We love our rewards programs, and we are good at making them pay. As you read through this post you might think we are crazy for opening and closing as many cards as we have, but we would argue that you are crazy not to take advantage of the offers thrown in your mailbox. We have taken our airlines program saving to the levels similar to ladies on that TV show “Extreme Couponer’s”. We are borderline ‘Extreme Mileage Programers’, and we are about to show you why you should be too!
Are we crazy?
Well, maybe a little. At one point this year we had roughly $200,000+ worth of open credit on mileage or other rewards cards. We had so much we ended up canceling a few cards and lowering the limit on others in order to be approved for new ones. To clarify we follow all of the rules and only take advantage of the offers that the credit cards and there partners offer. We also never carry a balance. A word of warning if you don’t pay in full every month, the interest rates on rewards cards are generally worse than normal cards.
Credit card companies offer rewards for a number of reasons, the most obvious is to build loyalty with their brand, but really it’s to get paid. Every transaction made with a credit card results in a fee for the vendor that is making the sale, paid to companies like Visa, AMEX, or any other brand in your wallet. So why not get your cut of their fees?
What about my credit?
Yes, there is a small hit to your credit score when applying for a new card. The type of hit you see is not necessarily the damaging kind. When you apply for a card its categorized as a “Hard Inquiry”, meaning a card company ran your credit to ensure credit worthiness. Inquires account for 10% of credit score and the more inquires you have that portion of your score can be effected. The upside for long term travelers is that inquires fall off after 2 years.
We keep close tabs on our credit monitoring for changes in the score. In the past year where we opened and closed more than 8 different cards, and have seen our credit score drop by 10 points. We are not too worried, we are still in the excellent category, and we will be leaving for 15 months. In that time there will be no credit inquires and the score should drift back up. All of this makes a strong case in our opinions for other travels to consider when planning a RTW trip. Many of the programs we use have international reward redemption, and its a great way to cut out cost of big flights.
Stay on top of it!
In order to maximize your miles you need to be on the top of your game tracking how much you’ve spent on which card. Hannah is a master of this, she knows what cards we have open, how much we have spent, and how many miles we have with them all. One thing to keep in mind is that most cards require a certain level of spending within a month to three months of opening the card. We put as much of our normal monthly spending on our credit cards to maximize our miles, anything that allows it such as the cable bill, power/energy bills, etc.
Look for opportunities on what you use your credit cards for, think large purchases. Large purchases are most helpful when you have a new card and making the minimum requirements to get the enrollment bonus. Just last week we filled up our American Airlines cards (yes cards, both of ours) when Hannah’s transmission on her car died. It sucks, but might as well try and make some lemonade when you get some lemons. We turned paying for the transmission into 35,000 enrollment miles + 1,800 spending miles. With American those miles could easily kick off a trip, one-way flights between North America and the Europe average around 30,000. We plan to use the points from this mishap to bring us from Europe back home at the end of our RTW trip. Here are some other ways you may be able to meet the spending requirements:
- Taxes – It’s property tax season, many counties will allow you to put your taxes on a credit card. Before you sign on the line make sure you won’t have to pay the vendors fee, which would wipe out any benefits.
- Trip Insurance – For people considering long term travel, if you plan to take out travel insurance before you leave consider applying for a new credit card to pay for it. That single transaction could meet the enrollment needs and get you enough miles to get you a transcontinental flight.
Tips for getting the most Miles
- Sign up to be part of the rewards program – Before applying for the credit card get into the frequent flyer program. Often times rewards members get better enrollment bonuses than non-members.
- Compare online – Use a search engine to see what other people are getting when signing up. If you didn’t get as good of an offer, call and request a better bonus.
- Don’t be afraid to call – The customer service reps have a lot of power to get you better bonuses and more miles. It sounds bad, but threats go a long way. For example, we have said we were not going to activate a card unless we were given the best amount of miles, they usually give it to you.
- Don’t take no for an answer – While on the phone with customer service, don’t give in to them saying ‘That’s all we can do for you’. Always ask for a supervisor, they truly have the power to grant you what you want.
Delta Airline AMEX Card – 35,000 Miles (x2) – Plus free checked bags – Annual fee waived first year- This card makes sense for business travelers who fly Delta a lot, but really won’t get you too far with miles redemption. The miles earned here covered our flight from Lima to Milwaukee (one-way) for 45,000 miles each. Total Saving of $1,000.
American Airlines AAdvantage Visa Card – 35,000 Miles (x2) – Plus free checked bags-Annual fee waived first year- We are cashing these in for 2 flights for both of us, they will bring us home from London to Chicago for 30,000 miles ($800 each) Total Savings of $1,600.
SouthWest Airlines Rapid Rewards Program – 50,000 Miles (x2) -$69 annual fee- SouthWest has a great domestic rewards program in the US, and last year they partnered with AirTran and they now have a few international options. Another great feature this program has is cashing in miles for gift cards. With these miles Hannah flew from Milwaukee to New York for free, and then we still had enough miles to cash in for $900 in gift cards we will use for groceries. Total Saving of $1,100+
AirTran Airlines A+ Rewards Program- 32 credits(1x)-Annual fee waived first year- Plus 2 first class upgrade certificates- We cashed these points in for us both to fly from Milwaukee to Cancun round trip for our February Tulum, Mexico trip and hopefully we will be able to upgrade to first class! Total Saving of $1,000+
United Airlines Credit Card – 55,000 Miles (x2) -Annual fee waived first year- Free checked bags- 2 free Club passes- We each got a card with United because their rewards are awesome with lots of international partners to redeem with. We booked 6 flights for both of us for our RTW trip saving us over $2,400 in flight costs (not to mention some really long bus rides). Total Savings of $2,400 after our fees/taxes
Holiday Inn Priority Rewards Credit Card – 80,000 points which we cashed in for 4 nights in New York Times Square Area at a hotel normally $300/Night. Total Savings of $1200
REI Credit Card – $100 gift card and a 20% off coupon
To date we have cashed in for about $8,400 in rewards just by spend what we would normal spend. And we are not done yet, we will likely do at least one more before we leave for our RTW trip this June.
An RTW trip not in your future?
Well how about traveling more often or further with your holidays, smartly using credit card programs can shave thousands off your travel costs every year. Make sure whatever is in your wallet is paying you back!