Introduction to “Hacking” and Getting Points
Introduction to Credit Card "Hacking"
I’ve had a United Airlines credit card for more than 30 years, and I've gotten great use out of it. I’ve used my United credit card to get hundreds of thousands of United points and have used those points to get (nearly) free airline tickets that have taken me and my daughter all over the world. Yay me!
But I recently realized that I haven’t been optimizing my credit card use. I have been leaving lots of opportunities to travel for (almost) free or at a hugely reduced cost on the table. (Boo me!) In other words, my United card has been great, but I could have been doing much, much better.
That’s right, I recently discovered travel credit card “hacking” and have become obsessed. I’ve been joking with my friends about how it has become my new religion, and I am an evangelist.
Of course, my evangelism has prompted questions, so this article is the first in what I anticipate will be a series of articles about my new religion. This first chapter will be an introduction to racking up lots of travel points by credit card “hacking.” Subsequent articles will address topics like how to use your points, point optimization strategies, and getting points through business cards (“business” being a very loosely defined term).
(BTW: Despite the often-negative connotations of the word “hacking,” “hacking” in this context is just a term of art. All of this is 100% legal. It’s not like I would jeopardize my bar membership by doing or recommending something that is even remotely questionable from a legal perspective. So, don’t get turned off by the terminology.)
The Very Big and Very Important Disclaimer™
Before I evangelize my new religion, I need to SHOUT OUT A WARNING.
I can’t emphasize enough that travel credit card hacking is not for everyone. In fact, it’s probably not right for most people.
So, here’s the most important warning:
DO NOT EVEN CONSIDER TRAVEL CREDIT CARD HACKING IF YOU DO NOT PAY YOUR CREDIT CARDS IN FULL AND ON TIME EVERY MONTH.
IN! FULL! ON! TIME! EVERY! MONTH!
I am dead serious about this. If you can’t or don’t have the discipline to pay your credit card in full and on time every month, stop reading this now and get back to your life. Interest and late fees on credit cards will eat up any benefits you can get from hacking, and then some. So, just don’t do it unless you have the wherewithal and discipline to pay in full and on time every month. Amen!
Travel credit card hacking is probably also not right for you if you would have trouble putting $4,000 to $6,000 dollars in expenses on a credit card over a three-month period. To really optimize getting points, you will be signing up for cards to get their sign-up bonuses (“SUB”). (More on that later.) Most standard SUBs have minimum spending requirements of $3,000 to $6,000 over a three-month period – sometimes longer but those are pretty standard numbers. Some premium cards with exceptionally high bonuses require even more spending.
For me, meeting the SUB requirements for non-premium cards is not an issue. I pay for EVERYTHING possible with my credit card as long as I will not get charged an additional fee for using the card. (I’ve been doing that for decades to get United points, so nothing has changed for me on that front.)
Between my extortionate health insurance premiums and other everyday expenses like groceries, gas, utilities, travel expenses etc., meeting non-premium SUB requirements is never a problem for me. But if you would be buying things you don’t need just to meet the minimum SUB spending, you should not credit card hack. Period.
Also, if you’re going to need a new mortgage or large personal loan in the next year or two, don’t credit card hack until after the loan has funded. Mortgage companies do not like customers who have recently opened a bunch of credit cards.
Transferable Point Cards vs. Co-Branded Cards
Now that you have read the Very Big and Very Important Disclaimer™ and decided that you are still interested in hacking, you need to understand the difference between transferable point cards and co-branded cards. This is where I made one of my biggest decades-long mistakes. (The biggest mistake I’ve made is described in the next section.)
As I said up top, I have had a co-branded United card for over 30 years. I spent money and got points that I could use to book travel through United. It’s been great, but I could have gotten so much more.
Co-branded cards are credit cards that are tied to a specific airline or hotel – like my United card. The points you earn from those cards can only be used with the program offered by the brand of the airline or hotel.
Transferable point cards are cards that are not tied to a specific travel provider. Generally, they are issued by banks like Chase, Capital One and American Express. Each bank has its own travel card offerings which allow you to transfer points to their partner airlines and hotels. Chase, for instance, partners with United, KLM/Air France, British Airways, Southwest, Marriott and many others.
So right up front, one of the benefits of having transferable points is that they can be transferred to many partners instead of tying you to a single partner like my United card. The transferable points allow you to shop around for the best deal. So transferable card points tend to be more valuable than co-branded card points.
