What is the key to traveling around the world, staying in the most luxurious hotels, and having premium flights? There are two answers to that question, one being money. Unfortunately, the majority of people would not be able to afford that manner of travel. Another option is using points and miles to travel, which is definitely more accessible. Most people think that you need to be a frequent flyer, whether it’s for your job or personal travel, to have points and miles, but that is not true (it does help). You can earn thousands and thousands of points every year without spending any more than you normally would. The answer is using a credit card for high sign up bonuses, maximized spending categories, and other travel rewards.
CAUTION: DO NOT PROCEED IF YOU CANNOT BE RESPONSIBLE WITH A CREDIT CARD
If you are going to use a credit card for purchases that you would not otherwise buy with cash or debit, then it is not worth it. If you are planning on carrying a balance, then it is not worth it. If you plan on doing anything besides spending responsibly and paying IN FULL every month, then it is not worth it. As long as you are smart, then it is most definitely worth it.
The first thing I do when I want to analyze what credit cards would be good for a particular individual is look at where that person spends money. If someone primarily spends money on dining, then I would recommend a restaurant spending bonus card, or, if he/she travels a lot, then different travel bonus oriented cards. That way, when a person spends money where he or she would already be spending, he/she is earning even more points. Depending on the individual’s top spending categories, I would try to make sure that person is making at least three or four percent back. As a rule of thumb, if you are earning less than two percent back on a purchase, you are making a mistake. Sign up bonuses for a card are nice, but they are a one time occurance. Building up points year after year is dependant on elevated spending categories. For example, the American Express Platinum Card can have up to a 100,000 point sign up bonus. That bonus is a once in a lifetime occurrence as stated in American Express’s rules, so if you want to continue to earn as many points as possible, getting 1x points on purchases will not help nearly as much as the elevated 5x points on different categories.
That said, sign up bonuses are definitely very important for earning points. Many sign up bonuses earn tens of thousands of points, with some cards well over a hundred thousand points. Sign up bonuses alone can be worth thousands of dollars in points, and, if maximized on premium airfare, could potentially be worth tens of thousands of dollars. When you apply for a card and get approved, you can get the sign up bonus for that card after spending the required amount in the time period allotted. Most of the time you have to spend anywhere from $1,000 to $5,000 in the first 90 days. However, pay attention to the sign up bonus, because some cards may give more or less time and may even require spending tens of thousands of dollars on select business credit cards. Just a reminder: when you are trying to meet the spending threshold, do NOT spend money that you would not already be spending or else you are going to lose money.
When you apply for a credit card, make sure to verify that you are applying through a link with the sign up bonus that you want. I have heard horror stories of people seeing an elevated sign up bonus, let’s say 100,000 points over the normal 75,000 points, and they have clicked on the wrong link to apply. Once you have realized that only the 75,000 points have been posted to your account, it is too late. You will never get those points back, and that is enough points for a round trip domestic ticket. Sign up bonuses are without a doubt the quickest way to accumulate thousands of miles.
Just to give you a picture of how valuable sign up bonuses and credit card spending can be, I’ll give you an example. Let’s say you have a low annual fee Chase Trifecta, consisting of three of their cards that work together to maximize earnings. You have the Chase Freedom, Chase Freedom Unlimited, and the Chase Sapphire Preferred (not to be confused with the Reserve). The overall annual fee for these cards would be $95 per year. On the Sapphire Preferred, you will be earning 2x points on all travel, which includes everything from Uber and public transportation to flights and hotels, as well as 2x points on dining. On rotating quarterly categories, such as Amazon or this quarter’s PayPal, Chase Pay, and department stores, you will be earning 5% cash back with the Chase Freedom, up to $1,500 per quarter. However, you can transfer the cash back to become 5x points, which is more valuable (note that PayPal purchases include many different stores including Starbucks). On all other purchases you could earn 1.5% cash back with the Chase Freedom Unlimited, which, once again, transfers to 1.5x points with the Sapphire Preferred.
Concerning the purchases you charge to your credit cards, let’s conservatively say that every year you spend $3,000 on dining, $2,000 on travel (including rideshare and public transport), and another $10,000 on miscellaneous spending (Amazon, bills, groceries, and anything else). If you manage to max out each of the quarterly bonuses with the Chase Freedom, then all together you will have earned 46,000 UR points for that year. Those points, when redeemed for travel, are worth a minimum of $575, but, to get an even better value for them, transfer to one of their partners. Those points would be just shy of allowing you to book at least two round trip free flights within the US with Southwest or United, two free nights at Hyatt Zilara Cancun (an all inclusive resort), and would come pretty close to allowing you to book a business class ticket to Europe (which can be worth thousands).
Additionally, if you factor in the Chase Sapphire Preffered’s 60,000 point sign up bonus, the Freedom and Freedom Unlimited’s current offers of $200, you will have an additional 100,000 UR points! It can easily be worth thousands, just for signing up for a couple of credit cards and meeting the minimum spend.
Overall, using a mix of lucrative sign up bonuses, as well as maximizing spending categories, can earn thousands and thousands of points every year without your even having to step foot on a paid flight. The possibilities of how you can use the points you earn for amazing trips are as limitless as your imagination. Have fun earning and burning your points :).
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