Hi. My name is Rick, and I am a PointChaser. I’d probably be considered an “old time PointChaser”. I got my first travel rewards credit card in the last century (1989), a Northwest Airlines card.
With 73 counties visited, four around-the-world itineraries completed, a blog founded, written for five years and sold, I’ve had the opportunity to watch this hobby ebb and flow for thirty years now.
Hopefully, I can help the newcomers shorten the learning process, pass on some of my successes and mistakes for more experienced players. And maybe suggest a few ways to maximize your returns for all skill and experience levels. Let’s start at the beginning:
Who should be playing The Game?
For years, I thought only those with good credit and discipline could safely take advantage of the rewards offered. Those are still two important factors in determining your level of play. But the game has now taken on techniques where those without high credit scores can earn a few extra bucks as well (come back for the next post).
The ultimate player, with the most avenues open to them, is someone with a credit score over 700+, that pays off their existing credit card debt In Full every month and has a system or spreadsheet for keeping track of their hobby activities. Statistics tell us that represents less than 50% of the American adult market. Which half do you fall in? Knowing and admitting the truth will go a long way to your success.
Credit card sign-up bonuses
Credit card sign-up bonuses have consistently been the most lucrative method of accumulating frequent flyer miles and points since the game started. That is not going to change, as the average American applies for only one or two credit cards in their lifetime.
If a bank can entice you to be one of Their Clients, they will earn merchant fees on your every transaction for years to come. In doing so, they will more than recoup the value of the original sign-up bonus they give you. As hefty as it may seem. Here’s some math:
If a credit card sign-up bonus costs a bank $500 to entice you, and you spend just $10,000 per year on your credit card, they will earn somewhere between $250 and $350 per year in merchant fees collected from retailers that accept your credit card. It doesn’t take long for them to recoup their initial outlay.
When you add to that interest on your unpaid balances and an occasional late fee, you can see getting your sign-up for one of their cards is very profitable indeed.
How you can play The Game
We can short circuit that income stream for banks by applying for cards and meeting their minimum spend requirements to collect the sign-up bonus. Then put that card in the sock drawer and get another new card with another new sign-up bonus.
It won’t ruin your credit. My wife and I have applied for and received over 300 credit card sign-up bonuses. Our credit scores are still in the high 700’s. My personal credit report with Experian is 278 pages long.
It takes discipline to only take on what you can keep track of, how often you can meet a minimum spending requirement and pay off the balance In Full each and every month. I like to think of it as us leveling the playing field. If a bank wants our continued business, they should continue to give us valuable rewards, not just at sign up.
As you go along in this game, you’ll find some credit cards are good for long-term rewards and worth keeping. Others are one shot in the dark cards. Make sure you know the difference.
Next Up? A technique for those that use Debit cards
About Rick Ingersoll
Rick Ingersoll is a long term travel hacker, manufactured spender and all around frugal kinda guy 😉 In his past life, he owned a mortgage banking firm specializing in helping first-time homebuyers. He helped the local Veterans office with the Vet’s credit questions, taught “Credit and Collections” at his local community college. In his second career, he founded the Frugal Travel Guy blog in 2007. He sold the blog to Internet Brands in 2012.
Rick was also instrumental in starting the Chicago Seminars, which brings together experts in the frequent flyer community to address an annual crowd of more than 500 participants. At one of those seminars, he was featured in an ABC Nightline program that brought the idea of travel hacking to the masses. The segment was so popular it was rebroadcast two additional times.
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