Strategy 1: Strategic Credit Card Signup Bonuses
We all know that you can earn outsize value VERY easily if you just sign up for every credit card under the sun, so I won’t dwell on this point very much.
However, being strategic about signing up for new cards can be a great way to maximize your spending.
Let me give you an example.
Let’s say you have a major purchase coming up. It could be a wedding, renovations on your home, expensive appliances, furniture, or anything else.
If you know you’re about to spend a ton of money, a great way to get outsize value is to coordinate that spending with a good credit card welcome bonus, especially one that requires a level of spending that you otherwise wouldn’t have.
I always recommend this for couples who are planning weddings. What better way to spend your honeymoon than on a FREE, luxury vacation that you paid for with points you earned from all of those expensive wedding costs?
According to The Knot's 2021 Real Weddings Study, the average wedding in the U.S. cost $28,000 last year. There are a number of cards out there right now that are offering welcome bonuses of 100,000 points or more for spending $2,000-$5,000 dollars. I'll let you do the math, but you could be traveling long past your honeymoon if you play your cards right with that amount of spending.
This strategy can also be combined with some of the other strategies I’ll mention below. |
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Strategy 2: Authorized Users
In case you didn’t know, most banks allow you to add “authorized users” to your credit cards. This means that other people can have a credit card in their name, but linked to your account - meaning YOU earn all of the points from their spending.
Most people add their spouse or kids as authorized users to cards, but I have a different approach. I add my friends as authorized users on my cards. These friends fall into two categories:
- They don’t care about travel rewards (crazy, I know) and are happy to help me pursue my travel goals.
- They don’t have good enough credit to get a card of their own.
The second category is where things get fun for BOTH parties involved. For someone who is unable to get a credit card of their own, having an authorized user card allows them to both build their credit AND purchase things that typically require a credit card instead of cash or a debit card such as rental cars, hotels, and more. It also gives them certain travel perks, depending on the card.
For example, if you were to add a friend as an authorized user on the card that I shared with you earlier this week, they would have unlimited lounge access at hundreds of airport lounges around the world.
It's important to make sure you only do this with close friends or family. At the end of the day, you're on the hook for anything they spend money on. So make sure you're not giving out a card to someone who will behave recklessly... Here is an example of who you should not add as an authorized user:
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Helping friends build their credit is great, but it’s really a win-win because you earn all of the points from their spending. Usually, the banks make it pretty easy for authorized users to create an account, see their charges, make payments, and more.
So as long as you do this with friends or family members you can trust completely, it’s an excellent way to rack up double, triple, or quadruple the normal number of points you might earn from your own spending every month.
After a few years of your authorized user building good credit, they can join in the fun with credit cards of their own, which is ultimately good for everyone.
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Strategy 3: Retention Offers
Banks love money. The way they get money is by getting customers. That means that if a bank LOSES customers, they'll lose money. And they hate losing money. That's why they’ll incentivize customers to stay by offering them, you guessed it, free points. Let’s walk through what this looks like:
You open a new card and get amazing value out of it in the first year because of the excellent welcome bonus. But when the annual fee hits for year 2, you realize that the card doesn’t provide much value without that bonus. So you decide you want to cancel it. You call the bank and explain that you’re not getting value from the card and you want to close it.
As long as you’re in good standing with the bank and you’ve been putting regular purchases on the card, there’s a chance that before letting you cancel your card, the bank will offer you something in exchange for keeping it open for another year.
This could be points, statement credits, annual fee waivers, or other things. It differs for every customer and every card, so there’s no formula to determine exactly what to expect. Generally speaking, banks want you to stay, and they'll do what they need to do to keep as many customers as possible.
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But also, there’s also no guarantee that you will get a retention offer at all.
I’ll give you an example: let’s say there are two customers with a big bank out there. Person #1 has 10 cards open (yes, some of us psychos have that amount of cards open), pays their bills every month, keeps a low credit utilization, and puts a ton of spending on each card. They're the dream customer for the bank.
Person #2 has one card open. They also pay their bill and keep a good utilization, but don’t put a ton of spending on their card - just a few hundred dollars a month.
Who do you think is more likely to get a retention offer?
If you said person one, you’d be wrong much of the time. Why? The bank doesn’t need to incentivize them to stay because they’re confident that the customer will stay anyway. After all, they have TEN cards - It’s highly unlikely they’ll be leaving anytime soon. Plus, they put so much spending on the other cards that, even without the card in question, they are an extremely profitable customer.
Person number two, on the other hand, is much more likely to get a nice retention offer. If they follow through with closing their only card, the bank loses them as a customer and may not get them back. Therefore, the bank wants to do everything it can to retain them.
