How I Earn Points and What You Can Do to Travel Cheaper and Sometimes Free!

 

Today I will cover how I go about earning points and miles and the many ways that they have out there to do so. A little over a year ago a friend of mine told me to go look at a site called the Frugal Travel Guy (shout out to Stro). And since then, I have been reading various blogs almost daily to learn about traveling on miles and points. They talk about all things travel, but with the use of earning and burning points and miles. The major way for someone to earn a lot of points/miles is by applying for and being approved, of course, for credit cards. And there is a bunch of cards out there that you can get. However, the most important thing about doing this is to protect your credit scores and keep it as high as possible. You shouldn't even think about starting to do this if your credit score is below 700.
Every time you apply for a new card, you credit will take a hit of 2-5 points for the inquiry the bank pulls on you. However, this 2-5 points dwindles off over time and you score returns to its previous number. There are many myths about applying for credit cards and negative effects that it has. This is far from truth if you play the game correctly. You must pay off your cards balance due every month. Never pay interest as this will hurt your score.

There are five different categories that are used to calculate your credit score. They are:

1. Payment History (35%)
2. Amounts Owed (30%)
3. Length of Credit History (15%)
4. New Credit (10%)
5. Types of Credit Used (10%)

How a FICO score is calculated

As you can see, payment history takes the biggest bite out of how your score is calculated followed by the amounts owed. This brings into play something called credit card utilization ratio. You always want to try to stay below 35% of what you owe out of your credit limit on a certain card. For example if you have a Visa with a credit limit of $5,500, you would want to try to keep your balance below $1,925. And again, pay your balance due every month. Don't not even glance at that "minimum payment." This is not your friend! Once you start to have these cards for a while, your length of credit history will begin to grow and strengthen your credit score as well. New credit and different types of credit (mortgage, auto loan, credit card, etc.) are both 10% of your total score. These both have a lesser impact on your credit score, but still pay attention to them.

Since starting in this game over a year ago I have applied for about eight new credit cards. I did apply for more than one at a time for a couple rounds but all of the applications were over 91 days apart. You shouldn't really apply for any cards before that amount of time as not to be denied because of too many credit inquiries. This whole process is called credit card churning and it will greatly increase your reward points and miles totals. Thankfully my parents got me a credit card when I was about 15 and have a long credit history and a good score so I can be able to use this method of earning.

This is not the only way of earning points but it is the most lucrative and fastest way to accrue a ton of points (almost for free). Once you have one of these credit cards, there is usually a spend requirement to reach in order for you to obtain the sign up bonus. I use the cards to pay for my daily spend and other bills online that allow credit cards to pay. Most of the spend I put on the cards is money I was going to be spending in the first place anyway. So there is very little generated spend or unnecessary spending you have to do in most cases.


So unless you want to spend a lot of money by buying airfare and staying in hotels to earn the points, credit card churning is the fastest and most easy way of earning to use for travel at a major discount. Protecting your credit scores are the most important thing though. Do not over do it! Apply for one card just to get your feet wet. Once you get that first credit card approval you'll be dancing like this guy! Oh yea!

I'll list some of the credit cards that I currently have and the current bonuses that come with approval from them. Getting a card is up to what kind of points you want to earn. Most of the airlines have cards as well as all the major hotels. The banks that issue some of the best cards are Chase, American Express and Citibank.

1. Chase Sapphire Preferred

• 40,000 bonus points when you spend $3,000 within 3 months of account opening (which is worth $500 towards travel when you book at Ultimate Rewards-Chase bank's rewards program)
• Earn 2 points per dollar on travel and dining and 1 point on everything else
• No foreign transaction fee and 7% annual dividend bonus on points you earn
• 1:1 point transfer partners of United Airlines, British Air, Korean Air, Marriott, Hyatt and Southwest Airlines
• $95 annual fee waived first year

 2. American Express Hilton

• 40,000 bonus points after first purchase and 20,000 more when you spend $3,000 within 3 months
• Earn 12 points when staying at Hilton properties, 6 at gas stations and stand alone supermarkets, 3 everywhere else
• Complimentary Gold status at Hilton for first year
• $75 annual fee not waived first year

3. Barclays US Airways Mastercard

• 30,000 bonus miles after first purchase
• 2 miles per dollar spent on US Airways flights, 1 mile per dollard everywhere else
• Redeem flights for 5,000 less miles (20,000 for domestic round trip instead of 25,000)
• 2 companion tickets every year, redemption starting at $99
• $89 annual fee not waived first year

4.  Chase United Mileage Plus

• 30,000 bonus miles after you spend $1,000 in first 3 months
• Check first bag free
• 2 United Club passes every year
• 2 miles per dollar spent on United flights, 1 mile for everything else
• $95 annual fee waived first year

These are just a couple cards that are out there. Some other good ones are:

• American Express Delta Skymiles 
• Citibank American Airlines
• Chase British Airways
• Chase Hyatt

 I hope you are able to apply for one of these cards and then ultimately use them to redeem for some pretty cheap travel!