Deeper Dive into Travel Rewards

After I published an introduction into travel rewards credit cards last month, I’ve heard from friends and family who are curious to learn more. Haven’t read my earlier post? Go back to the basics here with “Dipping a Toe into Travel Rewards.”

So today, I’m sharing my strategy as a resource for folks in my life who want to join me on my free (!) travels or for anyone who hasn’t yet discovered the educational resources I find most valuable. As a reminder, travel rewards credit cards are for folks without credit card debt and who are paying off their credit cards in full each month.

Here’s my personal travel rewards journey to date:

• I had the same travel rewards credit card for ages. I thought it was great because I had no foreign transaction fees, and because there was a travel portal where I could get up to 3% cash back for booking. That travel portal was hacked and my data was likely stolen. I realized around that time that my card wasn’t that great and I was missing out on a lot of travel rewards opportunities.
  • In summary, Bank of America isn’t great, but you already knew that.

• I didn’t know much about travel rewards, but I applied for the Capital One Venture Card and received a $500 sign-up bonus (as of writing, this card waives its first year’s annual fee) after putting $3,000 of expenses on it in three months.
  • How I used the bonus: I went with the option that is basically cash back on the card. I spent it on regular monthly expenses.
  • How I avoided fees: I paid my card on time. As I approached one year with the card, I called Capital One to downgrade to the Venture One Card, which has no annual fee.

• I applied for the Chase Sapphire Preferred Card and received a 50,000 Chase Ultimate Rewards point sign-up bonus after putting $4,000 of expenses on it in three months (at the time, this card used to waive the first year’s annual fee).
  • How I will use the bonus: This is enough points to fly to Iceland or Italy. I haven’t decided where I’m going yet! I’ll likely log into the Chase portal to book, but I can also transfer the points to an airline partner like JetBlue, United, or British Airways.
  • How I will avoid fees: I paid my card on time and no longer use this card. As I approach one year with the card, I will call Chase to downgrade to the Chase Freedom Card, which has no annual fee.

• I applied for the Chase United Explorer Card and received a 40,000 United MileagePlus points sign-up bonus after putting $2,000 of expenses on it in three months (as of writing, this card waives its first year’s annual fee).
  • How I will use the bonus: This is enough points to fly to pretty much anywhere in Mexico. I’d love to visit Oaxaca and Mexico City.
  • How I will avoid fees: I will make one phone call to Chase to downgrade to another United card which has no annual fee.

• I’m next working toward Southwest Airlines’ Companion Pass and the 125,000 Rapid Rewards points it requires. I’ll achieve this by opening two Chase Southwest cards, one business and one personal, which each have a 60,000 point sign-up bonus and putting $5,000 total on the cards within three months in early 2020.
  • How I will use the bonuses and Companion Pass: Once I get the Companion Pass, I can travel using my points and someone else can travel with me nearly for free for the remainder of the year I get the pass and the entire following year! My hope is to visit Hawaii within the next two years. Let’s see if I can convince my family to come along with me (hey, I know you’re reading this)! I’d also love to visit some of the National Parks out west⁠—I especially love desert landscapes.
  • How I justify the fees: These two cards both have annual fees ($99 and $69 for the business and personal cards I selected) which are not waived for the first year. But if I fly even one time using points and the Companion Pass, I feel I will have covered these upfront costs.

So that’s that. To make this happen I did lot of research (not all of which is required, but I’ve been an overplanner all my life), filled out a few online applications, made a handful of phone calls, put a new credit card in my wallet every few months, and referenced back now and again to a spreadsheet I use to organize everything. As a result, I might have six or more free roundtrip flights on my horizon.

Was this helpful? If so, let me know and I can follow up with simplest strategies for you to get started yourself, with links to more resources and a copy of the spreadsheet I use so you can track your travel rewards credit cards.

Are you ready to get started with travel rewards? I highly recommend the Chase United Explorer Card, since it has no annual fee for the first year and a lower requirement to spend $2,000 within three months in order to receive the sign-up bonus. And because the rewards are airline points, it helps ensure you get more world wandering in your life! If you wish to apply for it you can consider doing so with my referral link here (full disclosure: I will receive some bonus points, a travel win-win! I think it’s a great opportunity for any responsible credit card user, but please first read up on the terms and conditions for yourself).

