Interested in getting in on the points and miles game so you can travel like the jet set, but don’t really know where to start? Check out my points & miles beginners guide!
It can be a daunting and confusing task trying to figure out where to begin when you want to start utilizing points and miles to make your travels less expensive. Which credit card(s) should I get? How many cards should I get at once? How will this impact my credit? Which points or miles should I go after? How do I use my points and/or miles after I get them? The questions are endless. Thankfully there are sites like the Points Jet Setter which are filled with great information to help you maximize your points and miles strategy! And remember, if you want a customized credit card sign-up plan or need help utilizing your points and miles for your travels, we offer Award Consulting for all things points and miles!
Opening Loyalty Accounts
The first step in the process is making sure that you have opened loyalty accounts with the airlines, hotels and rental car companies that you use. Have a flight on American Airlines? Make sure you open an AAdavantage frequent flyer account and credit that flight to your AAdvantage account. Renting a car from Avis? Make sure you open an Avis Preferred account and credit that rental to your Avis Preferred account. Staying at a Hilton hotel? Make sure you open a HiltonHonors account and credit that stay to your HHonors account. You get the idea.
These loyalty accounts are all free to open and are simple to use. All you need to do is either sign in before you make your bookings, or enter your loyalty number where appropriate when booking. What’s even better is that most of these loyalty accounts actually make your booking process quicker since they will prefill the required information based off of your profile. Not earning points for your travels is like leaving free or discounted travel on the table!
Determining Where You Want To Go
The next step is probably the most important when it comes to determining your credit card strategy – where is it that you want to go? A lot of people will just start opening credit cards with no real idea of where they want to go with the points and miles they earn off of those cards. When they finally figure out where it is they want to go, they find that the points and miles that they have worked hard to accumulate may not be ideal for maximizing the trip they want to take. If you start out with an idea of where it is you would like to go, it’s a lot easier to maximize your credit card strategy for that trip.
Don’t Know Where You Want To Go, But Want To Start Collecting?
If you really have no idea where it is you want to go, but you want to start collecting points and miles, then I would recommend you start with one of two types of cards: (1) Cards that allow you to use your points to cancel out travel related charges like the Barclay Arrival+ or the Capital One Venture Rewards card; or (2) Transferable currency points like American Express Membership Rewards points (“Amex MRs”), Citi ThankYou Points (“Citi TYPs”), Chase Ultimate Rewards points (“Chase URs”) or Starwood Preferred Guest (“SPG”) Starpoints. Now you may ask, why SPG Starpoints? Isn’t SPG a hotel chain? Yes, they are. But their points are also very flexible for purposes of not only booking award SPG hotel rooms, but also for transferring to airlines for your award flights. In fact, for every 20,000 SPG points you transfer to an airline partner, you will earn 5,000 bonus miles! That is quite the value!
I Know Where I Want To Go – What’s Next?
So you know exactly where you want to go – what’s next? Now you have two options. Option one is to start doing your research to see which airlines fly to that destination; which airline(s) will offer you the best deal for what you’re looking for; and lastly, what hotels are in the area that will fit your needs. Option two is to utilize the Points Jet Setter’s Credit Card Strategy and Analysis Consulting Service where we do the research for you and present a customized credit card strategy for your trip!
I Know What Airlines And Hotels I Need Points For, Now What?
You’ve figured out where you want to go. You know the best airline to redeem points on for that (hopefully business or first class) award ticket. You know how many miles and/or points you need to make the trip a reality. So what’s next? Well, next it’s time to start looking for the right credit cards to sign up for. Most every major airline and hotel chain has a credit card available that offers some kind of sign-up bonus for either just signing up for the card, or for meeting a minimum spend within a set period of time. Make sure you’re not forgetting to look at cards that offer transferable points like Amex MRs, Citi TYPs and Chase URs too!
OK, But Before I Apply, How Does This Affect My Credit?
A lot of people have the misconception that opening a new credit card is harmful to your credit score. The reality of the situation is that as long as you are responsible with you credit cards and pay your balance off in full every month (I recommend that you never carry a balance on your credit cards, if at all possible), your score will actually increase!
If you’re a student or someone with a very limited or weak credit profile, that’s OK too. You will just need to start slow and small with sometimes less rewarding cards to help build your credit profile up.
It’s important to know the factors that make up your credit score.
35% of your credit score is made up of your payment history;
30% of your credit score is your credit utilization;
15% of your credit score is your credit history;
10% of your credit score is made up of the types of credit you use;
10% of your credit score is your request for new credit.
When you apply for a new credit card, the credit card company does an inquiry which is commonly called a “hard pull” on your credit report. The hard pull will temporarily lower your credit score by ~2-5 points, but that lowering will be temporary and will generally be outweighed by the benefits to virtually every other component of your credit score. This means that even though your score may reflect a small decrease right after you apply for a new credit card, it will generally rebound within a month or two, if not sooner. As long as you keep your credit utilization under 10% and make your payments on time, you should not see any negative effects on your credit score from applying for rewards credit cards.
If your credit score is around ~720 or above, you should have no problems getting approved for most any of the credit cards in our monthly Top 10. My credit score has actually gone up fairly substantially from where I was before I started applying for credit cards regularly – but that’s also because I am responsible with my cards and pay off my balances in full every month.
I’ve Got The Card(s) I Need, What’s Next?
MAKE SURE YOU HIT THE MINIMUM SPEND if there is one. I cannot stress this factor enough as there are countless stories of people who missed out on their sign-up bonuses because they made a mistake and didn’t meet their minimum spend. No one wants to leave 50,000 points on the table! The most important card in my wallet is always the card that I’m trying to meet a minimum spend on. It pays to be organized when it comes to this. And remember, credit card annual fees generally do not count towards your minimum spend requirements!!
I’ve Got The Points I Need, How Do I Book My Trip?
So you’ve figure out where you want to go, you’ve picked the right cards, you’ve met the minimum spends and the points and miles are just burning a hole in your account – great! So how do you book your awards? You have two options. Option 1 is to look for award availability that works for you and book those flights and hotels yourself. But sometimes more complex award redemptions like first class on Cathay Pacific using AAdvantage miles or first class on Lufthansa using Aeroplan miles can be more difficult. That’s where option 2 comes in – utilizing the Points Jet Setter’s Award Travel Consulting Service where we do the research for you, present you with a list of the options available, and even will book the trip for you if you so desire!
My Award Trip Is Booked, What Else Do I Need To Do?
First off, get excited!! Then go and pack your bags (and hopefully your passport). The last step is to board the plane, take your seat (hopefully in a premium cabin) and enjoy a pre-departure beverage of your choice knowing full well that you saved you a ton of money just by signing up for a few credit cards!
Hopefully this brief overview helps shed some light on the overall points and miles process. Make sure to check out my Blog regularly for reviews of airlines, hotels and airport lounges, as well as updates on the best credit cards for earning points, miles and status. Remember, if you need help redeeming your points or miles or want some advice on a credit card strategy to help bring your next award trip closer, check out my Award Consulting page.
If you have points, miles, airline, hotel, lounge or credit card questions that you haven’t been able to find the answer to, feel free to contact me through the Contact TPJS page and I will try my best to answer your questions!