May 8, 2016

Getting Started With Credit Card Signup Bonuses

This is an update to a post I wrote back in 2014.  While the specifics have changed a bit, the strategy remains the same.

The last few years of traveling have been unreal.  We've taken trips to Hong Kong, Maldives, Dubai, London, Singapore, Amsterdam, Paris and Bangkok!

Hong Kong!
Many of you have asked us how we afford to go on all these trips.  The answer is pretty simple…we pay less per trip than the price of an economy ticket from the US to Europe.

Etihad First Class Apartments

I started looking into ways to save money on our honeymoon in early 2012.  We both wanted to go somewhere really special but didn’t want to completely break the bank.  So I started researching ways to use our existing miles and points, build on those balances, and then redeem them for our honeymoon.  There is a ton of information online (especially on these blogs) that I consumed early on and blogs that I read on a regular basis.

Over the past several years, I’ve built up our point balances, redeemed for several ridiculous trips, and managed to train Emily to use the “right” credit card when going out to dinner, buying gas, or shopping online. 

During that time frame, we've been approved for over 100 credit cards racking up 5.2 million points in the process.  Let that sink in for a second.  5.2 million.  When I tell people this, they often have dozens of questions about my credit score, outstanding debt, annual fees, etc…”  So here are a few answers to those questions:

  • My credit score is over 800…in fact, my score has gone up about 40 points over the last couple years as I acquired more open credit and lowered my overall credit utilization percentage
  • I pay all of my credit card bills on time and never carry a balance…this is not a game to be playing if you can’t afford to pay off your bills each month or are planning on applying for a car loan, mortgage, etc...
  • While there are several cards that I renew each year that carry an annual fee, as a general rule I usually cancel cards with a fee before the fee is due (most cards are first year free)
  • Bonuses have ranged from two free nights at any Hyatt in the world (we've used ours at the Park Hyatt in Istanbul and Andaz New York) to 100,000 points for meeting a specific spend threshold

This is the number one way to earn a ton of points and miles quickly.  You can check out the getting started page for other mileage earning tips and tricks.  While I wouldn’t recommend this strategy for everyone, it does make sense if you are financially savvy and organized.  With just a few hours every few months, you can easily rack up hundreds of thousands of points/miles to go on your dream vacation.  Here’s a quick example to illustrate the point:

A couple each sign up for the following credit cards (four of my favorites) and meet the required spend to receive the bonuses:

          This would require $24K in total spend across two people.  Not unreasonable across a 6-9 month time period when you consider that you're able to put expenses like like utilities, car insurance, health expenses, and all everyday expenses on your cards.    All of these cards carry annual fees ranging from $65 to $95 but they are waived for the first year with the exception of the Hilton Citi Reserve Card.  When the annual fees come due in year two, you can either keep the card and pay the fee if you find value in the product, cancel the card, or ask for some sort of reduction in the fee to keep it.

Waldorf Astoria Amsterdam - a great use of free Hilton nights
    Doing so would yield:
  • 4 free weekend nights at any Hilton (including Conrad and Waldorf Astoria) in the world
  • 56,000 Starwood points good for 5 free nights at an upscale Westin/W hotel
  • 118,000 Ultimate Rewards
  • 114,000 United miles 
Consider that you can transfer the Chase Ultimate Rewards to United, you would have 232,000 United miles.  That's enough miles for two roundtrip business class award tickets to Europe.  Beyond that, you have 4 complimentary weekend (Fri/Sat/Sun) nights at any Hilton property in the world.  The Hilton Reserve card also provides the cardholder with Hilton HHonors Gold status.  Good enough for upgrades, lounge access, and free breakfast.  This can save you hundreds of dollars across the year.

You'll also have 56,000 Starwood points to "spend" on hotels during the week.  Your out of pocket expenses for a 9 night trip to Europe including airfare and hotels?  $190 in annual fees for the Hilton cards and the taxes in booking the flights.  That is it...what are you waiting for?

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