Dipping a Toe into Travel Rewards

Over the past year, I’ve begun researching and diving more into travel rewards. For the longest time, I understood that the purpose of frequent flyer mile programs was to reward people who fly all the time, always with the same airline. That’s true, but for people like me who typically fly just a handful of times per year and take whichever airline is cheapest, there’s more opportunity when responsibly (key word here!) playing the travel rewards credit card game to rack up miles and points.

Like most people of my demographic in the U.S., I pay for the majority of my expenses with a credit card. I thought I was doing it right by paying off my bill in full each month and using a card that gave me 1.5% or 2% cash back on all purchases. But when it comes to the cash back, there’s a lot more to explore. For example, if I were to open a new credit card like Capital One’s Venture Card, once I spent $3,000 I’d get a bonus of $500. That’s closer to 16% cash back! I’m not endorsing this credit card in particular, I just find its value very straightforward. Imagine the opportunity if you got a bonus like that multiple times per year.

There are dozens of blogs out there explaining the ins and outs of each credit card offer and how to get the most out of each opportunity. I’d estimate I spent upwards of 40 hours learning about the rules and finding the strategy that is right for me. I don’t recommend this for everyone, because you can check in with someone you trust who knows this stuff and ask them to help you.

If you’ve handled credit cards responsibly in the past, you might be interested to learn more and test the waters. Here are some high-level things to keep in mind:

1. Pay off your card in full. I can’t stress this enough. If you’re failing to make your payments on time, the benefits of credit card points will be canceled out by the interest you owe and your credit score will prevent you from taking advantage of rewards in the future.
2. Keep an eye on your credit score. For many people, opening a new credit card actually boosts their credit score. That’s because your utilization rate (or the amount of credit you use each month relative to your total credit available) will go down. But for a short period right after opening a new card, your credit score may fall by 5 or 7 points, which is not ideal if you’re about to take out a loan or a mortgage.
3. Consider non-airline and non-hotel cards. The cards I find most flexible are actually not linked to a particular airline or hotel brand. As someone who flies different airlines and avoids pricey chain hotels, the best deals for me are travel cards from brands like Capital One (Venture Card) and Chase (Sapphire Preferred).
4. Check out cards that waive their first year’s annual fee. As of this moment, the Capital One Venture Card and United Explorer Card waive their first year’s annual fee. After your first year, you can request a change to a different, no annual free credit card from that brand, without impacting your credit score.
5. Plan your spending. If you’re going to be making a big purchase soon, you might consider opening a new card.
6. Track your timing. Make a simple spreadsheet for yourself tracking the date you applied for a card, the date you were approved for the card, and the date by which you’ll need to reach the minimum spend for the card’s bonus.
7. Sign up for as many airline and hotel reward programs as you can. That way you won’t leave any opportunity on the table. You can use AwardWallet to monitor your many reward balances for free. When you sign up for rewards programs, you’ll learn of lot of extra points opportunities from their email lists. For example, my credit card is now linked to an airline’s cash-back dining program operated by Rewards Network. I ignore the promotional emails that prompt me to dine at particular restaurants in the Rewards Network, but once in a while I’ll see I earned an extra chunk of change back for paying with that linked credit card at a restaurant that was participating without my even realizing!
8. Refer friends. Besides opening new cards yourself, the best way to earn points is often to refer friends. I find that this isn’t super straightforward.

In the past year, credit card points have proven to be a much better investment of my time than pet sitting, couponing, or any other frugal tactic. The best part to me is that this value is set aside for the activity I love most, travel. I’m working toward a possible trip to Hawaii and I expect to be able to get myself and someone else there for free. I already have enough points across three programs to fly to Bolivia, Mexico, and Iceland. I hope that this will enable me to go on longer trips to more far-flung destinations, and to splurge on activities since I don’t have to worry as much about the cost of getting there.

Stay tuned to see if I get to these places and hold me accountable to spending all these hard-earned points!