Looking out at the end of the dock

How Credit Cards Can Save You a Small Fortune

With just three years and two months to go until I’m in position to abandon Corporate America, I can see a little light at the end of the tunnel. Around this time in late 2019, I’ll be gearing up for my next gig, which will still involve a lot of work, but *I’ll* be the boss, and the work will be much more engaging for me.

Avoiding big expenses and unnecessary upgrades, like fancy cars and large homes, is key for gaining the freedom to choose your field of work, or even fully retire early. But sometimes big expenses are hard to avoid. One of our big expenses is travel. We enjoy travel a lot, and look forward to getting out of the cold just once during mid-winter.

Enter, the plastic

One of the best tactics I’ve employed to seriously minimize our travel costs is to make use of credit card sign-up bonus points. If you’ve got a good credit history (700+ FICO) and a decent household income, you can generally get approved for multiple credit cards on an ongoing basis. I have a stack of plastic as thick as a deck of playing cards to prove it.

Just this past year, we were able to save/avoid roughly $3,000 in airfare, rental car, and hotels. This was made possible by using the bonus miles from new credit card sign-ups. My secret weapon? I refer often to travelsort.com, a blog run by Hilary Stockton. She offers fantastic in-depth advice on which cards provide the best rewards, and strategies for maximizing points. Check out her site, and bookmark it.

Keeping track of it all

The first bit of advice I can offer up is to keep a detailed spreadsheet. This will help you to manage both your credit card bonus programs, and frequent flier mile programs in the same space. Here is a snapshot of the credit card / frequent flier log that I maintain to keep track of my minimum spend, annual fees, and points:

Be Frugal about it

The second and most important advice is to avoid using credit card bonus points as an excuse to jet around like a rock-star. Travel is costly, and just because you can get “free airfare” from time to time with points, doesn’t mean you won’t pay for meals, transportation, park passes, and hotels, etc.

We visit two sets of grandparents who live at opposite time zones, once a year, and it adds up. Build up, bank, and use points judiciously. Know this truth: The optimal use points is to transfer them to air miles programs.

Points help us keep our travel costs low, and that’s fine by us. If you get super-sophisticated with credit card bonus points, you could certainly travel in style all over the world. Hilary at travelsort combines points with her husband to accumulate over 1,000,000 points per year! If I can accrue a quarter of that, I’m a happy camper.

Tactics for growing your points

In order to get your bonus points, you need to put a minimum amount of spend on the new card within 90 days. That clock starts ticking the day your new card is approved. We try to put as many of our expenses as possible on our cards to meet the minimum, on-time.

My spreadsheet is really handy for tracking where we’re at within the minimum-spend 90-day window. Larger expenses like taxes (income and property) can be paid with credit cards. If you have a business, like rental properties, maintenance costs can be paid by a business credit card.

The best cards to start with

I recommend first getting the Chase Sapphire Preferred (or even better, the Chase Sapphire Reserve), and then transferring your Chase Ultimate Rewards points to domestic frequent flier programs like United or Southwest. You can also save good coin by picking up a travel rewards card like the Barclaycard Arrival Plus. You get $400 worth of travel credit bonus after spending $3,000 on airfare or hotel within the first 90 days.

Not a bad deal, just for following the rules, paying your statement in full each month, and keeping track of your credit card bonus programs. One other key thing to note is you can combine Chase Ultimate Rewards points among multiple business and personal lines. We pool a lot of points between my and my wife’s businesses as well as our personal card.

By making effective use of available credit card bonus programs, we save nearly $3,000 per year on travel costs. That same amount invested year over year 20 times is about $130,000.

It pays to be aware of credit card bonus programs. It pays infinitely more to learn how to maximize them.

Comments 8

    1. Honestly I haven’t found it to be much hustle. I carry no more then 2 cards at a time and cycle on to the latest bonus card. The rest sit in a drawer. I wouldn’t advise juggling 20 card bills each month. I make about 3k a year on credit card cycling like the author. We use the money for paying our planned trips to various vacation spots and sometimes for gifts for others.

    1. Great point, Dennis. There certainly is a little bit of that “ease of use” factor involved. And to your point, you can easily be swept up into “what do we -need- to buy to hit our bonus spend limit?” Caution is well-advised.

  1. I’ve always been intrigued by the credit card hacking game, but never really had the guts to dive deep into it. I guess I’m with some of the others, that it looks challenging to juggle more than 3 cards.

    I notice a lot of the cards have an annual fee. Clearly they offer the best rewards… do you just cancel before the fee comes due. Or do the rewards typically far outweigh the fee that you just eat that cost.

    Also, are there any cash rewards cards you recommend, or are the travel miles cards far and away the best choice?

    P.S. Looks like a sweet spreadsheet. Are you sharing?

    1. Hi Adam! I have a few cards with annual fees I hang onto – Chase Sapphire and Chase Ink Business. Other cards get cancelled before the fee is due. For cash reward cards, I’m a big fan of the Costco Citi and Amex Blue Everyday. Those two are our common use for us. For travel miles, go with Chase – the synergies that allow you to combine Ultimate Reward points, even with business cards, is highly useful. Let me know if you’re still interested in the spreadsheet!

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