Do you know people that always seem to be taking fun trips for free?
For years I never understood how to make this happen. That was until my sweet friend Julie “the travel expert” taught me how to play the game. Julie’s family has been able to travel to California, Hawaii, Colorado, Florida, Grand Cayman for free or very minimal fees for flights.
Disclaimer: This blog will only be useful if #1. You have very good credit, and #2. If you pay your full credit card balance every month. If your credit score is not great, keep reading so that when it gets better, you can understand how to travel for free.
I love Dave Ramsey and agree with 99% of what he teaches, but don’t agree that you should not have one credit card. If you are responsible and pay it off every month, there are lots of benefits.
For the past few years Dave and I have only had one credit card (Capital One Visa). We chose this card because we wanted to earn reward points and there was no annual fee. Because we never carry a balance, we have never paid any interest fees.
I told Julie that I felt like I was not getting the biggest bang for the buck when it came to Capital One rewards. She asked me a few questions and then gave me advice. She asked what my goal was (plane tickets, hotel stays, cash back, gift cards). I said that I wanted to fly all 5 people in my family to Europe for spring break. Plane tickets range from about $1000 to $1600 (or 60k reward miles).
Julie recommended that I should start by applying for the Chase Saphire (this seems to be the current favorite amongst “professional point collectors” and the Chase United visa. Both cards have great sign on bonus incentives and because I live in Houston (United’s hub) I should focus on racking up United points.
Chase Saphire is favored by most people for the following reasons:
- Zero annual fee for the first year
- If you spend $4000.00 in the first three months, you will earn 50,000 airline miles.
- You can earn double points on travel and dining. This includes ubers, tolls, plane and train tickets, many restaurants and hotels
- No foreign transaction fees, free travel insurance (baggage delay, trip cancelation/interruption)
- Purchase protection (up to $500 per purchase). For example, If you buy an ipad and accidently spill coffee on it and ruin it, you can file a claim (if it was purchased in the last 120 days). If you lose it or it gets stolen, as long as you purchased the item using your card and it was in the last 3 months, they will credit your account.
- Extended warranty protection (up to $10,000). Suppose you purchase a $2000 tv that has a 2 year manufacturer warranty. If your tv breaks 2 years and one day after the warranty expires, Chase will pay for it to be repaired or replaced.
- If someone uses your referral code and meets the criteria, you receive 10K miles. You can have up to 5 people per person use your referral code.
Here is a link to an article that explains all of these benefits.
- No annual fee for the first 12 months
- 40k airline miles after you spend $2000 in the first 3 months.
- Double points for a large number of restaurants, hotels, and stores
- Free bags
- 100.00 credit
- 100.00 credit if you sign up for global pass
- 2 free yearly United Club passes
So here is exactly what Dave and I are doing.
Step 1: I applied for the Chase Saphire and was approved. DO NOT put your spouse as an authorized user. I made this mistake. You don’t want them to be an authorized user because they are doing to sign up for their own card. I reported my household income (I don’t officially have a job, but was approved). Earn 50K miles from sign up bonus, 4000 miles from using the card, earn double points for restaurants, travel, etc.
Step 2: Apply for Chase United. Earn 40K sign up miles, 2000 miles from purchases, extra miles for restaurants, hotels, and online shopping (gap, old navy, macys) if you go through the United visa link.
Step 3: Have Dave apply for Saphire and United cards (do not put me as an authorized user!). Earn the 100K miles I earned
Step 4: Share my referral link and earn 10k miles every time someone signs up for the Chase Saphire using my link.
If the plan goes accordingly, we will have about 200k miles towards the 300k in a few months.
Is it bad to have several credit cards? Won’t it crush your credit score? I always thought this, but this is not necessarily the case. Yes, you have to take things into consideration such as income, current credit score, but this can work. This works best for people who pay for a decent amount of goods and services on a credit card and pay it off at the end of the month.
How do credit card companies make money? Interest from unpaid balances, merchant fees, and some people decide to keep the card and become loyal customers to rack more points for rewards on things they would normally use cash, checks, etc.
Who should not try and do this? People who can not meet the minimum spending in the time frame without overspending, going into debt, etc. People who need to get a mortgage, or other major loans in the next 6 months.
Are the 10% store credit cards worth signing up for? Only if you are spending a decent amount of money. I signed up for the Lowe’s card when we bought kitchen cabinets for the barndo so that I could save a significant amount of money. Just make sure you remember to close the card if you are not using it.
Which company seems to be the “most strict” about people playing the credit card point game? Apparently Chase (specifically Saphire) has tried to crack down and make it harder for people to play the “credit card collect miles on a bunch of cards game”…IE open an account, get the rewards, put the card in a drawer, buy the plane ticket, and then close it before the 30th day of the 12th month. For this reason, I suggest that you apply for the Chase Saphire first. This is the best and the hardest to get approved for if they see that you have tons of other “loyalty” credit cards.
Why am I only focused on Europe plane tickets? When I do the calculations, if it cost me 60k miles for a $1600 plane ticket, the point valuation is 2.67 cents per mile. If I fly to to Chicago it will cost me about 25k miles. If I just find a cheap plane ticket (300.00), then the point valuation is 1.2 cents per mile. My miles go twice as far and I can scour the internet for cheap deals to the US, Mexico, and Canada.
Why do you prefer Chase Saphire over Capital One? I can sign up for the card and earn 50k miles (almost a Europe plane ticket) or I can use 160,000 points that it has taken me a year to collect on Capital One and buy the ticket out right. Playing the credit card point game seems to be a better deal.
Should I apply for other airline loyalty programs? My friend Julie suggested I apply for a Lufthansa credit card if I am short points because they are partners with United.
Are the hotel reward credit cards worth it? They are all different. Everyone should sign up for the free reward programs. The credit cards are only worth it if they give you a significant amount of points that can go a long way.
Should I close my United card after the first year to avoid the annual fee? Probably not. Because I get free bags, that alone will pay for the fee plus some.
Are there any other cards that might be worth looking into? The Barclaycard Arrival is offering a 60K bonus which is good for $600 off any travel after you meet the spending requirement. You can use the $600 for hotels, vacation rentals, etc.
Am I spending more money because I am wanting to rack up points? No, I am just cognizant of how I pay my bills. I have moved my tolls to my Saphire to get double points, we pay for our groceries, gym membership, etc. to get the points. We aren’t buying extra stuff for points because that defeats the purpose.
So there you have it. This is how people travel for free. I am so appreciative for all of the help my friend Julie (and Amy B.) have given me. We all three love to travel and want to figure out a way to go on more trips for less money!!!
I am going to include the Chase Saphire referral code and the Chase United referral code. I know it is a shameless plug, but it really is a win/win. If you decide you are going to get this card, you get 50k points and by clicking on my link and I get miles. Christa and I wish we would have realized this because between the 4 of us, none of us referred each other (so dumb…lol…that would have been a free plane ticket).
My question for you, do you have any additional tips to add?