Please note that this site has financial relationships with some of the merchants mentioned here including Chase, Barclaycard, US Bank, Citibank, and American Express.
Getting started in the world of miles and points is often very exciting, but can also be a bit overwhelming. New deals, promotions, and credit card offers are constantly popping up, so it is good to have a reference point in terms of where to start. Here are ten basic steps to help guide you on the journey to (almost free) affordable travel!
- Sign-up for loyalty programs. By this I mean sign-up for various frequent flyer programs, hotel rewards programs, etc. You don’t need to go out on day one and sign-up for every program out there. In fact, I don’t recommend that at all, but make sure that before you travel one more time you sign-up for the relevant car rental, hotel, or airline programs. I recommend signing up for loyalty programs either as you need them (because you will be utilizing that company’s services) or when they run a good promotion for new members who sign-up. Always do a basic Google search for promotions before signing up!
- Think about your travel goals. Free or greatly discounted travel is fantastic, and you don’t always have to know how you are going to use your points in order for them to be valuable to collect, but when you are first starting out it is often much easier to have a specific travel goal in mind for your miles and points than to just seemingly collect points at random. For example, if you want to go to Europe and stay at top-end hotels for several nights, you aren’t going to focus on Southwest points to get you there. You may be focusing on United or American Airlines miles for your flights, and perhaps you might be interested in getting the Hyatt Credit Card or a Chase Ultimate Rewards Card to cover some nights at high-end Hyatt properties in London, Vienna, or Paris. That is just one example, but the type of points you need to get to Disney World aren’t always the same as the ones you need to get to Australia. Spend some time looking at airline and hotel redemption schedules to see how many points a flight or night at the hotel of your dreams will cost you.
- Check your credit scores and credit reports. There’s no denying the fact that the quickest and easiest way to rack up tons of miles and points is by obtaining rewards credit cards. This is something that I do in moderation and it has been insanely lucrative for my family. However, before you decide if that route is for you, it is important to get a handle on your credit situation. You can obtain one free credit report from each of the three credit bureaus annually from annualcreditreport.com. I also strongly recommend getting an idea about what your FICO score is. You can get an estimate of your score for free from sites such as CreditKarma.com. There is no “magic number”, but if your credit score isn’t at least 700, I would not recommend applying for rewards credit cards until you can bring your score up some.
- Obtain a good rewards earning credit card (or two). Assuming your credit report and credit score look good to go, I recommend getting a good rewards-earning credit card (or two). I would start slow. Don’t feel like you need to get tons of credit cards all at first. I would start with one or two good rewards cards that come with a good sign-up bonus. The best offers change regularly, but currently the Chase Sapphire Preferred is a fantastic card with which to started. You can learn more about the top available credit cards here. Getting 50,000 or more points from a credit card sign-up bonus is a great way to jump start (or supplement) your miles and points collection. It is very possible to get $500 – $1,000 in almost free travel from each credit card approval.
- Meet the minimum spending requirements for the credit cards you select. Most, but not all, rewards credit cards come with minimum spending limits in order to get the sign-up bonus. This can range from a few hundred dollars within a set period of time (often a few months) to $10,000 or more within a few months. If you can’t spend that much comfortably on your credit card each month and still afford to pay it off, then I recommend looking for cards that award the sign-up bonus upon the first purchase, or a very modest spending requirement.
- Shift your everyday spending from checks/debit cards to your rewards credit card. I’ll say right up front that this isn’t for everyone. If you find yourself buying things using your credit card that you wouldn’t otherwise purchase, or have trouble sticking to a budget by charging things, then this isn’t worth it. However, many people can successfully shift the majority of their daily spending (groceries, cell phone bill, insurance payments, gas, etc.) to a rewards earning credit card. That way you are meeting minimum spending requirements and earning rewards for virtually everything that you purchase. In general, I do not charge things that charge an extra fee to use a credit card (such as a mortgage), but I do charge virtually everything else and then pay it off at the end of the month.
- Pay attention to bonuses and promotions. These can come from your rewards credit card or the various loyalty rewards programs themselves. For example, a credit card that you have may offer 2x or even 5x points on a certain type of purchase. It makes sense to use that card for those types of purchases. Since my Ink Plus Business card gives me 5x on my cell phone bill, that is the card that I use for that monthly bill. Of course, not all promotions are related to credit cards. Most major hotel and airline programs run promotions at various times throughout the year as well. Hotels often come out with promotions several times per year, and those promotions can sometimes be so lucrative that it is worth it to make a reservation for the night even if all you do is check-in and leave.
- Track your rewards using a site like AwardWallet.com. Once you start earning points in multiple programs it can be hard to keep track of everything. While you can also use your own spreadsheets, I highly recommend using an online site like Award Wallet to help make that task much easier. Award Wallet can not only track the rewards you have in various programs, but it can alert you to when the points will expire and can also store your passwords so that you can log into many of your programs with just the click of a mouse.
- Once you have enough miles and points for your desired trip, redeem them. Many miles and points blogs (and forums like Milepoint.com and Flyertalk.com) can give you tips on how to get the most bang for your mile. It does take some work sometimes to find the availability you want so start early, be flexible, and be persistent. Just don’t let your miles and points gather dust. Historically miles and points only go down in value, so don’t be afraid to use what you have. Just like with cash, their value typically only goes down. Earn them and use them…then earn some more!
- Have fun. Earning and tracking miles and points does take some work but it can also be really fun. Don’t get too bogged down when things don’t go your way. This is a very rewarding hobby, and earning truly can be half the fun.