a TFG CardTracker tool, free to readers, that is useful if you like working with excel. If that seems a bit intense for you, just use the framework and write it by hand. What is important is that you do it - not that it's pretty.
Part 2: Hitting A Card Spend
Points and miles websites, like TFG, often refer to the “spends” of a certain a card. This refers to the amount you must spend on the card - usually in the first three to five months - in order to receive the bonus miles. In my experience spends range from $500 dollars to $2,000+ a month, so determine where your spending threshold lies. Bonus miles are the highest rate of return, so it is important to manage this process carefully.
First, when activating the card, double-check what the time period is to meet the spend. If you activate by phone, ask the customer service representative what your required spend is and by what date you need to spend it. This is important because some banks start the timeframe at card activation, some start on card approval, and still others by card shipment date.
Once you know the final date, I recommend placing a reminder somewhere, anywhere. A post-it, iPhone reminder, calendar event, etc., works - it really doesn’t matter where, as long as you know the date. I have had readers email me with horror stories of missing out on 50,000 airline miles because they messed up math and missed a spend by $100. The bonus offer is unforgiving - either you hit the spend or you don’t.
Finally, keep in mind that "hitting the spend" can often mean "paying it off" as well. As a best practice, I always try to pay off the spend in the required time frame - meaning don't just buy $3,000 worth of things; actually pay it off too. Once you hit the spend amount and pay it off, the miles will post in your account a few days after your billing cycle closes.
Part 3: After You Hit The Spend
After you hit the spend and pay off the balance on a card, you have three options:
Option 1: Keep the card
In this case, the only important detail to remember is that if you don't use it, you lose it. Banks periodically close unused accounts that have a balance of zero (or overpaid, so negative). This process is done behind closed doors and nobody knows the timing, but the general consensus is you must make a charge on a card every six months to avoid closures.
To remember this, I recommend making a reminder in your phone or calendar twice a year. This way, you are reminded automatically. My reminder is labeled "Card Day" and triggers in the morning twice a year. When I receive the reminder, I grab my "other" wallet - the one with credit cards I like to keep open but don't use for everyday spending - and make small charges throughout the day on each of them.
And voila, your credit cards with valuable credit history remain open. One last note on this: make sure to remember to pay off the charges that you make throughout the day. This is most easily done by having a good checking account with free bill pay and setting alerts on all your credit cards. Any balance will be emailed to you and you can pay it off that night.
Option 2: Downgrade the card
Most of the cards I recommend have an annual fee, yet my mission statement is to not incur additional expenses. You may be thinking, "What's the catch?" Here is where downgrading comes into play. Downgrading means to switch a credit card with an annual fee to a credit card without an annual fee. It is a little known secret not promoted by banks, but smart in many instances.
One catch is that downgrading must be between "similar type" products. Similar type means different things to different banks, but usually it means if you have a charge card (i.e. one you must pay off in full every month), it must be downgraded to a different charge card - and not a credit card. Other "similar type" definitions center on rewards types, like airlines or hotels.
If you are able to downgrade, I would wait until you have had the card for at least nine months. This maximizes the chances the bank waives the fee to keep you as a cardholder. Once you decide to do it, the process is as follows:
- Pay off the balance in full, ideally a month before you want to downgrade.
- Send a secure message to the bank or find your bank's phone number (full contact information is available in this post) and call with the card-in-question close by.
- Tell them your situation. It is completely okay to tell a bank representative that you feel the card is not worth the annual fee. They may insist that you keep the card or will even offer bonus miles and/or waived fees to retain you – once you have messaged them or are on the phone, it is up to you.
- If you do downgrade the card, remember to dispose of it. Cut the old card up into tiny pieces or use a shredder box, just to be safe.
The benefits to this practice are obvious: you get to keep the valuable credit history from the account without having to pay any annual fee. In 10, 20 or 30 years, your credit score could be anchored by long-lasting credit cards that you downgraded now.
The drawbacks are not as obvious, but very real. For example, many cards offer bonus miles on the card anniversary or maybe even a free hotel night. Downgrading the card would make you ineligible to receive the bonus, which could be worth far more than the annual fee. Ultimately it is up to you to decide what the card benefits are worth.
Option 3: Cancel the card
The first question everyone has with canceling a card is this: won’t it affect my credit score? Well, yes...and no. If you read through step two, you’ll see that big components of the score include the average age of accounts and credit card utilization, the latter of which depends on total credit available.
Canceling your oldest or largest credit line would negatively affect your score then, which I do not recommend doing. For new cards however, the affect is minimal – maybe two to three points and not permanent. For a full breakdown of why canceling a card doesn't have to hurt your score, read the TFG popular post on the topic.
Once you decide to cancel, the process will likely be similar to downgrading - depending on the bank. Again, all you have to do is send a "secure message" while logged into their online system asking to close the card. But three things to note before sending the message:
- Consider applying for another credit card at the same bank prior to canceling. Often you can use the existing credit line as a bargaining chip for approval of the new card.
