Bottom Lining Traveling on Points
What is Traveling on Points?
When you sign up for a credit card they often come with a sign-up bonus (SUB) or welcome offer. The welcome offer will read something like “earn 60,000 points after spending $4,000 in 3 months”. Those 60,000 points are worth at least $600 towards travel or sometimes closer to $1,000 or more, depending on how you redeem them. The $4,000 you need to spend is called the minimum spending requirement. The idea is that you sign up for a credit card, complete the minimum spending requirement, get the points, redeem the points for flights and/or hotel nights, go on a nearly free vacation, and repeat! That’s how my family and I have been able to take so many dream vacations.
Types of Credit Cards
There are 3 types of credit cards. Cashback cards which offer you cashback from purchases. Co-Branded cards such as southwest and Hyatt which earn points to be used with the brand (i.e.. Southwest or Hyatt). The third type of credit card is the Transferrable Points cards such as the Chase Sapphire Preferred and the Capital One Venture X cards. Transferrable points cards are the “gold standard of points” because you can transfer them to a variety of hotels and airlines. For example, the Chase cards transfer to Hyatt, United, Jet Blue, IHG and the list goes on…
What is the Chase 5/24 rule?
Chase has the best (IMO) credit cards when it comes to points. Chase has a rule called the 5/24 rule. The Chase 5/24 rule says if you have opened 5 or more new credit cards in the past 24 months, from any bank, you will not be approved for a new credit card from Chase. This is important because Chase issues many of the best travel reward credit cards available with the best sign up bonuses. Because you only have 5 spots every 2 years, it’s important to be mindful of which cards to start with to get the most bang for your buck. That’s where I come in, I’ll help you pick your first few cards to make sure you have a solid foundation of the “best” cards.
Annual Fees
It’s important to note, most these cards come with annual fees. Luckily, a lot of them wave the annual fee for the first year of the card. Most annual fees range from $69-$100. Some premium cards have annuals fees up to $695. These premium cards are not cards I would recommend in the beginning, most of the cards I would recommend first have lower annual fees ($70-$100) How will this affect my credit score? This is a VERY common concern and I hear. Credit is an important thing! The following five things each make up a portion of your credit score. Payment history – 35%. Credit Utilization – 30%. Credit age or history – 15%. Account mix – 10%. How diversified is your credit? Home loans, credit cards, etc. Account inquiries – 10%. This is where I’ve seen a very minimal fluctuation in my credit. Sometimes it will go down a few points after I open a card but will bounce back extremely quickly. I am not a financial advisor, but my credit score has hovered around 820 since I began opening cards and I have heard many others say the same!
How can I find my 5/24?
Go to www.creditkarma.com If you don’t already have an account, click “Sign Up for free” in the top right corner Go through the necessary steps to create an account and then login to your account Click on “Credit”. Note: *Credit Karma may not be an accurate representation of your credit score, your FICO score may differ* Then click on “Accounts” From here, you can see all of your accounts Click on each account individually to look at the information Click on “Report Info” to get to the information you need Look at “Opened” for the date you were approved for the card. If this date is within the last 24 months, it counts towards your 5/24. Look for your longest account, this determines your credit history so be sure to never close this account.
Is this a good fit for me?
Credit cards have extremely high APR’s and I do not recommend starting this hobby unless you are confident you can pay off the balance of your credit cards every month and not over spend. The first thing I do when I get a new card is to set up the automatic monthly payments to ensure I am paying the balance of in full every month and not paying interest. I recommend starting with a card that has a low minimum spend to see if this would work for your circumstances. Also, you have to be able to be approved for a credit card. Your incomes, credit score etc. have to meet the requirements of the bank.
What can a Travel Coach do for me?
Everyone who starts this hobby is unique and has unique goals. One person’s goal may be to travel internationally in business class several times a year and another person’s goal may be to get as many free hotels as possible for youth baseball tournaments! As a coach, I put YOU first, I truly listen to what you want out of points and miles and am invested in helping you make that happen. As an adult educator, I know how adults learn. I start with the basics and build off that each session all while you experiencing earning points with the cards I select for you. I will build a great foundation for you to be able to do this on your own for years to come