My Loyalty Points and Credit Card Strategy

Earlier, I shared how I used almost 900,000 credit card, airline, and hotel points to save over $20,000 on travel expenses during my six-month sabbatical. The obvious next question that many of my friends have been asking me is: How did you get so many points? Well, there are three parts to this answer.

Staying and flying

Obviously the most logical way to earn points is to simply fly with the airlines stay at the hotels, preferably selecting one or two of your favorite airlines and hotel brands so you can build up a collection of points. Further, by signing up for certain credit cards like the American Express Platinum card, you may be given elite status with that brand which typically includes higher earning rates when staying at those hotels (along with the occasional upgrade!). Through work, I typically fly 3-4 times and stay about 10-15 nights in hotels per year. It’s not a ton but it certainly lays a solid foundation for some points for my own personal travel.

Tracking hotel and credit card promotions

The airlines use discounted fares as their primary promotional strategy; however, hotels and credit card companies often dangle bonus points as an incentive to stay and spend more. For example, IHG runs an Accelerate program every few months and program loyalists are invited to reach different benchmarks in order to earn additional bonus points. At the end of 2017 and early in 2018, tracking this promotion will save me over $700 in hotel stays!!

There are several great examples of this in the world of credit cards as well. For example, American Express runs Amex Offers in their app and on their website which frequently offers extra points for spending money with certain merchants. I don’t recommend buying things just to earn points but if you’re going to buy something anyway, you might as well max out the points you could possibly earn from that purchase.

Another great example that I’ve used recently is the AAdvantage Aviator Red card which launched a Flight Cents program last year. This promotion rounds up each purchase to the nearest dollar and awards one point per cent on the spare change. Though these aren’t “free” points, they still represent a terrific value. I used to always leave tips so my total amount was an even dollar amount but now I tip to $xx.01 so I am essentially buying 99 points for 99 cents.

Other mechanisms to accumulate chunks of points at a time include referral bonuses and retention offers. Since many of my friends ask me for credit card advice, I simply ask them to use my personal link to sign up for their next card. Most credit card companies offer a small bonus for these referrals. Similarly, credit cards will often offer retention bonuses to incentivize you to keep your card and continue to pay their annual fee. You must call and threaten to cancel but often these offers can be worth 10,000 points or more.

If this all sounds like a lot of work, fear not! I’ll do my best to give you some of my favorite tips on this site under the “Travel Tricks” category as well as on Facebook and Instagram. There are a number of other great resources out there to make tracking these promotions incredibly easy. Check out The Points Guy and BoardingArea for help in tracking all that’s happening in the world of easy-to-earn bonus points.

Credit card sign-up bonuses and strategic spending

This is by far the easiest way to earn big chunks of points in a hurry!! Since September of 2015, I have signed up for 23 credit cards which have earned me 1,235,000 points plus seven free hotel nights from different loyalty programs!! Plus, each of these programs has a minimum spend to earn those bonus points so I’m earning additional points as I get those sign-up bonuses. This has been an aggressive strategy and it’s certainly not for everyone. I’m incredibly diligent about tracking all of these cards and ensuring that I’m not spending beyond my means or paying annual fees on cards that don’t provide me any value. If you aren’t highly organized and financially disciplined, please proceed with caution!!

Each credit card also offers bonus points when you spend on certain categories. For example, you can earn 5 points for each dollar you spend on airline tickets when you buy them with the American Express Platinum Card and 3 points per dollar spent at all restaurants using the Chase Sapphire Reserve. Using the right card at the right time is key to accumulating big points over time. Think carefully about the places where you spend the most money and be strategic about which cards you sign up for in order to maximize these bonus categories.

A few important things to remember in the pursuit of points:

1. Don’t spend beyond your means!!!
2. Don’t pay interest on your credit card… ever
3. Don’t buy things that you wouldn’t otherwise buy just to get bonus points. Getting points back for spending on your credit card is awesome but in the grand scheme of things, you’re usually only getting 5% or less back in points. It’s just not worth it to spend money just to earn points.
4. Understand the impact that signing up for credit cards will have on your credit score. It’s not necessarily a bad thing but, as an example, you may not want to see even a small dip in your credit score if you’re considering applying for a mortgage in the near future.
5. Carefully track credit card annual fees and only keep cards that provide some value to you. You’ll need to research all the benefits that each credit card offers and determine what benefits are most important to you.