How the Banks Want You to Travel the World for Free!

How the Banks Want You to Travel the World for Free!

Gary Leff – View From The Wing

Daraius Dubash - Million Mile Secrets

Thank You Chase!

Thank You Banks!

How many have rewards credit cards?

How many?

How many miles did you earn with them last year?

- Credit Cards

- Debit Cards

- Shopping

- Dining

- Banking/Investing

- Promotions

- Asking nicely!

- Partners

- Flying

Earning Miles & Points

Credit card sign-up bonuses are the

EASIEST way to earn hundreds of

thousands of points.

1 MILLION+ miles/points in

2011 from 16 credit cards!

1 MILLION+ miles/points in

2011 from 16 credit cards!

Million Mile Secrets Credit Score

Only 240,000 Miles to the Moon

Have a mortgage in the next 2 years

Do NOT Apply for Credit Cards If You…

Can Not pay your balance in FULL each month

Do NOT Apply for Credit Cards If You…

- How it works

- Sign-up for card and get sign-on bonus (25K to 100K)

- Usually have to spend a minimum amount, e.g $3,000 in 3 months

- Then what?

Earning Miles & Points – Credit Cards

What is the average household income in the US?

$50,000*

*2010 US Census

- Spend everything you earn, you’ll get only 50,000 miles/points

- Pay-off is with the sign-up bonus, NOT everyday spending

Earning Miles & Points – Credit Cards

- Churning is key!

- Get same card again (YMMV):

Earning Miles & Points – Credit Cards

How to Evaluate Credit Cards?

1) Big Sign-up Bonus

- E.g. 100,000 Point British Airways

- 50,000 Point Southwest

3 Reasons to Get a Credit Card

2) Most Rewarding for Actual Spending

- E.g. American Express Starwood earns 1.25 miles

- E.g United Club Card earns 1.5 miles

3 Reasons to Get a Credit Card

3) For The Benefits

-E.g. American Express Platinum

3 Reasons to Get a Credit Card

Spending on Cards with no/low NET cash outflow - Amazon Payments $1,000 per month free

Spending

Spending on Cards with no/low NET cash outflow - Vanilla Reloads & Bluebird

Spending

Spending on Cards with no/low NET cash outflow - William Paid for Rent - Charge Smart for loans Pre-Paid Cards - Wells Fargo - US Bank Visa Buxx

Spending

Will my credit score go down?

3 Credit Bureaus

FICO Score: 700+

Credit Score

- Will my score go down?

- 3 credit bureaus

- Credit score: credit history, types of credit, payment, utilization, inquiries

- 2 to 5 points decrease per application

- But available credit increase, so credit score may increase

- Monitor your credit score (Credit Karma/Sesame)

- Do what you’re comfortable with

Earning Miles & Points – Credit Score

Free Credit Score

App-O-Rama (Example)

Every 3 to 4+ Months

- Different Credit Bureaus

- Business + Personal

- Plan for Minimum Spending

- Call reconsideration to get approved

- 3 to 4+ months

App-O-Rama Planning

- Don’t need an established business

- Selling stuff on ebay etc.

- Use SSN as Tax ID number

Business Cards

How Many Cards?

Do what you’re comfortable with

OR

- Not approved online

- Max out available credit or too many inquiries

- Call Reconsideration Department after applying

- Relationship, Credit Worthiness, Business Info

- Good reason for wanting card

- Show that you’re not a credit risk

- Hang Up and Call Again!

Reconsideration

- Retention

- Citi great at offering incentive to keep card

- I’m “thinking” of cancelling card - Annual Fee - Benefits

Earning Miles & Points – Retention

Best Deals (Sign-up Bonus):

- 2 Citi AAdvantage cards for 50,000 miles each

- Use 2-browser trick - 100,000 miles = Business Class to Europe/South America

Earning Miles & Points – Credit Cards

Best Deals (Sign-up Bonus):

- 2 Chase Southwest cards for 50,000 points each - 100,000 out of 110,000 points needed for Companion Pass -Chase United Explorer

- 55,000 miles after $1,000 within 3 months + $50 credit

Earning Miles & Points – Credit Cards

Best Deals (Sign-up Bonus & Spending):

-Chase Sapphire Preferred

- 40,000 sign-up bonus, 2X points on dining/travel, no forex fees, TRANSFERABLE to United, Hyatt, British Airways, Southwest etc.

-Chase Freedom

- 10,000 sign up bonus, but 5X points on certain categories (gas, groceries, etc.). Points transferable to hotels/airlines if you have Chase Sapphire Preferred.

- Chase Ink Bold

- AMEX Starwood Preferred

Earning Miles & Points – Credit Cards

1) Transferable Points

2) Airline/Hotel Cards

3) Cash Back

3 Types of Credit Cards

• Flexibility, flexibility, flexibility!

• Sharing points with family/friends

• Transfer partners = options

• Don’t forget about partners of partners

• Don’t put all of your eggs in one basket

The Case for Transferrable Points

1a) Chase Ultimate Rewards

Types of Credit Cards -Transferable

1:1 transfer partners with Continental, United, British Airways, Korean, Hyatt, Marriott, Priority Club and Amtrak

You can combine points with anyone else

No fees when transferring to airlines!

You can transfer to anyone else

Points post right after statement closes

No transfer bonuses (yet)

Chase Ultimate Rewards

Current offers:

Sapphire Preferred: 40,000 after $3,000 spend within 3 months. $95 annual fee waived the first year.

Ink Bold: 50,000 after $5,000 in 3 months. $95 annual fee waived the first year.

Chase Ultimate Rewards

1b) American Express Starwood (SPG)

Types of Credit Cards - Transferable

1c) American Express Membership Rewards

Types of Credit Cards - Transferable

• Earn 1 point per dollar spent (Premier Rewards is 3x on airfare and 2x on gas & groceries)

• Points go into pending status for a month after statement close (can be expedited)

Membership Rewards Basics

• Transfer to anyone!

• Link (not enroll!) their account to your account membershiprewards.com -> Points Summary -> Bottom right

• Advance points for free, just earn them back

• Up to 60,000 for Platinum

• 15,000 for most other cards (not corporate)

• Buy points at 2.5 cents each, up to 500,000 a year!

Flexibility

Recent bonus opportunities

Delta: 50% and 25,000 MQMs, 40%, 30%, 20%, 10%

British Airways: 50%, 40%

Virgin Atlantic: 15% El Al: 25% Iberia: 20% Aeromexico: 25% Starwood: 50%

Transfer Bonuses

Mercedes Benz Platinum- 50,000. $495 annual fee

Platinum- 25,000. $450 annual fee

Premier Rewards Gold- 25,000 Pts. $175 annual fee waived first year

Bumping bonuses debacle

Look out for targeted offers!

Current Sign-up Offers

Perks : - Free bags - Priority boarding - Less miles for redemptions

Types of Credit Cards – Airline

Best Deals (Sign-up Bonus):

- 2 Citi AAdvantage cards for 50,000 miles each

- Use 2-browser trick - 100,000 miles = Business Class to Europe/South America

Earning Miles & Points – Credit Cards

Could be worth paying fee for: - Free night certificates - Elite Status - Discounted award redemptions

Types of Credit Cards –Hotel

Types of Credit Cards – Cash Back

- 1 to 2% on purchases - ~5% on categories - Easy to understand - Good for coach travel - $5,000 business class ticket = $250,000 spending

- $80,000 spending on AMEX SPG = 100,000 AA Miles