Frequently Asked Questions for Beginners
Embarking on the journey of travel hacking with points and miles begins with securing lucrative sign-up bonuses (SUBs) from credit cards. To maximize these rewards, it's essential to understand how to meet minimum spending requirements, select the appropriate card, and evaluate annual fees. Below are a few questions that have come up in recent conversations.
How Do I Earn Sign-Up Bonuses (SUBs) and Meet the Minimum Spend?
Sign-up bonuses are the secret weapon of travel hackers. Instead of slowly accumulating miles over years of regular spending, SUBs give you a massive boost right away. Here's the playbook:
-
Meet the Minimum Spend: New cards require you to spend a certain amount (typically $1,000-$8,000, often around $3,000-$4,000) within the first 3-6 months. Don't panic! Use the card for all your regular expenses: groceries, gas, dining, utilities, even medical bills and childcare. Many services like insurance, internet, and cell phone providers accept credit cards. Pre-purchase gift cards for stores you frequent to extend your spending. Time large purchases like vacations or home improvements to coincide with the minimum spend period. If you have a partner or family member (Player 2 or P2), add the card to their digital wallet (Apple Pay or Google Pay) to accelerate spending.
-
Reap the Rewards: Once you hit the minimum spend, the SUB will be automatically added to your account, usually at the end of the billing cycle. For example, the Chase Sapphire Preferred often offers a SUB of 60,000 points (or more) for spending $4,000 in the first three months.
There Are So Many Cards—How Do I Know Which One to Choose?
Selecting the right credit card involves considering several factors. First, determine your travel goals. Perhaps there is a specific destination, or property that you are interested in. You'll want to research how to book that destination on points. You can also just ask me and I'll do my best to help! Maybe you don't have a place in mind and you just want to prioritize inexpensive flights throughout the US, the Caribbean, and Central America? Start working towards earning the Southwest Companion Pass. If you want to start earning some of the most flexible points that transfer to big names like Hyatt, Southwest, United, JetBlue, Virgin Atlantic, Air France, British Airways, you'll want to start with the Chase Sapphire Preferred.
Next, assess your spending habits and opt for a card that offers bonus categories aligning with your regular expenses, such as groceries, travel, or dining. Additionally, be attentive to elevated sign-up bonuses that may be available for a limited time.
How Long Will It Take Me to Earn Enough Points to Travel?
The timeline depends on your spending habits. Meeting the minimum spend requirement promptly can result in earning a sign-up bonus within 1 to 3 months. For instance, a 60,000-point bonus may cover a round-trip domestic flight or several nights at a mid-tier hotel. Strategically acquiring multiple bonuses annually can lead to sufficient points for international business-class flights and luxury accommodations.
What is Two-Player Mode (P2)?
What is the Chase 5/24 Rule?
Chase's 5/24 rule states that if you've opened five or more personal credit cards (from any issuer) in the past 24 months, you will not be approved for another Chase card. Therefore, it's advisable to prioritize acquiring Chase cards before reaching this limit. The good news is that business cards do NOT count towards your 5/24 status. Just be sure that you are UNDER 5/24 if you want to apply for a Chase Business card.
Chase limits approvals to those who have opened fewer than five personal credit cards (from any bank) in the past 24 months. Prioritize Chase cards before hitting this limit. Business cards don't count towards your 5/24 count (but you must be under 5/24 to get a Chase business card).
So Many Companies Charge Credit Card Fees—When Is it Worth It to Pay the Fee?
Paying fees can be beneficial under certain circumstances. If a 3% fee enables you to secure a sign-up bonus worth thousands in travel, the fee may be justified. Incurring a minor fee might be worthwhile if it assists in reaching the required spending threshold for a substantial bonus. However, some bills offer fee-free payment options, so it's prudent to compare and choose the most cost-effective method.
What About Limited-Time Offers?
Banks periodically increase sign-up bonuses, making it an opportune time to apply. For example, if a card normally offers 60,000 points but temporarily increases to 80,000 or 100,000, it's an excellent opportunity. Many premium cards release higher offers in the fall or early spring. If multiple cards have elevated offers simultaneously, plan your applications based on your spending ability. You want to be sure that you can hit the minimum spend and earn the SUB.
Is the Annual Fee Worth It?
Evaluating whether an annual fee is worthwhile depends on several factors. Consider the value of perks such as free checked bags, airport lounge access, travel credits, or hotel elite status; if these benefits offset the fee, it may be justified. The card's point-earning potential is also crucial; if it helps you travel for free, it's likely worth keeping. Some premium cards allow downgrading to a no-annual-fee version, preserving your points. The Travel Freely app provides guidance on when to keep vs. cancel a card. If you haven't already, download this app.
Here is an example! We hold the Capital One Venture X card. This card has a $395 annual fee. It's a doozie! HOWEVER, this card comes with a $300 annual travel credit (which we used to pay for a rental car), a 10k annual point boost that is worth $100 minimum in travel, $120 TSA Precheck or Global Entry credit and the best is the Capital One Lounge access for our family. Free food and drinks every single time we fly! If you travel with kids, you know travel day meals add up quickly. And if that wasn't enough, this card earns 2x points on every single purchase. It's a great card for everyday spend. For these reasons, this annual fee is 100% worth it. This is a card that I will keep year after year.
Do My Points Expire?
The longevity of your points varies depending on the program. Bank points from issuers like Chase, American Express, Capital One, and Citi typically remain active as long as you maintain at least one open card within the respective program. Those points stay with the bank, so if you cancel all of the cards, you lose the points. In contrast, with co-branded cards, your points are with the brand's loyalty program rather than a bank. So you keep the points if you cancel the card. For example, the Southwest credit card earns Rapid Rewards points. Once you earn the points, they live in your Rapid Rewards account with Southwest, not Chase. The points are then subject to the airline's rules.
The Difference Between Regular and Co-Branded Cards
Regular travel cards, such as the Chase Sapphire Preferred® Card or the American Express Platinum Card, offer flexible points that can be transferred to multiple airlines and hotels, providing versatility in redemption options. Conversely, co-branded cards like the United Explorer Card or the Marriott Bonvoy Boundless Card accumulate points or miles within a specific airline or hotel program and often come with additional perks like free checked bags or elite status. This means that those points cannot be transferred to any other loyalty program. This is why we typically recommend transferable points!
Ready to Start Your Journey?
Travel hacking can seem complex, but it's achievable with the right strategy. I've done the research to simplify it for you. Ask me your questions! I'm here to help you learn, earn, and travel for less. And if you find this information valuable, I'd appreciate you using my referral links when applying for new cards – it's a great way to say thanks!
Comments
Post a Comment