Beginner’s Guide to Free Travel & Rewards

Congratulations! You found the single most important page I have created. The Beginner’s Guide to Free Travel & Rewards. I know the sheer amount of information can be overwhelming for those just starting out so I created a step by step guide to explain how to maximize airline, hotel and credit card rewards to get you to your dream destination faster than ever!

The premise is that airlines, hotels and credit card companies value you and your business! They want you to become loyal to their company, their brand and use their products. These companies will create loyalty programs and many times give away free points, flights and hotel rooms just for the chance to do business with you. By understanding the benefits and limitations I can show you how to maximize these bonuses for free travel!

Here is my step by step beginner’s guide to free travel and rewards.

 

Step One: Sign Up for Loyalty Programs

Signing up for loyalty programs is the first step. It’s easy, quick, free, and will get you on your way to accruing points.

How do you know which loyalty programs? While at this point I’ve become a member of almost every loyalty program, for those new to the hobby, I would recommend signing up for at least the major airline and hotel loyalty programs in your country.

If you live in the United States I would recommend starting with:

• Airlines: American, Delta, United, Southwest, Alaska
• Hotels: IHG, Hyatt, Marriott, Hilton

There are many others too, and you can easily sign up as you progress. Here is a list of all major airline, hotel and car rental loyalty programs.

Since its free for virtually every loyalty program, there’s no reason not to create an account with every airline you fly and every hotel chain you stay at.

 

Step Two: Join AwardWallet

With all these programs, you will need a way to keep track of all your miles, points and free stays. The simplest way is to use an online mile/point manager. My favorite and the one I have the most experience with is AwardWallet.

Some others are Points.com, Usingmiles.com and Tripit.

These websites automatically pull data from your loyalty programs, keep track of your point balance, expiration date, loyalty member number and many other useful tidbits.

I know you’re saying to yourself that you just want to get to the free flights already! Why mess around with all this other stuff? While it may seem like a lot of work in the beginning, I promise that as you expand, you will need a way to keep track of everything. This is the way to do it.

 

Step Three: Understanding Credit Cards, Credit Score and FICO

While purchasing flights and hotel rooms with money will earn you points with each loyalty program, the fastest way to free travel is by signing up for credit cards with amazing bonuses.

While this is the best way to obtain free travel, this is also the part that worries people. There are many myths to signing up for credit cards. Doesn’t it look bad to have multiple credit cards? Won’t my credit score tank when I start opening new accounts?

Based on my personal experience (20+ active credit cards open with an 800+ credit score) and extensive research, I can tell you that many of these credit card myths are untrue.

As a word of caution however, you need to be responsible with credit card spending and payments. Otherwise the interest you will end up paying offsets any bonuses you may receive.

This may not be for you if you don’t:

• Pay your entire credit card balance off every month
• Pay your bills on time
• Have a credit score of >700 (preferably >740)
• Closely track your credit card balances

If you have never had a credit card before, it is unlikely that you will be approved for some of these top level cards offering high bonuses. In that case you may need to apply for a no fee credit card without a bonus to build your credit first.

Before you apply you need to know your FICO score and understand how it is calculated.

As a general overview:

• • Your credit score is comprised of 5 factors: payment history, amounts owed, length of credit history, new credit, credit mix.
  • The two most important factors are payment history and amounts owed, making up 65% of your credit score. The good thing is that if you are responsible, make your payments on time and pay off your balance in full every month, you are well on your way to having a great credit score!
  • Each time you open a new credit card or have a “hard inquiry”, your credit score does fall a small amount, usually 1-5 points. This is because the new credit card is affecting your new credit and length of length of credit history.
  • However your credit score will return to normal (and in many cases even increase) as the age of that account and your other accounts increases (length of credit history).
  • The best way to maintain a good credit score is make your payments on time, pay off your balance in full every month, have a low credit utilization (aka the amount  you owe is low compared to your credit limit), and have some long term credit card accounts.

Check out this post for a great overview of FICO Score.

 

Step Four: What Cards to Sign Up For?

