Most of my friends know that I travel a lot. But I don’t actually spend tons of money on travel, because I very rarely pay anything close to full price on airfare. And I often get hotel stays free or at very low cost. How? I have gotten hooked on a little hobby (or game) that gets me to many of the places I want to go, in premium class cabins, for little money. I collect literally millions rewards points and miles so that I can use them to fly and stay around the world.
I get lots of questions about how? Why? What’s the best way? Etc. So, this blog is an evolving attempt to collect some of the info I’ve discovered over the years. All of the information I have acquired, and much more is easily available by reading various travel blogs that cover the subject in much more detail.
First, I don’t fly on paid tickets very often — so that’s not how I earn miles and points. Virtually all of my rewards come from either credit card sign up bonuses and/or strategic use of credit cards to pay my everyday expenses.
What are the benefits, realistically?
A good credit card signup offer will get you 50,000 or more miles in some frequent flier or hotel loyalty program, usually with no fee for the first year. That’s in addition to the 1 point per dollar that you actually use the card to spend (or more, depending on the card). The 50,000 bonus alone is usually enough to get you:
• Two domestic round trip coach tickets (25,000 miles each), or
• One round trip first class domestic ticket, or
• in most cases a one way business class ticket to Europe.
• Round trip coach tickets to Europe are about 40-70 thousand points, depending on the airline and the time of year.
Apply for 10-12 cards over the course of a year, and you should end up with half a million points
Sure, but we know there’s no free lunch. What does it cost?
Absolutely, there is a cost, but if you play correctly, it is low compared to the cost of buying tickets – especially if you want to go long distances, or want to get a business or first class ticket.
• Credit cards generally have annual fees — but in MANY cases, they are waived for the first year. So you get the card, get the points and then cancel the card before the fee is due.
• When you “redeem” the mileage (AKA — here is a mileage geek term of art: “burn the miles”), there will be some taxes and fees. The tickets are not completely free. The costs vary depending on the airline. As examples, I have a business class round trip to Asia using American miles, and the fee came to about $40. Some airlines have higher fees and taxes, and I have sometimes paid $75-$140 for a business class trip to Europe. There are some airlines to avoid in order to avoid the highest fees (British Airways, I’m looking at you). You can get all of the info, and more, on line.
HOW TO GET STARTED
I suggest you start slow to get used to the game, and see if you like it. Start with 1 to 3 applications, wait at least 3 months and see how things are going.
Suggested beginning strategy:
Important – where do you want to go? That will help you decide what cards you want to apply for.
Other factors to consider –
what is the minimum spend requirement for each card you are considering? Don’t sign up for more than you can plan on spending.
Are there any special limited time offers that are good? From time to time most of the cards have a special limited time offer that gives more points, or some other special deal that makes it worth considering that card. READ THE BLOGS to get this info.
Start by getting one card each from the three major banks (Chase, Citi, Amex)
Consider an American Airlines card from Citi
Definitely get a flexible points card (Chase Sapphire or an Amex card that gives you membership reward points, depending on who has the best offer)
If you really get into the “game”, you will be applying for a lot of credit cards. I average 10-12 applications a year. But it took me several years to get comfortable enough to do that. I really suggest starting with about 3 cards to see if you like it, if you want to take the time needed, etc.
OMG!! What About My Credit Score??
As long as you do it correctly, this will NOT adversely impact your credit score. In fact, when you play correctly, your score usually goes up. (mine has)
Remember how your credit score is calculated:
35% of your score — payment history (pay on time all the time, and this will be great) 30% of your score –your credit utilization (DON’T USE all the credit you have — keep your usage rate low to beef up your score) 15% of your score — your credit history 10% of your score –-the types of credit you use (banks prefer to see a variety, such as credit cards, mortgages, car payments — all made on time) 10% of your score–requests for new credit (This is the only place where applying for a lot of cards causes you to lose a few points. BUT, by getting more credit (and not actually using it all), your payment history and credit utilization rates will go up) As a result, many people (including myself) find that after a short period of time, your credit score rises even with multiple credit applications.
The key is to always always always make your payments on time, and keep your utilization rate low.
A week ago I returned from one of the best trips I’ve ever done – both in terms of total enjoyment, and in terms of most “bang for the buck” out of frequent flier miles.
