Our trip to Portland was free with airlines miles (or course)
With my boring introductory post out-of-the-way, it’s time to start explaining how you too can start collecting your own set of points/miles and redeem them for experiences of your own! Over the next few posts I will lay out my thoughts on how almost anyone can implement a strategy to collect hundreds of thousands of points, and then redeem them on an exciting travel experience.
But first…
Lets start with the basics. How do you collect all these points, and how do you collect a lot of them?
- Sign up for Airline and Hotel loyalty programs
Most people who have flown likely already have some frequent flyer miles with 1 or 2 airlines, but they don’t know how many, and they don’t have nearly enough to use for anything.
Even fewer people are actually members of a hotel loyalty programs, yet these programs offer their members a lot of great perks like free nights, upgrades, and additional benefits.If you happen to travel a lot for work, then you can rack up a serious amount of points just by taking advantage of these programs on your paid flights and stays. - However for most people, by far the quickest way to rack up a serious amount of points is to sign up for credit cards with big introductory bonuses. Chase, Citibank, American Express and a few other banks have a large number of different credit cards which one can apply for which have signup bonuses of 30, 40, 50, or even 100 thousand points or miles! Typically, these cards require you to spend a certain amount of money over a certain period of time. For example, a card might give you a 50k bonus for spending $2,500 in the first 3 months the account is open.
My goal is to teach you how to leverage your good credit by applying for multiple different credit cards with great intro bonuses, thus quickly generating hundreds of thousands of points to redeem on flights and hotels. However, there are a few caveats to mention before you decide to jump into this:
- Only sign up for credit cards if you are able and willing to pay back the balances in full every month!! If you are the type of person that carries a balance on your credit cards, you are unfortunately going to spend more money in interest over time then the value you get from these bonuses, and thus you should probably be cutting up your existing cards rather than be signing up for new ones.
- Signing up for credit cards will usually temporarily lower your credit score, typically about 3-7 points per application. As I will explain later, in the long run this is not a big deal, but it is important to be aware of your credit score before you sign up for a bunch of cards. If you are planning to purchase a house in the next couple years you may also not want to go overboard on signing up for cards, since your credit score will affect the interest rate the bank will be willing to let you borrow at (however note that if your score is better than about 740, you are already an excellent credit risk and there typically won’t be any difference in rate for a 750 or a 780 credit score).
With this information in mind, before I detail the strategies of which cards to sign up for a why, I recommend that you take the following steps to prepare yourself for signing up for multiple cards.
You’ll want to make sure that your credit is good enough for you to be able to apply and be accepted for multiple credit cards.
“Check out your credit scores using a couple credit proxy sites”
There are 3 credit bureaus (Equifax, Experian, TransUnion) which track your credit. When you want credit of any sort, such as a new credit card or a home or car loan, the institution will request a credit report from one or more of the bureaus. The bureaus track all your credit related activities and each generates a credit score (called your FICO score) that gives lenders an idea of your credit risk. Each bureau’s score is slightly different, but generally a score over 740 is excellent and banks will usually give you the best rates if you are above that. For credit card signup purposes, a score over 700 will generally be enough to get approved for most cards. You’ll want to take at least the first of the two steps I lay out get a good idea of your credit score:
- Sign up for the two following services; CreditKarma and Credit Sesame
. These services allow you to track your FAKO score (it’s not exactly your FICO score, but it’s very close and gives you a good idea of your real score). CreditKarma uses data from your TransUnion report, while Credit Sesame
- If your scores are above 740, you are in great shape! Even if they are a bit lower but still above 700, that’s fine. If they end up being below 700, then you’ll want to take a look at your actual credit reports to see if there is something in one or more of them that you didn’t know about. Get your yearly free credit report from each bureau by going to this site. You can use this site to pull your reports for free once a year. The companies will try to sell you your credit score, but you already know how to get a proxy of it for free! You can also find out how to improve your score here.
Once you’ve figured out your credit score range, you’ll want to organize yourself so that you know which loyalty programs you have points with already.
- Figure out what loyalty programs you are already signed up for currently, as well as the amount of miles/points you have accrued with them.
- There are different programs which allow you to view your balances in one place. The one I use is Awardwallet. (clicking this and other links in this email will take you straight to those sites) This site allows you to input all your creditcard/airline/hotel programs and see the balances in one place. It is free to use, but if you pay $5 for 6 months you can also see when your miles expire (if ever). If any miles are close to expiration, you can extend the expiration date by doing any kind of transaction, such as redeeming miles or earning more. Awardwallet and any other similar program will need your username and password info for each program, so if you aren’t comfortable putting them into a 3rd party site, then you won’t be interested in this.
Once you’ve completed these two steps, you’ll be ready to move on to learning about which cards to apply for. You’ll find this in my next post! If you have any questions or comments about the information above, please feel free to ask.
Nice post Aurelien. When you write “by far the quickest way to rack up a serious amount of points is to sign up for credit cards with big introductory bonuses”, are you suggesting to sign up for many of these cards all at once (after having made sure you credit score won’t be affected too much) or do are you suggesting having a plan of spreading this process out over several weeks or months (e.g. sign up for a card every week until there are no more, or every month)?
This is my question too! How do I know how many I should be applying for at one given time? (in a period of 3, 6, 9, 12 months.)
Hi Jon,
It really depends on a couple factors; namely your current credit score, your typical monthly spend on credit cards, and your willingness to sign up for many cards.
Personally, I had very good credit and was willing to get and manage a lot of cards. Thus I would typically apply for 1-2 cards every couple months as I met my spending requirements to get the bonus.
This is quite aggressive and I wouldn’t suggest this to start off with, but it gives you an idea of what is possible.
Start off with one or two cards and build from there as you get comfortable.