Getting Lots of Points Through Sign Up Bonuses (“SUB”)
So, you may be asking, “But if I sign up for a card, will I get enough points to book travel?” The not-so-secret way is to get new cards with sign up bonuses (“SUB”) and to do that over and over with different cards. My biggest credit card usage mistake has been not taking intelligent advantage of SUBs.
Let me give you an example. Chase offers a transfer points card called the Sapphire Preferred. Under the current offer, if you get a Sapphire Preferred and spend $4,000 on it during the first three months after opening the card, you will get 60,000 ultimate rewards points.
So, what can you get with that? As I write this, I’m seeing a round trip economy class ticket from San Francisco to Rome for 60,000 points plus $48. (To be completely transparent, the Sapphire Preferred has a $95 annual fee, so all-in your cost would be $143 for a round trip ticket to Rome, but that’s still a ridiculous bargain.)
It's time to get your card, get your points and get yourself to Rome!
(BTW: If you’re ready to sign up for a travel card, please use one of my credit card referral links. Credit Card Referral Link (homepagenotfound.com) I can earn bonus points at no cost to you.)
So now that you have depleted your points with your super-cheap ticket to Rome, what do you do to get more points? You open another card! You could open a Capital One Venture Card that will give you 75,000 transfer points for spending $4,000 over 3 months for a $95 annual fee. (It’s not my first recommended card because it doesn’t have United or Southwest as direct transfer partners, but it still has great partners like Air France/KLM, British Airways, and Virgin Red.)
Rinse and repeat.
And what about if you want to travel with your spouse/partner/bestie? 60,000 points will only get you one round trip ticket to Rome. The answer: Get a referral code of your own and get your spouse/partner/bestie to open their own card. They’ll get the same deal, and you’ll get a referral bonus! (Or you could give your spouse/partner/bestie my referral code.)
One more thing, you can usually use household income when you apply for cards, so if you’re not working outside the home, but your spouse is, you can usually use your joint household income to apply.
Of course, there are limits on how many personal credit cards you can open before the banks say “stop.” Chase has a rule that if you have opened 5 personal cards in the preceding 24 months, you will not be approved for a 6th card until 24 months from the date you opened the earliest card. So, choose wisely, and check Experian to see how many cards you have opened in the last 24 months. (Of course there are other limits based on your personal circumstances, but the 5/24 rule applies to everyone. Cards that you’ve had for more than 2 years don’t matter for these purposes.)
If you have opened a lot of personal cards in the last two years and aren’t eligible for another personal card right now, there may be a work-around for the 5/24. Stay tuned for the upcoming chapter on business travel cards.
But Wait! Won’t I Ruin My Credit By Opening Lots of Cards?
No! I can speak to this from personal experience because I was worried about the same thing. Granted, I have always had a really good credit score – probably because I pay in full and on time, have a long credit history, and low utilization. But my Experian credit score has actually gone UP since I started hacking. Last month (for the first time, I think), my Experian score hit 850. It doesn’t go any higher. I suspect the reason it has gone up is that the amount of my available credit has gone up as I’ve opened new cards while my spending has remained consistent, so my utilization has gone down. The low utilization rate has offset the tiny dings I have taken because of credit inquiries and new cards.
BTW: You do not need perfect credit to hack. You need good credit (best to have a score over 700 – which you can look up on Experian), but you don’t need perfect credit.
Of course, everyone’s situation is unique, so your mileage may vary. And as I said at the top, if you’re expecting to shop for a mortgage or other loans in the foreseeable future, you might want to wait to open any new card.
So Are You Ready to Get Started?
Click on this link to start your application for a travel credit card. Credit Card Referral Link (homepagenotfound.com) I will get a modest referral at no cost to you if you use one of my referral links.
(I know this sounds like a multi-level marketing scheme but it’s not. I swear. I would never do that. You will not have to sell anything or – for that matter – ever speak to me again, but if you’re going to get the card anyway, you might as well give me or someone else the modest one-time referral bonus. Also, I know you'll want to speak to me again. In fact, you'll probably call me from Rome to thank me.)
When you’re approved, start putting all your expenses on the card, and in three months, you could have enough points for your trip to Rome.
Send me a postcard from Rome and stay tuned for more information about getting and using your points!
