Important Links:
- Chase Sapphire Preferred card
- Chase Ink Bold Charge Card
- American Airlines Citibank cards
- Using American Express gift cards to meet credit card minimum spending requirements
A Few Credit Card Signups Can Fund Your Next Vacation:
Planning ahead and paying attention to miles is great, accumulating large balances strategically and having a big stash when it comes time to redeem, in multiple programs even, that means you have a choice of airlines to redeem tickets with and you increase your chances of getting the award you want when you want it exponentially.
But not everyone plays the game this way. Not everyone spends time in frequent flyer communities (I spend much time on Milepoint these days).
Now, most people don’t take advantage of the deals that loyalty programs offer. They just assume those programs can’t provide much value, or they’re too hard, or it takes too long to accumulate the points needed for travel. And when they do accumulate enough points, they immediately cash them in, the 25,000 mile domestic award still remains the most popular. I often see my job as convincing people to (1) pay attention and (2) delay gratification because I believe the rewards at higher mileage levels are much more lucrative.
But not everyone is patient, and not everyone has time to wait either, I do get a good number of people approaching me with, “I’m getting married in six months, I don’t have any miles, but I’d love to plan a dream trip. Is there anything I Can do?”
The answer, if someone is willing to pay just a little bit of attention and take action, is usually yes.
Because the banks want you to take international premium cabin vacations. On their dime.
Major airlines aren’t entirely in the travel business these days, their most profitable arms have very much been their mileage programs over the years and the biggest customers of those programs are the banks. United can reasonably be said to have continued operations through bankruptcy in order to support the underlying credit card business. A portion of each flight can be considered a bank charter reward flight. The miles being given out are truly huge.
So if you have good credit, you can get a few credit cards, and in short order have enough miles to travel in a style than most of us couldn’t otherwise afford on their own. It was really heartwarming back in April to meet an engaged couple in New York who were regular readers of Frugal Travel Guy and leveraged credit card signups for a dream honeymoon that two public school teachers couldn’t have ever dreamed about otherwise.
If you’re in that position, and based on current offers, here’s what I would do in short order. It’s just an illustration, because the specific trip you want will vary the advice somewhat, but the principles are the same.
Each person signs up for a Chase Sapphire Preferred card and a Chase Ink Bold Charge Card. Those two cards each have 50,000 point signup bonuses in the Ultimate Rewards program, those points transfer to United/Continental, British Airways, Hyatt, and several others. Both cards have fees waived the first year. The former awards the points after $3000 in spend, the latter after $5000. Boom, in short order each person has 108,000 points. That’s enough for business class from the US to Europe via United/Continental. It’s almost enough for a business class ticket to Asia on United/Continental, within striking distance where it could make sense to just buy the miles you need.
Here’s my longer discussion of why Chase Sapphire is my current overall favorite credit card, though for this discussion we’re really just interested in their signup bonus.
You could also just get two American Airlines credit cards from Citibank, each offering 50,000 miles. American charges 100,000 miles roundtrip for business class to Europe, 110,000 miles roundtrip for business class to much of Asia.
Then sign up for the Chase Sapphire Preferred and Ink Bold Charge Card also. Use those points for your hotel. Because those 216,000 points could be transferred to Hyatt, that’s nine nights at the most expensive Hyatt properties in the world with some points leftover. Or it’s even seven nights at the most expensive Hyatt properties in the world including daily breakfast and five dinners.
Now you’ve got your business class airfare and your luxury resort stay covered. All on points, two credit card signups apiece from Chase and two credit card signups apiece from Citibank.
You have to hit the minimum spending requirements on each of the cards, which is why you do want a little bit of lead time, though there are things you can do to help meet the spend requirements. I’ve written in the past about several and will do a followup post on that soon as well. In the meantime, here’s my discussion of using the purchase of American Express gift cards to meet minimum spend requirements.
But given enough time to meet the minimum spend on your cards, you can have a honeymoon, anniversary trip, or special vacation basically free (paying only for incidentals). Not bad…
(Note that the Chase Sapphire Preferred and Ink Bold Charge Card do earn me a referral credit if you use my links for them, while the Citibank American Airlines cards do not.)
Update: the offer for Chase Sapphire Preferred is 40,000 points.
What do you mean by “then sign up for the Chase Sapphire Preferred and Ink Bold card also.” Did you repeat the exact same cards twice?
