What’s the Point?  

Actually, there are a lot of points.

So we have been using credit cards that earn points for a long time now.  While we are not novices to building up points I do not consider myself a ‘travel hacker’ by any means.

My eyes were opened up more when I had some time on my hands due to a company reorganization.  I found the website of The Points Guy and poked around a little until I realized I could earn a lot more points by adding and then switching credit cards.

NOTE – If you cannot manage debt you should NOT even entertain trying to earn points using credit cards.  Credit card debt is the easy path to financial jail not financial freedom.  If you do not have the financial means or the mental conditioning to pay off your credit cards every month, do not try this. 

Even with our first credit cards, and with some heavy guidance from my dad, we always paid off our credit card charges in full, every month. 

When we first moved to Texas my job had me doing daily trips from Houston to Dallas or to New Orleans.  Southwest Airlines had the best availability and also the smaller airports they used had quicker service.  I signed up for their Rapid Rewards program to start earning points for travel.  

I then came across the Visa Rapid Rewards credit card.  Similar to today, you earn points for purchases and if you purchased enough you earned bonus points.  Between the actual flight miles and the additional credit card there were a few years we earned a Companion Pass with Southwest.  

At the time we were younger.  Back then we had two young boys and the adventure of travel was a fun thing.  We did not mind the fact that with Southwest there were not direct flights on longer travels. We tried to make it a game to race from one gate to the next and there were many times we were the last ones boarding the flight.

Fast forward a number of years and it started not being so much fun.  I was not working for a company that had me travel much so my Rapid Rewards diminished.  So we started flying Continental (now United) for direct flights.  I also picked up a Visa Mileage Plus credit card (again with the bonus points).

For a long time, we just used the credit card for as many purchases as possible (did I mention we always pay off in full?) and accumulated miles.  With the occasional flights we would wait a while to build up enough miles to then cash in on domestic flights.  

With time on my hands recently I started taking another look at credit cards and earning points.  That led me to looking at strategies people were using to earn bonus points on multiple cards.  All this led me to sign up for a new Chase Sapphire Card.

In the span of five short months I earned 112,000 points and expect at least another 15,000 soon.  Most of these were bonus points.  I received 50,000 for spending $4,000 in the first 3 months.  I earned another 30,000 for spending $20,000 (which I had to do in 12 months).  Finally, I earned 5,000 points for adding authorized users.  I am still expecting another 10,000 points for ‘referring’ Mrs. r2e to sign up for her own card.

I learned many things along the way that I want to pass on to you.

First, as I mentioned, if you cannot pay off your credit cards every month, in full, do not sign up!  Going into debt to earn points does not make sense.  ‘Nough said.

Second, make sure you know what the annual fee is on your credit card.  Some entry level cards have no fees.  However, most the the cards with big bonus points have an annual fee around $100.  They may waive the fee in the first year but they will charge you after the first year is done.

Third, if you choose to have a lot of cards come up with a system to keep track of them.  I only have a few cards so this is not a problem for me.  Why keep track?  Two reasons:  a.  To keep track of spending towards points and b. To keep track of annual fees coming up.

Fourth, some banks have premium level cards (with annual fees) and also entry level cards (with no fees).  As you get closer to your first anniversary when they charge you an annual fee, you may be able to ‘downgrade’ to an entry level card with no fee – and maintain access to the points.  Just call your bank/card issuer to talk about it.  Most banks want you, even if you just have the entry level card.  An example of this is Chase bank where they have the Sapphire card ($95 annual fee) or the entry level card called Freedom (with $0 annual fee).

Fifth, if you do get a new card, maximize bonus points by timing your purchases.  Change to the new card when you have some big (and normal) upcoming purchases coming due.  For instance, when we got our new Sapphire cards I timed it with our annual insurance premium that was coming due.  This is a routine and normal expense so why not?  We did not increase our spending above our normal spending to get the bonus points.  

Sixth, use your personal cards to pay for healthcare expenses.  Many Flexible Spending Accounts (FSA) or Healthcare Savings Accounts (HSA) have credit cards linked to the FSA/HSA account directly.  While this is convenient, you will miss out on points.  Put those co-pays/deductibles on your personal credit card and then fill out some paperwork to submit it to your FSA/HSA plan to be reimbursed.

Seventh, check all your bills to confirm who accepts credit cards for payments.  Not everyone will.  This was a little bit of a challenge but we eventually figured it all out.  There were some surprises (our local City accepts credit cards for our water bill) and some disappointments (our mortgage company would not accept credit cards).  Maximize the opportunities.

Eighth, calculate the cost of using a credit card or cash.  In the Seventh step, we reviewed our cell phone service.  They provide a discount for autopaying from our checking account so we set that up.  I have looked at the cost of losing that discount versus points we could earn and right now the discount is a better option than points.

Ninth, pair up your credit card points with an airline or hotel program.  When we flew Southwest we paired that up with a Rapid Rewards credit card.  When we changed to fly United we paired that up with a Mileage Plus credit card.  Recently when we added the Sapphire card, I made sure we could transfer points from the Sapphire to my United Mileage Plus program (which we can).

Tenth, read the fine print.  Know what bonus points the card is offering and what it takes to achieve them.  Also, most cards have a lot of other benefits that you might find come in handy so be familiar with other benefits the cards offer (at no additional cost).

If you really want to get into serious travel hacking mode, check out these websites that go into a lot greater detail and compare cards and programs:

The Points Guy



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