Myth Series #1: You Must Fly A Lot to Earn Miles–FALSE!
Why flying a lot to earn miles is a myth
When I tell people about my points and miles addiction, the first thing that many of them say is, “You must be flying all the time to get that many miles!”
While I do travel sometimes for work on paid tickets, the vast majority of the miles that I earn are NOT from flying. There are many ways to earn miles, namely, credit card sign up bonuses, online shopping portals, manufactured spending, and others. Don’t worry if you aren’t yet familiar with all the terms–just rest assured that you don’t have to hop on an airplane to actually earn enough miles for a great trip!
The easiest choice: Credit Card Sign Up Bonuses
If you want to take a few great trips every year in first or business class you can easily earn enough miles to go anywhere you want in the world by signing up for the right credit cards and typically meeting some amount of “required spending.” Now, this practice assumes that you have decent credit and can effectively manage your budget. Remember, credit card companies are obviously in business to make money, not provide free travel–and they make a lot of that money off of people that do not pay their balances off in full every month. There is absolutely nothing wrong with carrying a credit card balance if that is something you choose to do–however, there are many better credit card choices than airline/travel cards to carry a balance. The typical airline/travel card that earns points or miles has interests rates around 18-19%–so carrying a balance really wipes out any of the value of earning the points/miles in the first place.
If you have a travel destination in mind, you can choose the best credit card to earn miles for that particular trip. Often, people are surprised that opening a United Airlines branded credit card, for example, may not actually be the best choice even if you want to take a trip on United Airlines! There are several credit cards that earn points that are transferrable to numerous different airlines and hotel chains. Sometimes these cards have better sign up bonuses and earn more points per purchase–making it that much easier to realize the trip of your dreams.
Some current examples of Sign Up Bonuses
British Airways Signature Visa (Chase): 100,000 bonus British Airways Avios
Chase Sapphire Preferred: 40,000 Ultimate Rewards Points
Citi® / AAdvantage® Executive World Elite™ MasterCard®: 75,000 bonus American Airlines miles
Citi® Hilton HHonors™ Visa Signature® Card: 75,000 bonus Hilton points
Gold Delta SkyMiles Credit Card: 50,000 bonus Delta miles
Citi Prestige® Card: 50,000 bonus ThankYou Points
Citi ThankYou® Premier Card: 50,000 bonus ThankYou Points
Take, for example, the Chase British Airways Visa with 100,000 bonus miles, called Avios. You may think that there is no point to signing up for this particular card unless you were planning a trip on British Airways. However, these 100,000 Avios are good for trips on any One World Alliance partner airline, of which British Airways and American Airlines are two of the largest partners. Using Avios on American Airlines shorter domestic flights are often a high-value use of the miles.
Also, above, the Chase Sapphire Preferred card is currently offering 40,000 Ultimate Reward Points for signing up and spending $4,000 on purchases in 3 months. Chase claims that those 40,000 points are worth $500 when redeemed through their Ultimate Rewards Portal. However, Ultimate Rewards are extremely flexible and you can transfer them to 11 different airlines and hotels–including British Airways and United. After transferring them to any of these partners it is extremely easy to find high-value use for the points and far exceed the baseline $500 value that is advertised by Chase.
(By the way, for all you United fans out there: the Sapphire Preferred Card earns more points per dollar spent on dining and travel than United’s branded credit card–making this card actually better for earning United miles and maintaining the flexibility to transfer them elsewhere if your plans change!)
Annual Fees and Minimum Spending
All of this probably sounds great until you remember the card’s annual fee or its minimum spending requirements to obtain the initial bonus points. I personally do not like paying annual fees on credit cards, but sometimes it is necessary in the points/miles game. However, some of these travel credit cards do waive the annual fee for the first year. In that case you can open the card, meet the minimum spend requirement, get the mileage bonus, and close the card in about 9-12 months before the annual fee comes due. If you do choose a card with a non-waived annual fee, just look at the fee as an investment in your future travel. If you are sure you can use the points/miles that you are going to earn for a high-value use, then the annual fee should be considered in the value proposition–but will likely be negated by the value you find in the redemption itself.
As for minimum spending, people do get nervous about meeting these minimums. Again, if you cannot manage to pay off these cards each month, this technique is probably not a good choice for you. But, if you move all of your normal spending for one month onto one credit card, including gas, groceries, dining out, utility bills etc you may be surprised at how much you can actually charge on a card per month. If that is still not enough to meet the minimum spending requirements there are many other techniques out there that will be discussed in future posts.
Bottom line–if you are a beginner to this hobby you may want to start off small with a credit card with a small minimum spend requirement to test it out before you jump into some of the bigger offers. In fact, there are some cards that give you a mileage bonus with no minimum spend requirement, like the Alaska Airlines Card.
Credit Cards are a great way to build miles quickly
Hopefully this article wet your appetite for the things that are possible just by using credit card sign up bonuses. Many of the cards out there today offer enough miles just from signing up and meeting any required minimum spend to take at least a nice domestic trip in economy. However, by combining that bonus with other cards or opening up multiple of the same cards you can really start to pad your mileage accounts and realize the miles that will allow for Business and First class travel anywhere in the world. Trust me, it is not as complicated as it may seem. I will discuss more details and examples in future posts!