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The Basics of Earning Miles and Points

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Now that you know what Travel Hacking is, let's get into the basics of earning Miles and Points.

The Basics of Earning Miles & Points | Caroline Made This
Azenhas do Mar, Portugal

 

Managing Credit Cards in the Points Game

A word to the wise:

  • If you don't pay off your balance every month, the points game isn't for you. The interest you pay in carrying a balance, far outweighs the benefits of any points or rewards you may earn.
  • Typically, you need a credit score higher than 730 to begin the points game. Don't have a good credit score? Follow these tips from my pal, Alexander at ThePointsofLife.com.
  • It's a myth that applying for multiple credit cards negatively affects your credit score long-term. While your credit score takes a 2-3 point hit when inquiries are made as you apply for a credit card, your score actually increases more as your debt-to-credit ratio improves with each approved application. (Psst. You want a low debt-to-credit ratio.)
  • Many credit card churners recommend only applying for credit cards every 90 days.
  • If you are applying for more than one credit card, do it on the same day so there aren't multiple inquiries on your report from the previous 90 days (see above.)
  • Do only what you feel comfortable with and how you think you can manage it for you and your family.

 

Meeting the Minimum Spend on Credit Cards

Most credit cards require that you meet a minimum spend in order to get your reward of miles or points. When I'm trying to meet a minimum spend I tend to use that card for everything I normally spend money on. I hit “hold” on my normal points credit cards and use only that particular card I'm trying to meet the minimum spend on until I hit it. You have to be diligent and organized about it.

You'd be surprised at how quickly your normal spend adds up. Think of all the things you pay for that are “major” expenses.

  1. Car/Home insurance
  2. Health insurance
  3. Rent/Mortgage
  4. Car Payments
  5. Student Loans
  6. Gas
  7. Utilities

Most of those items can be paid with a credit card and if not, there's usually a service that will allow you to pay with a credit card for a fee. The fees need to financially make sense. If you're spending $40-50 in fees to meet a minimum spend for not a lot of points, it's silly. Again, do what makes you feel comfortable.

Very often, I pay our rent over the course of 2 months and easily meet the minimum spend on credit cards. (I guess there's a benefit to high rent in South Florida?)

Services to pay your bills:

ChargeSmart (I’ve used this)

William Paid (I’ve used this)

RentShare (I’ve used this)

RentMoola

Now some naysayers will proclaim that paying those fees isn't worth it, but I would disagree because a plane ticket that only cost me $40 in fees to meet minimum spend that earn points for a plane ticket, is worth it to me. It may not be to you, and that's okay! Again, this is something churners do to meet minimum spending. I don’t use these services unless I’m trying to meet a minimum spend.

If you’re saving up for a big purchase, do it strategically. For instance, we desperately need a new mattress. I won’t be buying one unless it goes towards meeting the minimum spend on a credit card. I mean, why not? It’s just all about piecing together a good spending strategy so you can travel more!

A note about manufactured spending: I cannot offer advice in this area yet as I haven’t done it. But plenty of travel aficionados do and can offer you advice if that’s something you’re interested in. Basically, you move money around on gift cards or prepaid credit cards and use various online services to meet your minimum spending. It’s not something I’ve dipped my toes into yet — I simply meet minimum spend with our normal spending.

 

Programs You'll Benefit From:

Ideally, you'll have a some low-level points in a few programs and have an idea of which direction you'd like to accumulate more points. If not, never fear, I have some advice. I will go into specific brands and their benefits in my next post, next week.

Airlines

Take a look at your closest airport and see which airline has a hub there. You'll benefit from having lots of choices for flights. Of course, this isn't necessary. Especially if you fly a lot internationally. The hubster and I had most of our points with Delta (because Detroit was a hub and we used to live there) but we now live in Fort Lauderdale. We still manage to nearly always fly Delta. That said, a smarter move may be to put some points towards American, which has a hub in Miami, so course, I have.

Hotels

If you're not a business traveler, hotels can be tough for earning points by stays and while I haven't traveled specifically for work in years (sad face), I still put points towards brands I've liked and used in the past. Do you have a hotel that you're dreaming of staying at or perhaps a family vacation with a great family friendly resort? Put your points towards those brands.

Misc.

I can't claim to know a lot about the “other” category that points may fall in – car rentals, gift cards, cash back. My allegiance is to Avis simply  because my old work account is through them and I have status. In general, gift cards and cash back are a poor use for your points. Why? Because if you use 25,000 points to cash out for $250, you could have easily used those points for a round trip domestic ticket that cost over $250. You picking up what I'm putting down? Don't cash out simply because it's easier— I'm here to help make this second nature.

Like watching your life move in slow motion as your husband goes to use a non-points earning credit card to pay for gas when your Chase Ink gets you 2x the points at gas stations.

Noooooooooooo!

 

Points/Miles Earning Credit Cards in my Arsenal:

Holy shit, Caroline. That's a lot. Yes, but as anyone in the points game knows, I only keep and use a handful in my wallet regularly. I will close accounts that aren’t useful to us in the future or if their fee isn’t worth the price to keep it. I wish I had known more about this a decade ago. You know, when I applied for credit cards only because they had the cool transparent plastic?

Like I mentioned in my last post, I've really only been doing this since our honeymoon almost a year and a half ago. My guest post pal, Kiki, uses the points strategy too for her and her wife to fly around the world.

You can accumulate points quickly, even enough for your Southeast Asia adventure in July to be nearly paid for:

To Hanoi, Vietnam: Business Class on Korean Airlines: 70,000 miles

To Yangon, Myanmar: Coach on Vietnam Airlines: 22,500 miles

To Seoul, South Korea: Coach on Asiana Airlines:17,500 miles

To Atlanta, Georgia: First Class on Delta: 90,000 miles

Hotel in Hanoi (3 nights): Hilton Garden Inn: 30,000 points

Hotel in Seoul, South Korea (2 nights): Intercontinental COEX: 70,000 points

The rest of the hotels or flights will be paid for (on credit cards to earn 2x the points for travel) because they are so cheap it's not worth it to use points. But obviously, if your end goal is to not spend a dime on an airline ticket or hotel, you can surely do that!

 

Do What's Comfortable for You

It's really easy to get caught up in this points strategy game and apply for everything all at once or feel the need to get that big rewards credit card that was just announced. Don't. Do what's best for you and your family.

As an example, on my last round of applications, I applied for 2 cards. If you follow any of the bloggers I mentioned in my last post, you'll see that they apply for lots all at once. The newest, hottest card out right now is the Citi Prestige. I was really hesitant to apply for the new Citi Prestige because the fee is $450 a year. For most people, it could end up being a great card because you get airline lounge access and a $250 credit towards travel charges. For me, and in our current medical school, not traveling as much as we'd want to situation, it just didn't make sense. So I applied for 2 cards I know we can use in the immediate future: the Amex Hilton HHonors Surpass (we love the Hiltons by the beach here for a quick staycation) and the United MileagePlus Explorer card which prevents our United miles from expiring as long as we hold the card. Plus, we use the points mainly for shorter flights on international carriers.

In my next post, I'll show you which cards I recommend and how you can use them to get the most points for your hard-earned money. Sound good?

Any questions?

 

Interested in more travel hacking posts?
Start here: What is Travel Hacking?

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