As I write, I’m flying over Wyoming on my way to Kansas City, Missouri. I’ll be there for approximately fourteen hours, just long enough to watch the Invicta FC 8 Women’s MMA fight and then get some sleep. Such opulence! To fly across the country just to go to a sporting event.
The truth, though, is that this flight isn’t costing me anything. In fact, other than crazy deals I’ve come across, I haven’t paid for a flight in quite a while. In a year exactly, I’ve racked up 750,000 frequent flyer miles. That’s enough for 30 domestic round trips or 8-20 international trips.
There’s a hustle going on that isn’t exactly underground, but isn’t quite mainstream either, that allows you to build up huge stores of frequent flyer miles very quickly.
In order to entice you to sign up for their credit cards, credit card companies offer huge sign-up bonuses of frequent flier miles. Some of these miles are airline specific, some can be converted to a few different airlines, and others are used as cash to offset travel expenses.
In order to receive the bonus you must be approved for the card and then spend a certain amount on it in a given time frame. A typical offer might be that you’ll receive 30,000 miles when you spend $3000 in three months.
If you do the math on that deal, which would represent a mediocre offering, you’re getting 33,000 miles for spending $3000, because you also receive one mile per dollar spent, generally. Depending on the program, miles are typically worth 1-2 cents per mile. Taking an average value of 1.5 cents, that means you’re getting $495 in value back from this deal. That’s 16.5% in value back on your spend.
If you’re new, you’ll be getting much better deals like 25,000 miles for any purchase, 50,000 miles for $2000 spend, etc., meaning that in your first year you can get back 20-30% of all money spent on a credit card in travel value. Even for a relatively low-spender like myself, this represents a huge annual travel budget.
After a year of doing this, dozens of free flights, and twenty plus credit cards, I’ve got a bunch of tips to help you maximize.
Some cards, like the Southwest cards, fluctuate between a low bonus level and a high bonus level. The low bonus for Southwest is 30,000 and the high is 50,000. Unless you desperately need those miles immediately, wait for the high bonus.
Southwest should be your bread and butter for domestic, since they offer a good value and can’t be used internationally. You can also cancel and reschedule award tickets for free on Southwest, so I constantly book several in advance that I may or may not take, and then cancel once I decide. So when I visit my family for the holidays, I book one flight that leaves Boston and another that leaves New York later, so that I can decide what I want to do as the time approaches.
For international, focus on American and United. American has the best rates, especially off-peak (40k round trip to South America or Europe, 50k to Asia), but United has the best availability. Both of these carriers allow one-way bookings, meaning that you can combine one leg of each if that gives you the best price or schedule.
Because American and United are so good internationally, you should never use them domestically.
Delta miles are pretty easy to earn, so I keep them as my first line of defense. If I catch a miracle and find a Delta award flight that’s available, I’ll happily book it before using my most precious miles. They don’t allow one-ways, but that will change on January 1, 2015.
Chase Ultimate Rewards points are also fantastic to hoard, because they can be used on either United or Southwest at a 1:1 ratio. Southwest very frequently has round trip tickets for 10-15,000 miles, so Chase points can be used there domestically, or on United for international. Chase points can also be used effectively on Amtrak. I used 1500 to save a $41 train fee this week.
Barclay Arrival and CapitalOne Venture cards each give approximately $400 that can be used to erase any travel charge, whether it’s airfare, hotel, or cruise. These are less common, so I save them for cruises, which can’t be comped any other way that I’m aware of. US Bank Flexperks is also cash value, but it’s extremely difficult to use and can only work with expensive flights.
Beyond those major categories, there are all sorts of smaller airlines and programs that are worth getting. Almost every program has some sweet spot (Avios, for example, is great for short-hauls in Europe), so any time there’s a good bonus, it’s worth signing up.
Once you start the credit card hustle, you want all of your spending to go through credit cards for which you’re getting a bonus. As soon as you finish spending, switch to the next one. I generally apply 3 weeks before I think I’m about to finish a spend to make sure that the next card is ready to go.
Don’t be afraid of annual fees. Some are as high as $450, but those offer benefits beyond the bonuses. I paid a $450 annual fee for an American card, but I got 100,000 points, Admiral’s Club access, and a $200 statement credit. That’s a great value.
Pick one credit card that has a good earning rate on your favorite airline (mine is American), and use that for all of your regular monthly fees. At first I tried to switch them all every time I god a new card, but this was a big hassle and resulted in me having to monitor old cards for new charges.
You can keep a spreadsheet, or you can just do one card at a time, mentally keeping track of roughly how much spend you have left. This whole process will seem like a big hassle for the first card or two you do, but eventually it becomes second nature.
Once your annual fee comes due, call to cancel. Half the time they’ll waive the fee or give you enough miles to make it worth paying another year. Sometimes you cancel. Generally six months later you can reapply and do the same card again.
Many people worry that this will destroy their credit, but it actually improves it every time. In the short term you’ll drop a few points due to the inquiries, but eventually the low utilization rates and high number of accounts counteracts that. My score went from a 690 to a 790 in the first year I did it. You can monitor your score for free at creditkarma.com.
The best sites to find these deals are The Points Guy and the credit card forums on FlyerTalk.
Within just a few months of beginning this process, you’ll have enough miles to start taking free trips. After six months you won’t be spending money on flights anymore. And a year in, you’ll have so many points that you take trips you wouldn’t have otherwise been able to justify, like the one I’m on right now.
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Photo is a World War 1 biplane.
Heading to Japan by ship this Friday. Can’t wait to be at sea again. It’s been 18 months since I’ve been to Japan, too.
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