‘How do you afford to take all of these trips?’

The first question I’m always asked when people learn of all the trips I take is ‘How do you afford to take all of these trips?” The reality is I use miles and points to cover the largest portion of trips – air travel and hotel stays. Typically my out of pocket costs are just for activities and food. And food costs usually aren’t that high because I am able to leverage my hotel statuses for free breakfasts and lounge appetizers, drinks, and snacks.

By far the quickest and easiest way to earn points and miles is through credit card sign up bonuses. For instance, when the Chase Sapphire Reserve card debuted in 2016, it offered a 100,000 bonus points after spending $4,000 within the first three months of account opening. The American Express Platinum card also frequently has 100,000 point sign up bonuses and sometimes up to 250,000 points.

With just one of these 100,000 point sign up bonuses – you can easily take a week long trip to just about anywhere in the world while having your airfare and hotel stay covered.  I typically sign up for a new credit card with a good sign up bonus every three months or so (and so does my wife).  This gives us 500,000 to 1,000,000 points per year!

And don’t worry about the minimum spend requirement mentioned above. I’ll show how you how to meet these amounts even if your typical household budget is not that high.

‘But doesn’t that hurt your credit score?’

The second question I’m always asked is ‘Doesn’t that hurt your credit score?’ The simple answer is not only does it not hurt your credit score, but over the long run it will actually improve your credit score.  Here’s proof, I have 24 credit cards open.  My credit score in December was 840 (out of 850).  I opened two new credit cards in January and my score dipped a little but expect it to go back up next month.

Before we jump into earning miles and points and applying for our first credit card, I want you to take some time to get organized before we begin. Once you get going, you are going to have a LOT of accounts – credit card accounts, frequent flier airline accounts, hotel loyalty accounts, rental car company accounts, etc. Trust me, you will be glad you got organized before beginning.

Here are the five-six tools that I use to stay organized with my credit cards:

1. Empower has nothing to do with miles and points or travel hacking – it is a website (and app) to track your finances. You can add all of your accounts – including: checking, savings, loans (mortgage, auto, school, etc), credit cards, home value, 401K, IRAs, etc and it is free.  Since the quickest and easiest way to earn lots of miles and points is by signing up for new credit cards every 3 months, this helps you keep track of them all in one place.  Use this link to get a free $20 Amazon gift card for signing up for a free account.
2. Monarch Money – Empower is free and very very good, but being a personal finance nerd I need something a little more powerful and have being using Monarch Money which I really really love.  Use this link for a free extended 30 day trial .
3. Award Wallet – tracks all of your reward programs – airline miles, hotel points, credit card points, etc. It currently can track 678 loyalty programs. One very nice feature that I love is that I can add my wife and children’s accounts to mine all under one user-id (no multiple logins needed for each person). Currently I am tracking 133 different household accounts that have just about 10 million miles and points.  It’s well worth the cost for the pro version once you outgrow the free version.  Use this code ‘free-qldoxw’ when signing up for a free upgrade to the pro version.
4. Password App –  another other tool I use is a password manager, with the hundreds of different accounts I have to keep track of it would be impossible to try to remember all of the user names and passwords. I used to use LastPass but switched over to bitwarden after LastPass limited the free part to either a mobile device or a browser extension (not both).  I’ve been very happy with bitwarden so far.  The other major password applications are Dashlane and 1Password. I’m also liking Apple’s iOS passwords app.  
5. Google Docs Spreadsheet – to track all of the credit cards that I have signed up with – I created a simple Google Documents spreadsheet – which lists what the card is, when I applied, when I was approved, when the card was activated, what the sign up bonus is, how much I need to spend to get the signup bonus, etc. Click here to download a copy of my spreadsheet.
6. Credit/Loyalty Card Holder Case – Some people just use a rubber band, but being an organizer, I had to find something better than a stack of 24 credit cards held together by a rubber band.  I found this Boshiho leather credit card holder on Amazon that has been working great – it’s almost 10 years old now and held up pretty well.

such I know you are anxious to start earning miles and points, but first we need to discuss all of the different types of miles and points. All are not created equal and some are much better than others.

This was a mistake I first made – just applying for random credit cards that had a lousy $100 sign up bonus – it was a big mistake. You should get at least $500 in value from a credit card sign up bonus. I’ve regularly get $2000+ in value from just one credit card sign up bonus.