Ok now that you understand more about how your credit score is calculated and how opening new credit cards will affect your credit score, what cards should you sign up for?

Most beginners will have had <5 new credit cards opened in the last 24 months, and some are even at 0. The reason this is important is Chase’s 5/24 rule where you will automatically denied for many of their top cards if you have 5 or more new credit cards from ANY company in the past 24 months. This is very unfortunate as Chase cards have some of the best bonuses out there!

This is why I recommend those new to the hobby to get Chase cards first (specifically the ones under the 5/24 rule). I would even go as far to say as get 5 Chase cards before getting a card from any other company.

My recommendation would be a combination of:

• Chase Southwest Premier and Business (to qualify for the companion pass, one of the best deals in travel!)
• Chase Ink Business Preferred
• Chase Sapphire Reserve
• Chase United Explorer

*FYI a new Chase rule only allows you to have at most one personal Southwest card, and either the Sapphire Reserve or the Sapphire Preferred. You cannot have two personal Southwest cards, or both the Sapphire Reserve and Sapphire Preferred.

Exactly what combination depends on how many new cards you have opened in the past 24 months and what your travel goals are.

If you always travel with a partner, getting the 2 Chase Southwest cards is a no brainer! By getting the signup bonuses from these cards when they are each 60K, you are awarded the coveted Southwest Companion Pass, the best deal in travel! Any time the owner of the pass travels on Southwest, their companion flies for free! Even if the ticket is booked using the 120K points you earned! The value obtained from opening just these two cards can be ~$4000 in free Southwest flights. 

As of when this guide was published (and recently updated), the Chase Ink Business Preferred was offering 80K signup bonus, so I highly recommend this card as well. You can apply and be approved for the business card even if you don’t think you own a small business!

The Chase Sapphire Reserve has a 50K signup bonus, but comes with a $450 annual fee. The $300 annual travel credit can be used twice in the first year of owning the card, and after that effectively drops the annual fee to $150. Additionally your points are more valuable, worth 1.5 cents/point in the Chase travel portal and you get access to Priority Pass Lounges around the world.

The Chase Sapphire Preferred also has a 50K signup bonus but has a lower annual fee $95. Your points are worth 1.25 cents/point in the Chase travel portal and there is no lounge access.

I generally recommend the Reserve over the Preferred due to the better redemption in the Chase travel portal and the free lounge access (for only an extra $55 per year), but it depends on what your travel goals are.

One important thing to note is that the Chase Hyatt, IHG, Ritz Carlton, Marriott Business, British Airways, Aer Lunguis and Iberia cards are not subject to the 5/24 rule, therefore do NOT apply for these in the beginning as you can get them later.

Other than that, the cards you get will need to be tailored to what your goal is.

I generally recommend applying for cards when the bonus has been increased, or is its highest ever off. This is very important for AMEX cards where you are only allowed a bonus once in your lifetime. For an overview of which cards are offering high bonuses check out this site. 

Check out my Guide to Credit Card Application Rules to better understand how each credit card issuer restricts sign up bonuses and how often you can be approved for cards.

 

Step Five: Earning That Bonus!

To get the signup bonus you usually need to meet a spending requirement, usually between $1K – $5K over a period of several months. During this time I put almost all of my purchases on this card to meet the requirement. Make sure not to overspend as the interest you will have to pay offsets any points you will have earned.

If you need ideas on how to meet minimum spend check out these sites (1, 2)

Keep in mind that you may have slightly less than the stated time frame to meet the spend requirement. This is because the credit card company frequently starts counting from the day you open the account, not when you actually receive the card. You also want to meet the spend requirement at least a few days before deadline because it may take a few days for the charges to actually post to your account.

Once you meet the spending limit, the bonus will usually post a few days to weeks after your credit card statement cycle closes.

 

Step Six: Learn How to Redeem Travel Awards

Once you have the points, this may be the most complicated part about travel rewards. While hotel points and free nights are relatively easy to redeem, airline rewards can be pretty complicated.