I visited Europe and South Africa. I flew in business class on American, and on Qatar (amazing product, btw). I paid $177 in taxes and fees, and used 110,000 USAirways miles.
I flew a total of 25,158 miles — about 250 miles MORE than the circumference of the earth. And I did it in comfort in business class seats that convert to lie flat beds on all the longest legs (including a 15 1/2 hour flight from Doha, Qatar to Miami)
The bad news is that with the merger of USAirways and American, the USAirways Dividend Miles program no longer exists. That award to South Africa was a particular “Sweet spot” in the USAir program that has not carried over to American. So getting to South Africa now would cost more miles — 150,000 using an American Airlines award.
But this is still a great example of what is possible using frequent flier miles wisely.
Used wisely, credit cards – with their generous signup bonuses – are a practically magical way to boost your mileage/point balance. Sign up for a few well chosen cards, and you could be jetting to your dream destination sooner than you thought possible.
When I tell friends about this, I generally get two immediate questions. First: Doesn’t that ruin your credit rating?!? A logical, but incorrect assumption. I’ll cover that in a later post.
The second question, and the subject of this post is: But what about all those annual fees? A fair question, and a valid concern. If you have to pay hundreds of dollars in annual fees for premium credit cards, then the value of the travel rewards is greatly diminished.
The good news is that for many of the most popular travel rewards cards, the issuing bank waives the annual fee for the first year. So, in most cases, you can sign up for a card, get a sign up bonus of 30,000 to 50,000 miles (sometimes more), and not have to worry about an annual fee for a full year. In that time, you can use the miles and then decide later whether its worth it to you to pay the fee to keep the card. (sometimes it is, if the cost/benefit ratio works out in your favor. More on that is a future post.)
And more good news is that in many cases, if you ask nicely, you can get the annual fee waived the second year — or get a statement credit or some other reward that will make it worth keeping your card for another year.
The Magic of the Retention Bonus
The credit card companies like you and don’t want to lose your business. So, some of them (not all) will give you “gifts” for staying with them. The “gift” can be a waiver of the fee, or a statement credit, or extra bonus miles. You just need to find out what the offer is, and then decide whether it’s worth it to you.
Also, if you do a search on Flyertalk, you can usually find out in advance with the current retention offers are. Remember, like so much in this hobby, “Your Mileage May Vary” (YMMV), but it only takes a few minutes to see what the options are.
My Most Recent Example
I have an Citibank American Airlines Platinum Visa card that I’ve had about 5 years. The $95 annual fee will be due in September. I like the card, but I really don’t need it, because I now have 2 other Citi AA cards. But I was interested in keeping the old Visa open, since it’s one of my older points earning card, and having older cards helps a little with the credit score. So figured I’d call to cancel to see what kind of retention offer I got. And, it worked out nicely. Here’s what I got:
City wouldn’t waive the $95 fee — but they essentially made it free because they will give a $95 statement credit if I purchase at least $95 on the card in the next two months.
Then, I can get up to 16,000 bonus miles. For each month that I spend $1000 on the card, they will give me an extra 1000 miles – for the next 16 months. So that means if I have the potential of earning 2 miles per dollar, which is a great deal.
How To Get the Retention Offer
As I said, I usually first check Flyertalk, so that I know what the current best offers are. (And in some cases, there are numerous reports that a company is not making any offers – and then I don’t waste my time)
Call the customer service number of the back of the card, and politely tell the rep that you are calling to close the account. Politely and cheerfully explain that you like the card and the service, but can’t justify paying the annual fee. In most cases, the person will then send you to a “retention specialist.” Go through the same routine with that person – Yes, you like the card, and the service, but you don’t want to pay the annual fee. At that point, the retention specialist usually will tell you what a great customer you are, and how much they want you to stay with them, and he is authorized to make a special offer just to you, since you are so special. You find out what the offer is. You can say yes, or no, or I’ll think about it, or “do you have anything better?” Take the offer if you like, or think about it if you don’t like it.
In my experience, I usually get some kind of offer to keep the card the second year. It’s harder to get a retention offer the third year – especially if its on a card that I haven’t spent anything on (which is common). The success rate for getting retention offers varies depending on the bank, the card, how often you have used it, and who knows what else.
The key lesson is — you don’t necessarily have to drop a card just because the fee is coming due.