Let’s go over all of the different types available now

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Airline Miles

Airline miles are probably the most common type of reward that most people have at least heard of. They are also sometimes called frequent flier miles and are part of a loyalty program offered by airlines. Just about every single airline has a loyalty program. The loyalty programs are free to join.

Once you earn enough miles, you can redeem those miles for a free flight. There are numerous ways to earn airline miles, most of which don’t actually involve flying on the airline itself. So in addition to earning miles by actually flying, the best ways to earn airline miles is through co-branded airline credit cards.

A few examples of co-branded airline cards:

• Chase Southwest credit cards
• Barclay’s JetBlue Card
• Citi’s American Airlines AAdvantage Platinum Select
• Chase United MileagePlus Explorer Card
• American Express Delta cards (multiple)

Co-branded credit cards also offer additional perks such as double miles on tickets purchased from that airline, priority boarding, free first checked bag, etc. There is also typically an annual fee for most if not all of these co-branded credit cards but it is sometimes waived the first year

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Hotel Points

Hotel points are just the same as airline miles but instead of earning miles, you earn hotel points. Hotels also have loyalty programs that are free to join to accumulate these points.

Once you earn enough hotel points you can redeem those points for a free night at the hotel chain. Earning hotel points happens just like airline miles but instead of flying, you earn points for staying at the hotel chain. Hotels also have co-branded credit cards also, here are a few:

• Chase World of Hyatt
• Chase IHG Rewards Club
• American Express Hilton Honors Aspire

Just like airline co-branded credit cards that offer additional perks so do hotel co-branded credit cards – typically a free night certificate on your credit card anniversary, late checkout benefit, etc

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Cash

Cash back credit cards are pretty easy to understand also – typically you will receive 1%, 1.5%, 2% or more cash back on purchases made. There are a few credit cards that claim to provide miles for purchases, but when you dig into the programs, you redeem miles for cash or credits on travel purchases you make.

Here are a few examples:

• Citi Double Cash (1% cash back on purchases + 1% when you make a payment = 2% total)
• Discover It Miles Card (even though you earn 1.5X miles on purchases, 100 miles are worth $1.00 cash or travel credit
• Fidelity Rewards Visa (2% cash back into a Fidelity account, I use their ‘Fidelity Cash Management Account’ as my main checking account)

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Flexible Reward Programs

Now for my favorite type – flexible reward programs. These five programs offer multiple ways to use points.

1. Chase Ultimate Rewards

Points are not tied to any specific airline or hotel. Points can be used to book travel through Chase Travel Center at a fixed redemption. You can also redeem points for cash back, gift cards, and merchandise but these are a bad idea since the redemption rate is so much lower.

The best part of flexible currencies is the ability to transfer points to airline and hotel partners. This is where you get outstanding value.

Link to Chase’s airline and hotel transfer parters

I like Chase Ultimate Rewards best because they are very easy to earn (there are lots of Chase credit cards that earn Ultimate Rewards) and tranfer to Hyatt which is my favorite transfer partner.  The vast majority of my Ultimate Reward points gets transferred to Hyatt. Air Canada Aeroplan is also a good airline transfer partner to use on Star Alliance airlines (including United flights).

One key item to note is not all Chase Ultimate Reward credit cards are able to transfer to travel partners.  Typically the no annual fee cards (such as Freedom Flex, Business Cash, etc) can’t transfer to airline and hotel partners, that’s why I keep the $95/year Chase Sapphire Preferred which can.  You can easily move points earned from your Freedom Flex card to Sapphire Preferred.

Chase Ultimate Rewards can also be freely moved from one account to another household member’s account – so husband and wife can easily combine points.

 

2. American Express Membership Rewards

As the same with Chase Ultimate Rewards, points are not tied to any specific airline or hotel. Points can be used to book travel through American Express’s Travel Center at a fixed redemption. You can also redeem points for cash back, gift cards, and merchandise but again these are a bad idea since the redemption rate is so much lower.

Link to American Express’s airline and hotel transfer partners.

American Express’s Membership Rewards are my second favorite flexible point program. There are lots of transfer partners to choose from. 

There are also multiple credit cards that offer Membership Reward points so they are also really easy to earn.

It’s a little harder to combine household points – Amex requires the person to be an authorized user on the credit card in order to combine points.