@Eric I mean instead of just Ink Bold and Sapphire, you could sign up for two cards from Citibank with American Airlines and then ALSO Sapphire and Ink Bold.
Gary,
For those of us who have already hit Chase pretty hard, how does the business aspect of Ink Bold play into the approvals process? Does it count like the personal card, or is it a totally separate deal?
As I had a hard time getting approved for the Southwest card less than 2 months ago ( I had to sacrifice my long held Amtrak card) I still intend to stay low & hold off on the Ink card and apply for the new UA card for the mega bonus coming early 2012…hope it is not postponed yet again!
@Dan in my experience it’s somewhat separate
@Dan in my recent dealings with Chase reconsideration line, the 2nd level supervisor told me that, while the Ink Bold biz card isn’t reported on my credit reports (which of course report only personal cards), Chase *does* consider all existing Chase card accts (biz and personal) when reviewing a new application for another Chase card.
$8000 in spend per person in three months is likely to be pretty difficult for most people. Median personal income for adults in the US is about $24k a year, so $8k is more than three months worth of most people’s income even before they’ve paid taxes, housing costs, savings, and other expenses that typically can’t be charged to credit cards. Accounting for the latter costs, one can be well above average and still have difficulty with these spends, even if one spreads out the signups. The extra $3000 required for the AA Citicard would make matters even worse.
In the past one could order coins to make up for any shortfall on minimum spend requirements, but that’s not an option anymore. Unless you’re aware of other solutions for covering large amounts of minimum spend at reasonable cost, I don’t think the sort of strategy you describe is really feasible for most members of the group you claim to be targeting this advice for (e.g. public school teachers or other people who don’t travel often).
Great post…I recently posted on Facebook about a great trip to Bali and Australia I booked using pre-Avios BA miles…and a lot of people seemed interested and wanted to learn my “secrets”…I’ve posted this on my Facebook, and hopefully it convinces a few people to get into this game!
@Anon256 I’ve mentioned some of those techniques on this blog, and even in this post provide a link to one such discussion – no coins needed.
Buying Amex giftcards does help, but for most people it will take a LONG time to liquidate $8000+ worth of giftcard. Also this strategy is only possible if you have $8000+ of liquid savings to pay off your bill after buying the giftcards.
How bad is chase about someone applying for the ink business card without a business? Will they approve or do they want documentation?
For those with spend issues, buy precious metals and then sell back. An oz of gold is around 1800 bucks. Put them on the card, pay a bit extra for the privilege of doing so, and then sell them back after price goes up a few bucks.
There is obviously risk involved with the fluctuation of prices of the metals, however, if you are overall bullish on the stuff, this would be a no brainer way of reaching spend requirements.
Gary, You mention a possible use of Chase Sapphire points for seven nights including daily breakfast and five dinners. I assume the room is covered by converting to Hyatt points, but how do you use the Sapphire points for breakfast and dinner at the Hyatt? Hyatt gift cards?
Hey Gary, is there any amount of time that I would have to wait between applying for both of the Chase cards?
Also, do you think Chase would let me close my contactable and British Airways cards to make space for these two new ones? I currently have three Chase cards.
@Sarah I’m referring to Hyatt ‘Passport Escapes’ awards which cost additional points.
A couple of schoolteachers are very likely to have sufficient income to do this. From a quick Google search (with all the requisite caveats):
“…the national average for teacher salaries was $48,353 in 2008 and $49,720 in 2009”
So say $100K a year between them. Surely with medical copays, gasoline, car/homeowners/life/etc. insurance, cell phone, home phone, internet service, groceries, travel, health club fees, restaurants, charitable donations, heat, electric, water, etc. bills they could scare up most of $8000 in 3 months.
And if they have to float a couple thousand dollars for a month or two on the CC, that’s minimal interest considering the return.
@toomanybooks: The plan outlined in the post requires them to rack up $8000 in spend EACH, not between them, to get enough miles.
Ok, yes, Sorry. That makes it tougher. Might have to plan a year out in this case. Or pay expenses for a relative/ friend and get reimbursed. To get something worth thousands of dollars requires some effort.
@toomanybooks: If you’re planning a year out, it’s very likely that offers with lower minimum spend will come along in the meantime. Over the course of the past year CO, UA and others offered cards with 50k for first purchase, the amex PRG offered 75k for $1000 in spend, etc.