Category Archives: Credit Cards

Earning Miles with Credit Cards

A step back to a few basics, from all the various deals that have been posted lately.  In this post, I want to go more in-depth into one of the best tools at your disposal for accumulating miles quickly.  Credit cards and their signup bonuses.   We’ve previous covered some of the basics of credit card churning, but I’d like to go into more detail.  Most of you have probably encountered airline specific credit cards.  They usually come with an annual fee between $60-$100, and typically net you 1 mile per dollar on most purchases, and bonus miles on purchases with the airline.  While this is a way to build up airline miles, I don’t think it’s necessarily the best way.

In my previous post, I discussed rough valuations of miles based on what type of flights you take.  Let’s say you value your miles at 1-2 cents apiece. If you are earning one miles per dollar on say, the United Mileage Plus Explorer card, you’re getting roughly a 1-2% return on your card.  But to have this card, you pay an annual fee of $90 (check?).  While it’s nice that you’re getting miles and traveling for free, you could honestly find a cash back card that gives you better values.  Most cash back cards offer 1% on general purchase, but have categories where you could be earning 3-5% cash back per dollar, with no annual fee.

However, the United Mileage Plus Explorer card comes with a bonus of 40,000 (or 60,000 miles, if you are a Mileage Plus elite member (see end of post) ).  If you take that account, you are earning miles for as low as fractions of a cent.  At that rate, it is definitely worth getting the card, AND paying the annual fee (if it isn’t waived the first year, which a lot of cards do).

I would like to digress a moment, regarding credit card annual fees.  Yes, I agree that annual fees are terrible, a seemingly unnecessary expense, and if you get a card with an annual fee purely for the signup bonus, you have to somehow remember to cancel your card before the fee comes up again or else you’ll get charged again.

However, consider what you’re getting out of the annual fee…at least one free domestic trip that is generally worth much more than the annual fee (maybe even the annual fee twice over).  It’s hard to dispute the value there.  Yes you will have to remember to cancel the card if you don’t want to pay the annual feed again, but I think with today’s technology, you can set your self email, calendar reminders, etc., there’s really no excuse.  Personally, I keep a spreadsheet where I keep track of all the cards I’ve applied for, the dates I applied for each, the amount I’ve spent on each, and a few other things (if there is enough demand, I’d be willing to post a blank version of that for people to use themselves).

Another point on canceling cards with annual fees, despite how easy it makes things to just cancel the card after the bonus miles post, you should avoid doing this.  It does not look good to the bank issuing your credit card if it looks like you just opened a card for the bonus, particularly if you develop a pattern of this.  Banks may blacklist you if you do that too much.  In fact, some cards or banks explicitly prohibit doing this in the terms of their condition.  Generally, it’s best to keep a card open for at least 6 months before canceling, and when you do call to cancel, it’s not uncommon for the bank to offer you retention bonuses to keep you as a customer (sometimes including thousands of bonus miles on the spot).

So whether or not using a card such as the United Explorer card is worth it in your situation, there are several programs out there that allow you to earn points that are transferable to a wide variety of programs that are much better options than confining yourself to a single mileage or hotel program.  These programs are the Starwood Preferred Guest (SPG) program, the American Express (AMEX) Membership Rewards (MR) program, and the Chase Ultimate Rewards (UR) program (covered by Mommy Points).  Stay tuned for upcoming posts on all of these programs!  That’s all for now….

-ffc

A few good deals (and credit cards!)…

Got a quick post on a few good deals…

Million Miles Secrets posts about getting 500 free Hawaiian Airline miles for connecting your Twitter account to your Hawaiian Airlines account.

Also, you can currently get 1,500 United for a (now $25 minimum) purchase at Gilt Groupe.  It’s only for new members though.  However, I’m sure most of us also have multiple email accounts that have not registered on Gilt yet.