Unlike Chase, Amex has a no annual fee cards that allow transfers to travel partners.  This is why I’ll always keep the no annual fee Amex Blue Business Plus credit card.  It keeps all of my Amex Membership Rewards points earned from any card alive.

 

3. Capital One Miles

Previously Capital One miles were a ‘cash’ point. Remember the Jennifer Garner commercials where you could redeem Capital One miles for any flight at any time with no blackout dates? That’s because Capital One miles were worth 1 cent per mile value – a $1000 flight would cost 100,000 miles.

But that has all changed now in 2019.  You can still redeem Capital One miles for 1 cent per mile value through the Capital One travel portal or redeem for gift cards or travel purchase credits, but now they offer airline and hotel transfer partners.

Link to Capital One’s airline and hotel transfer partners.

Capital One Miles are easily transferred between your credit card accounts and also to anyone else for free.

Capital One has good transfer partners with lots of different sweet spots.  While not as easy to earn large amounts of miles like Chase and Amex, you can still quickly earn lots of miles.  Capital One credit cards are a little harder to get approved for too.

 

4. Bilt Reward Points

Bilt is the newest Reward Point that has transfer partners.  Unfortunately there is only one Bilt credit card (issued by Wells Fargo) so it will be hard to a huge amount of points.  But it has no annual fee and earns points by allowing you to pay rent, HOA fees, and mortages (coming soon) with no fee.

Bilt also has my favorite transfer partner – Hyatt!

You can also earn Bilt points by referring others, linking accounts, and in general just using the Bilt Mastercard.

Link to Bilt Reward’s airline and hotel transfer partners.

 

5. Citi Thank You Points

Just like Chase and American Express, Citi Thank You Points are not tied to any specific airline or hotel. TYP (Thank You Points) can be used to book travel through the Citi Travel Center at a fixed value redemption. 

And of course can be used for statement credits, merchandise, shop with points, etc – BUT DON’T EVER USE FOR THIS PURPOSE!

Citi has some good transfer partners but I’ve found it difficult to earn large amounts of Thank You Points quickly with the limited amount of Thank You Point earning cards available and the lower sign up bonus amounts.

Link to Citi Thank You Points’s airline and hotel transfer partners.

The thing. Ihate most about Citi Thank You Points are all of the rules when sharing/combining/closing accounts.  For example, you can share points with anyone but those points expire after 90 days and there is a yearly limit.  If you want to cancel a credit card, those points expire 60 days after cancelling and you can’t just transfer to another Citi Thank You Point earning credit card – so you are forced to use, transfer, or downgrade your card to a no annual fee one.

Now that you are familiar with all of the different types of miles and points, it’s time to put together a strategy for applying for new credit cards based upon each credit card company’s rules.  My favorite strategy is to focus on acquiring large balances of the most flexible and valuable points (Ultimate Rewards, Membership Rewards, Thank You Points, and Capital One Miles).

One of my mistakes when first starting out was blindly signing up for all sorts of different credit cards in many different programs and not having a plan in place. At the end of the day, I had a small amount of Hawaiian Airline miles, a few American Airline miles, some Hilton points, etc.  I couldn’t really do much of anything with the small amounts of points scattered across numerous programs.

The big four (Chase, American Express, Capital One & Citi) and other banks have also gotten more strict in the past few years to limit us (Travel Hackers) from earning large amounts of points quickly.  Here are the current rules with each:

Chase

Chase implemented the 5/24 rule year ago.  Generally Chase will deny your application if you have opened five or more credit card accounts in the previous 24 months.  Chase checks your credit report and looks at the ‘opened date’ for credit cards.

Even if you close a credit card within two years of opening it, it will still count as it doesn’t drop off your credit report.  Also, if someone adds you as an authorized user on their account it may show up on your credit report too (typically the person adding you as an authorized user would have to use your social security number).

The good news is that if you are denied a credit card, it won’t count towards your 5/24 status.  Also many business credit cards don’t show up on your personal credit account so they won’t count either.

Other accounts such as mortages, student loans, car loans, etc also do not count against your 5/24 status – Chase only reviews credit cards.

Don’t remember how many cards you opened in the past two years – you can check yourself at annualcreditreport.com or here are some other easy ways.