A few very important points to note:

• Chase, AMEX, Citi, SPG points can be transferred to other loyalty programs, making these points very versatile and valuable.
• Once these transferrable points are transferred to a certain loyalty program (Alaska Airlines, American Airlines, Hilton etc) they cannot be transferred back.
• Using airline points/miles means that you are using those points to book a flight on that airline or any of the airlines partners. You will need to need to understand point redemption and routing rules for the airline whose points you are using. You are not transferring those airline points to another airline to book the flight. The best way to understand this is through an example
• Using AA points, I can book a flight on AA, or any of AA’s partners (British Airways, Finnair, AirBerlin etc). However I will need to look up the AA award redemption chart and understand AA routing rules on award tickets. Even if my flight ends up being on AirBerlin or another partner, I will need to call AA (or book on AA.com) to book the flight and use AA points. I will NOT be transferring my AA points to AirBerlin to book the flight. AirBerlin is not involved in the transaction at all. Their only involvement is when you call them to choose your seat assignment and to fly the plane once you have that comfy first class seat 😉
• A good rule of thumb is I try to get at least 1.5-2 cents/point of value. Some points are worth less than 1 cent/point (Hilton, IHG) and others worth more than 2 cents/point (Alaska, Chase)

 

Step Seven: What Cards to Keep and Annual Fees

While many cards offer $0 fees for the first year, keeping the card beyond that would require shelling out extra money. What cards to keep vs downgrade vs cancel is very dependent on what you get out of the card once the bonus has posted.

General Tips:

I recommend keeping most cards for 10-11 months and reevaluating then.

• This allows you to fully utilize the cards benefits
• Doesn’t raise a red flag as much as canceling just after the bonus posts
• May be offered bonus points or reduced annual fee as a “retention offer” to keep you as a customer. This is fairly common and has the highest percentage of success if you call during business hours and ask for the “retention” department.

Keep cards where the benefits outweigh the annual fee. The ones I keep:

• AMEX SPG personal and business for the annual free night certificates
• AMEX Hilton Aspire for the annual free night certificate (any Hilton in the world!), diamond elite status, $250 flight credit and $250 Hilton resort credit
• Chase Hyatt, IHG and Marriott cards for the annual free night certificates
• Citi Prestige card for its 4th free night benefit and lounge access
• Chase Ink Plus Business card for its 5x points on cell phone, internet and cable TV

Finally remember that if you really don’t want the card or the annual fee, downgrading to a no annual fee card is an option

• This keeps your credit line open (good for your FICO score) and does not require a credit inquiry
• The downside is that you will likely be ineligible for that card’s signup bonus
• Ex: I downgrade my Chase Sapphire Preferred to a Chase Freedom, I won’t be able to get the Chase Freedom signup bonus then, or even if I apply again within the next 24 months

 

Extra: Create a Spreadsheet

While not necessary, I also recommend creating a spreadsheet for a lot of the information I went over in this Beginner’s Guide to Free Travel. I have one spreadsheet for loyalty program information and a separate spreadsheet for credit card information. Remember that you will have separate logins for the loyalty program and for that program’s credit card! While it may not be much to keep track of in the beginning, once you progress beyond this beginner’s guide, it can be a lot to remember. Save yourself the headache and start early!

For loyalty programs, at a minimum, you want to to keep track of your login information, loyalty program number and point balance. As above in this beginner’s guide, AwardWallet will keep track of most of this information for loyalty programs, but some find it easier to read in a spreadsheet.

For credit cards, you want to at least keep track of of your login information, approval date, date and amount to meet spend requirement for bonus. It may also be helpful to keep track of annual fees, yearly bonuses/free nights and category spend bonuses.

 

This beginner’s guide to free travel and rewards is meant to be a start for those new to the points hobby. Keep reading and learning, and your dream vacation will be closer than you thought 😉

 

Some Useful Links

• http://pointsandmilesbeyondhawaii.com/points-miles-101/
• https://thepointsguy.com/guide/beginners/
• http://travelstrong.net/travel-hacking/