- If the above does not work out, ask to move the existing credit line to another credit card you have with the bank. This will keep your total available credit as high as possible, enhancing your credit score.
- Pay off your balance in full, ideally a month before canceling. I would also make note of any pending charges or charges you may refund in the future (like an airline ticket you may change).
What may be different with downgrading vs canceling, however, is afterwards. While a different downgraded product will continue to show up in your online banking, often a closed card will not. So make sure to routinely check the mail for any outstanding payments you may have forgotten about. Any unpaid bill, as you now know, can severely impact your credit score and jeopardize all of your future points and miles.
Tellingly, this post is probably the most dense of the getting started guide. That is because managing multiple credit cards and making sure to hit card spends will be the bulk of your work moving forward. Once you get into a rhythm, this is incredibly easy to maintain. But it is important to get things right from the outset - make note of the dates, numbers, etc.
Once you have miles in your account and feel comfortable with your card management, it is finally time to redeem those miles for significantly cheaper travel.
STEP 5: REDEEM POINTS & MILES FOR CHEAP TRAVEL
Redeeming Points And Miles For Cheap Travel Is The Greatest Life Hack Available To You.
After redeeming over three million airline miles and hotel points, I truly believe that statement. And, finally, after many months of reading, signing up for programs, and applying for credit cards, you are ready for your trip.
As I outlined in the introduction to this guide, the first thing a mileage earner will tell you is to have travel goals. An ideal redemption would have been planned out far in advance; availability is better further out and once an airline locks in a scheduled flight, it very rarely cancels it - even if it often delays.
But let's just say you went the other route: accumulated as many miles as you could up front and now just want to go somewhere faraway in the world. Below are a few things you should know before booking.
Broadly speaking, airlines categorize their tickets into a few tiers. The lowest amount of miles will be considered a “saver” award – this will be less miles because there is a lower chance an airline will sell the seat at full cost. This is usually determined by when the flight leaves, in terms of day of departure (Wednesday afternoon is different than a Friday afternoon) or if the destination is in peak season (going to Australia in winter is less miles than in summer). The higher amounts will take into consideration the above, along with actual placement on the plane for business or first class awards.
Why this is important is you will have different options of where to go depending on your mileage balance. While I have already outlined the award charts for major airlines, you should check the airline websites to determine exact flight dates and award levels for your desired trip, ideally months in advance.
Flights within the U.S. are the easiest to book, albeit often the lowest value for your miles. Even after receiving hundreds of thousands of miles per year, I still buy most of my short-haul domestic flights and save my miles for first and business class international tickets.
But if you do want to redeem for domestic travel, each of the airline frequent-flyer programs are able to be redeemed online at their respective websites. As you will see, the airline’s customer service representatives on the phone will often help greatly in more complex flight arrangements – within the U.S. though, you can safely stick to the websites.
When booking any flight, including domestic, there will often be small fees. If you have a credit card that is cobranded with the airline you are flying (e.g. a Citibank AAdvantage card on an American flight), use that card to pay the fee. In doing so, you will still receive all the benefits from the card that they advertise – things like priority boarding, free bags, etc. While they advertise these benefits for when “you pay the full fare of the ticket on your Citi card” you technically did, even if it was only a few bucks.
Also, this largely depends on preference but I discourage using miles to fly business or first class domestically. I have several reasons for this, but mainly it is because the flights usually aren’t as long and U.S. airlines can pale in comparison to international carriers.
Simply put, if you are going to do first class, do it on something like Etihad's A380, Emirates or Singapore Airlines. These airlines offer private beds, incredible meals and even showers on certain planes - this is a level of luxury that U.S. airlines don't yet match.
International flights are often much, much more complex. For a round-trip international flight there can be legs with two stops - taking more than just several hours to get there.
While calling in is the best way to book a complex itinerary, that doesn’t mean you shouldn’t be prepared. For example, if you want to add a stopover in London on your way to Berlin, you should have flight options pulled up on your screen prior to calling. While the phone rep will be able to actually book the ticket, you should not expect them to add ideas to your trip.
Earlier in this post I eluded to non-U.S. airlines, specifically mentioning Etihad, Emirates and Singapore Airlines. The reason for this is that airlines around the globe are partnered so that frequent flyer miles in one program can book a flight on a different carrier.
This is important because since each of the major U.S. airlines I recommend signing up for is part of a global alliance, often available award flights are not shown on the U.S. airline’s website. While there are several fee-based tools an individual can use to see availability online, I recommend a simpler approach - just call the U.S. airline and ask.
Airline representatives have access to a broader scope of flights and can book complex itineraries that aren’t shown online. A list of airline’s phone numbers is available here.
One more note on partner airlines: where miles can be used and transferred to is constantly changing. While I write about as many topics as I can, this is by no means exhaustive. The best way to see if your miles work is to a) comment below and ask, b) call the airline and ask, or c) google it for more information.
And just like that, you're ready for significantly cheaper and enhanced travel. I have included some other helpful posts below if you are hungry for more. If not, good luck, happy earning and safe travels.
Please check in from time to time and post experiences - I'd love to hear them.