Maximum Number of Cards

Chase has no formal policy of maximum number of cards that I’m aware of – I’ve had 10 total cards (both personal + business) at one time.  Chase will have a limit of amount of credit they will extend to you – I’ve noticed when getting my 10th card the credit limit was lower compared to the first few Chase cards.

Application Frequency

Chase typically restricts the number of cards you can apply for.  It’s been known you can’t get more than two personal cards every 30 days and one business card every 30 days.

Sign-up Bonus Restrictions

The majority of Chase credit cards (noted in the application) state you can earn the sign up bonus if you haven’t already received it within the past 24 months and aren’t currently a cardholder.

The one exception to this rule is for the Sapphire cards – which limits bonuses to every 48 months and you can’t have either Sapphire product (Sapphire Preferred or Sapphire Reserved)

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American Express

American Express has two types of cards – most are traditional credit cards (with a credit limit and the option to make payments with interest over time).  The other type is a ‘charge’ card where you must pay the balance in full each month and have no preset spending limit.  To complicate things further, Amex introduced a ‘Pay Over Time’ option for charge cards that needs to be enabled.

Maximum Number of Cards

Amex will allow you to have five traditional credit cards and up to ten charge cards (with no preset spending limit and the option to Pay Over Time feature).

Application Frequency

Amex typically restricts credit card applications to two every 90 days.

Sign-up Bonus Restrictions

Amex has probably the most restrictive rules on earning a sign-up bonus.  Typical language in the application restricts you receiving the bonus if you ‘have or had the card before’.  This is usually referred to as ‘once per lifetime’ restriction.

The good news is sometimes ‘once per lifetime’ doesn’t actually mean once per lifetime – it typically means 5-7 years once Amex purges old cardholder data.

Amex also has a ‘family’ of cards restriction.  For example, Amex offers multiple different Delta Airline credit cards – and this restriction will prevent you from getting sign up bonus on all of the Delta cards.

Amex does make it fairly easy to see if you are eligible for the sign-up bonus.  When you apply for an Amex card and submit your application – it checks for you and will have a pop up window tell you that you aren’t eligible for the sign up bonus and give you the opportunity to cancel the application before it goes through with the full application review.

I previously mentioned business credit cards (Chase Southwest Premier Business, Chase Ink Business, American Express Business Platinum, etc). You may be thinking to yourself that you are NOT a business owner and can’t apply for these.

It’s true, you must have a business to apply for business credit cards. But most people have businesses without realizing it. Having a business and being able to open up business credit cards can really accelerate your miles and points earnings.

As you saw in the ‘Credit Card Rules’ section, most business cards do NOT show up on your personal credit report and hence do not count towards your 5/24 status when applying for Chase credit cards.

Sole Proprietorship

Do you sell items on Ebay or Etsy?  If so, you have a business. How about having a rental property?  Do you do consulting work or are a tutor?  Do you babysit?  How about mowing lawns or shoveling snow for extra money?  All of these are considered businesses.

You don’t have to have a formal business setup with paperwork, LLC, corporation, etc. All of the above examples are considering being a Sole Proprietor. Sole Proprietorship is the simplest and most common structure chosen to start a business. It’s run by one individual and there is no distinction between the business and the owner.

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How to Apply

As a sole proprietor, by default, the legal name of your business is your own name. So when applying for a business credit card just use your own name as the business name. And since there is no distinction between the business and you – you will just use your own social security number as the business Tax ID.

The credit card companies will pull your personal credit report. You will be approved or decline based upon your personal credit worthiness, not business credit history which may not exist yet if you are just starting up.  So don’t worry that you will be declined because your business does not have a history.  Credit card companies know small business usually have a lot of startup expenses and they want your business to use their card for these expenses.

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Credit Reports

Another feature of some business credit cards is that they are NOT reported to personal credit bureaus. So while the credit card companies will pull your credit in order to approve or decline you, some companies will NOT report to the personal credit bureaus that a card was opened, payments were made, etc.

What does that mean for you? The business cards not reported will not show up on your credit report and not count against Chase’s 5/24 rule.

Typically, cards from these issuers are NOT reported:

• American Express
• Bank of America
• Chase
• Citi
• FNBO
• US Bank
• Wells Fargo

Types of business cards ARE reported:

• Barclaycard
• Capital One
• Discover

If you don’t already have a business, I would highly recommend creating one. The perks and bonuses you will earn from the credit cards are well worth it.