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Holy moly, I even surprised myself by the time I finished tallying up all of the rewards program statements. 1.4 million points is beyond even my wildest dreams when I started thinking about starting this venture. The best thing… I have another 250,000+ points waiting for me within the next few months.
Now, before you think that I spend all kinds of crazy money on trips, please reconsider. I have a reputation among my friends for being a saver, on a first-name basis with the clearance/sale racks, and always having a coupon or deal for everything we do. I’m not THAT bad, but it probably seems that way.
I look at it this way… if I’m going to part with my hard-earned money, I better be getting some damn good value out of it.
So, in my quest to save money while still doing what I love… exploring new cities and attending sporting events while we travel… I jumped headfirst into the “miles and points game.”
Before I started reading some of the popular blogs, I thought I had travel down to a science with our timeshares, the Southwest Companion Pass, and our Starwood Preferred Guest hotel points.
That couldn’t have been further from the truth.
- Intro (this post)
- App Parties
- Hotel Points (post coming soon)
- Airline Points (post coming soon)
- Bank Points (post coming soon)
It turns out that I was getting an “A” in Travel Points 101, which really helped in our travels throughout the United States. But that “basic” travel knowledge wasn’t getting us to some of the more foreign and exotic locations my wife and I have both dreamed of.
So, I started doing research and my eyes have been opened. I’m now working on my Masters and am bringing all of you along for the ride.
The biggest and best bonuses come from credit card signups and being able to coordinate your travel to take advantage of hotel/airline/bank promotions. Obviously, to take advantage of the credit card bonuses, you need to have decent credit… not perfect, but decent.
This year, I applied for 20 different credit cards and was approved for 18. Like most things in life, you learn along the way. Of the two I didn’t get approved for, 1 was because Citibank requires a minimum of 65 days between applications, and I applied after 54 days because I had not clue. Whoops! The other was with Capital One for a card that offered to match your points earned on any one card from the previous year up to 100,000 points. They must have put the credit threshold super high to reduce their liability.
So, let’s focus on those that I was approved for. 5 from Citibank, 5 from Chase, 4 from American Express, and 1 each from Bank of America, Bank of Hawaii, Barclay’s, and US Bank. These cards provided opportunity to earn almost 900,000 points and over $200,000 in new credit limits.
Now, the first thing that I’m sure that is going through your mind is… “ARE YOU NUTS? THAT’S A LOT OF CREDIT CARDS. ISN’T THAT GOING TO KILL YOUR CREDIT?” To answer, yes (I may be nuts), yes (it is a lot of cards), and no (it won’t kill your credit).
During this whole process, I was able to refinance my investment properties to get 3.25% and 3.75% rates and just completed my refinance of my primary home to 3.25%. Pretty sure it didn’t kill my credit since my FICO is still above the 740 threshold for “A-paper”.
Now, they key is to both consolidate and spread out applications. I know… how can you do both? Well, you apply for several in one day (so the credit inquiries don’t show up when each bank pulls your credit), then wait several months (approx 4-6 months) depending upon how many application you did during your last “app party” (lingo for applying for a bunch of cards on the same day).
When a bank pulls your credit, there is a small ding of a couple points… and, sure enough, when multiple applications get pulled, those dings do add up. However, the impact diminishes with time (about 6 months) and the inquiries disappear completely after 2 years. The trick is to space out your inquiries far enough to maximize your points and minimize the impact to your credit.
The added bonus is that the added credit availability (aka new credit lines) will actually serve to improve your credit since it lowers your overall credit utilization ratio (your balances owed vs. your total credit lines). And, as you find cards that are “keepers”, the longer you hold on to them, the more it increases your average account age (another factor in your credit score).
In the next few posts, I will detail how you too can travel for pennies by taking advantage of these promotions and utilizing one of consumers’ most underutilized assets… their credit.
(Once I provide all the details of how I did it, then the post series will warrant 5 razors… until then… it gets docked 1 razor for leaving the readers hanging!!!)