Also, this a little bit older, but Million Mile Secrets had a post on a couple of good credit card deals

A Credit Card Churn by View From The Wing

Following up our recent post on credit card churning, View From The Wing is out with a post on a recent credit card churn that netted nearly 200,000 miles.  Combine that with his recent post on taking a dream vacation on credit card signup bonuses, and you can see how with a bit of attention, those bonus miles can really count!

Acknowledgements to Gary at View From The Wing for these two excellent articles.

Credit Card Churning for Miles!

One of the quickest and easiest way to earn a lot of frequent flyer miles is churning credit cards.  What is churning?  The miles and points credit cards we’ll look at here generally give you some amount of bonus points for signing up, and in some case, spending a certain amount of money on the card within a certain amount of time.  For many of these credit cards, you can apply for these credit cards over and over and get the bonus miles each time.  However, in the past couple of years, the banks have started cracking down on this, so for many cards, you have to wait approximately about two years after cancelling before you can apply and get a bonus again.  There are still a few exceptions, cards which you can churn every 3 months and get a bonus.

Before you begin, keep in mind that churning cards does affect your credit.  As Rick of Frugal Travel Guy says “Your credit is your most important asset.”  If you are thinking of buying a house in the next two years, you should be careful about applying for too many credit cards (or credit cards at all), because even a small change in your credit score could affect the interest rate you are charged on your mortgage or your ability to qualify for the loan you need.

When churning cards, the short-term effect on your credit score is less than 10 points per credit card application.  In the long run, as long as you pay your bills on time and in full each month, credit card churning will not negatively affect your credit score.

And what can you get for all this trouble?  Anywhere from 500k – 1  million miles per year if you churn credit cards smartly.  That is enough for twenty free domestic tickets in coach, or about five free business class trips to Europe!

Eventually we’ll take the time to post a detailed strategy for credit card churning here.  But for now here is a link to a great article about credit card churning on the Million Mile Secrets blog:

Are you ready to Churn Credit Cards?

 

Chase Credit Card Reconsideration line

This post jumps ahead a bit for all the beginners, but I’d like to go ahead and cover it.  The Chase reconsideration line has been thoroughly blogged about in the miles community, but I figured I would share my experiences.  All the major credit card companies have reconsideration lines you can call if you ever have a credit card application denied.  I recently applied for the Chase Ink Bold Business card which is a charge card.  It features a 50,000 Ultimate Rewards bonus for spending $5000 on it in 3 months.  The offer on this card has actually just been refreshed on Monday November 28.  It still offers the same bonus as before, but now also offers 5X points on certain types of business spending (office supplies, wireless, cable, telecommunications, among others), and 2X on gas and hotel purchases.

Anyway, when you call the business reconsideration line, they will generally ask you for details about your business (it can be a business you’re trying to start), and if you already have a lot of credit with Chase they will either ask (or you can suggest) taking some credit off your other credit lines and reallocating it to opening a new credit card.  For example my application for the Ink Bold was deferred (the actually message I got when I applied said something about processing).   I had a Chase BA Visa card that I wasn’t really using anymore, so I asked them to take some of the credit line from that and open an Ink Bold account.

Chase tends to be very flexible with these things so it’s always worth following up with them on your applications.  The number for the Chase reconsideration line is below, courtesy of Darius at Million Mile Secrets, who has a very thorough post about the Chase reconsideration line.

Chase Credit Card Reconsideration

  • 888–245–0625 connects directly to a personal card credit analyst
  • 800–453–9719 connects directly to a business card credit analyst
  • 888–609–7805 connects to the application status department

 

You can find a link for the Chase Ink Bold application as well as other great offers on the Credit Card Offers page

UPDATE:  Thanks to Chris for also sharing his experiences in the comments:

“I recently was declined for the Chase Southwest Visa.  The rejection letter said that I had two many accounts open with Chase.  (I have three other Chase credit cards.)  I called the reconsideration line and offered to cancel one of the other cards.  The Chase Customer Service rep said she would reopen my application and take a look at it.  She asked a few questions about my income, then said she could approve me if we reduced the size of the credit lines on my other cards.  I was happy to do that, and I got approved.  The whole process was easy and painless.”