This example just illustrates how the "power users" of credit cards aren't always the ones who get the best retention offers. Having said that, I've gotten retention offers myself and know plenty of other frequent travelers and credit card junkies who have as well.
It’s important to know that you shouldn’t close any credit card or attempt to get a retention offer until you’ve held the card for at least one full year. Otherwise, you risk being flagged by the bank, which we don't want.
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Strategy 4: Be A Travel Agent
Okay, I’m not talking about literally becoming a travel agent (although if that’s what you want to do, go for it).
What I mean is to trade your time for points and miles by offering to plan and book trips for other people.
My friends all know that I’ve taken a few trips in my day, and frequently come to me for travel advice.
So I offer them a deal: I’ll plan out the entire trip for them, make all the bookings, and send them a nice tidy PDF itinerary.
The catch?
I get all the points. I book things using my accounts, shopping portals, credit cards, etc., and have my friends pay me back.
Most people do not enjoy the booking and planning aspect of travel as much as I do and are happy to have the entire process taken off of their plate.
So basically I’m trading my time for free travel. To make things even better, I’ve timed things like this with credit card signup bonuses as well. Between spending multipliers on travel purchases and a good, healthy signup bonus, I’ve earned hundreds of thousands of points from just one or two of these types of trips, without needing to spend a cent of my own money.
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Strategy 5: Portals, portals, portals
In past newsletters, I’ve mentioned shopping portals a number of times. Basically, portals allow you to earn points or miles for making normal, everyday purchases online.
Different portals have different businesses and rates, but it’s usually easy to find a portal that will give you points, miles, or cash back for any big brand.
Personally, I use Rakuten most often. They have a huge library of businesses, and also give you the option to earn either cash back OR Membership Rewards points, which can then be transferred to other airlines and hotels. I also frequently use the Aeroplan portal since I fly with Air Canada so often. Most big U.S. airlines have their own shopping portals, so you can take your pick.
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I also make an effort to purchase things online whenever humanly possible. If I want to buy a piece of clothing from a store, I’ll always try to buy it online and select in-store pickup, even if the store is 2 minutes away from my apartment. A single purchase won’t earn you a ton of points, but over time these things really do add up.
This applies especially to large purchases. For example, last year I needed to buy a new iPhone from Apple, along with a few accessories. Rather than just show up at Apple and buy the phone, I checked my preferred shopping portals every day, waiting for a good bonus.
Eventually, the Aeroplan shopping portal had a promotion for 10x points on Apple purchases. Because of my elite status with Air Canada, I also earn an additional 2x points on purchases made through the portal.
So this important $1,500 purchase ended up earning me a total of 18,000 points from the portal, plus 1,875 points from the credit card I used to make the purchase which earned 1.25 Aeroplan points per dollar. I used this card specifically because it also has purchase protection benefits, essentially giving me an extra cushion in the event that I lost or damaged the phone.
All in all, I earned 19,875 Aeroplan points from this purchase, worth about $400 in free travel. That’s essentially a 27% return on my purchase, all for using the right portal at the right time.
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There are plenty of other ways to earn points, but I won’t go into depth on them. Here are some quick hits:
- Use the right card: make sure you’re using the card that earns you the best multiplier for the type of purchase you’re making.
- Travel: Whenever you travel with an airline or at a hotel, make sure you have a frequent flier or loyalty number so you can earn points for it.
- Promotions: When you see a big promotion, take 30 seconds and register for it, even if you don’t think you’ll use it. If you do end up staying at the right hotel or flying with the right airline, you’ll be happy to get the accidental bonus points.
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Wow, that was a doozy… I know this was a pretty tedious newsletter, but I hope you found some value in these tips. I am not sure why there were so many cat memes today, it's just how things worked out during my meme hunting.
If you follow my coordinates at the bottom of every email, you’ll know that I’m basically flying somewhere new every few days, frequently using points and miles.
I need to be pretty aggressive with my points-earning strategies to subsidize this amount of travel, and I wanted to show you that there are plenty of ways to earn points aside from being rich, spending tons of money on travel, or signing up for a dozen credit cards at once.
If you adopt the mindset of trying to earn as many points as possible from your own spending and the spending of those around you, you’ll see your points balances increase pretty quickly.
Your friends might get annoyed with you at first, but they’ll relax when they get to stay in a 5-star resort on a beach somewhere for free 😉
Do you already use any of these strategies? Are you a fan of these more focused "deep dive" newsletters? Are you a cat person or a dog person? Let me know by replying to this email or reaching out on social media.
Doviđenja,
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