Yikes, my blog has been spammed! I told you this was the “beta” version. Each day as a rookie blogger is a learning experience. Today I learned that if you don’t set some filters on comments, you will open your blog to find 466 comments selling products or making non-sense statements that are clearly phishing attempts.
Guess I better start watching some of those training videos provided by Word Press.
If you collect Frequent Flier points carefully, and use them wisely, you can vacation most places in the world for about the same price as someplace close to home. How? By flying there for a very low cost.
Your Delta, American, or United miles may be nice to use for a trip to California. But its even more rewarding to use them on partner airlines to go to Barcelona, Buenos Aires, or Bali.
I will soon be on my way to Europe and South Africa. I’m flying in business class. I used 110,000 USAir Dividend Miles (no longer available, since USAir is now merged with American). In addition to using the miles, I paid a total of $127 in taxes and fees. I’ll fill in details of why I’m going, and how I got the points in posts over the next few days. (hint: credit cards)
Every great trip requires a balance of at least two things: 1) calculating and accruing the points or miles needed; and 2) planning for the best redemption. Many people are pretty good at building up point balances in various loyalty programs, but they don’t do as well on the redemption side of the equation.
My tip for today about redeeming miles or points for award reservations is: you need to be persistent if you are going to get the most value for your miles. If you go to the airline website, you may or may not find all the award availability that’s out there. You need to become familiar with the various award possibilities that are out there, and chose from the available products that best suit your needs.
Even after they are made, you need to be vigilant in monitoring your award reservations. Flight schedules change. Other stuff happens.
In my case, I made my initial reservation in January 2015. The routing from Europe to South Africa was: Barcelona to Madrid/ Madrid to Doha/ Doha to Johannesburg. I would have preferred a more direct Barcelona to Doha routing, but it wasn’t available in business class. Hence, the extra leg from Barcelona to Madrid.
I am not an elite member of any airline loyalty program (it’s hard to get elite status when you don’t actually pay for many tickets). So, in most cases, if I wanted to make a change to the reservation after it was ticketed, I would have had to pay a change fee of about $150. I hate paying fees.
But, as I said, flight changes happen. And when they do, there is often an opportunity to change your reservation without a fee. In May, I received a message that there was a change to my flight from DOH to JNB. It was departing 30 minutes earlier than originally scheduled. Uh-oh – that left 15 minutes to connect between flights. That’s not gonna work. An annoyance? yes. But also an opportunity. I was able to find availability on the more direct Barcelona to Doha flight, and was able to switch to that flight for no charge.
Sadly, no really great redemption is without it’s complications (and this is an extraordinary redemption). When I checked the confirmation of the change, I found that the USAir agent had booked me into economy class on the BCN-DOH leg. Achhh! I’m too old and too fat to fly in economy for 7 hours. I called back, but then there was no business class award availability from either BCN or MAD. In fact there was no availability in any class for more than a month around the time I needed to fly.
I was depressed. (Yes, first world problem.) I called and begged USAir to help. I e-mailed Qatar. Nothing to be done: Qatar was not releasing anything on the date needed. There didn’t seem to be any award of any kind on Qatar airlines from anywhere in Europe to Doha.
And it stayed that way for almost three months. Every few days, I checked availability (BTW, you can check availability for this and many other One World flights by checking on the British Airways web site). Every few days, the computer screen filled with the sad empty nothingness of Qatar award availability.
Until today. Suddenly, award availability was wide open. 4 business class seats on virtually every flight. One relatively quick call to USAir (well, American as they call themselves now), and I was moved up to the front of the plane.
According to a recent Facebook post (so you know it has to be true), Wild author Cheryl Strayed said that “it’s better to write a book that kind of sucks than to write no book at all, as you wait around to magically become Faulkner. No one is going to write your book for you..”
I believe the same can be said for a blog. This blog is my “book,” my journey, my stories about my travels, with some tips for others who may be interested in exploring more of the world.
In the beginning, I’m guessing it will kind of suck. It’s just the way things are when you are off on a new adventure that’s a bit out of your comfort zone. It will never be Faulkner – that’s not my goal, and he never blogged anyway. But if I can sometimes bring a smile, then it’s not a waste of time. And if it’s crappy – then blame Cheryl Strayed, because she’s the one that said to go ahead and embrace the mediocrity.