Over the years I have had almost every kind of credit card you can think of.. except Discover Card. I usually value rewards points or airline miles more than a cash back credit card. The reason is a cash back card will only give you about a 1% return while with a miles or rewards card, you can often get a higher rate of return.
For instance American Express rewards points can be transferred to one of their partners for a bonus. British Airways has offered 50% bonuses for any points transferred from AMEX to BA, which would give you a higher rate of return. Delta has also offered 25%-50% bonuses in the past. When you transfer 100,000 rewards points to your Delta account during one of these promotions, you would end up netting 150,000 airline miles if the promo transfer rate was 50%.
With 150,000 airline miles with Delta, that would give you about 6 free economy tickets. How much would 6 free tickets be worth? Well that depends on where you live and where you plan on flying to. I have gotten tickets from Seattle to Alaska for 25,000 miles when ticket prices were $550. That means my 6 free airline tickets would be worth about $3,300. If I took a cash back credit card and took back 100,000 points in cash, I would have only gotten $1,000. Sounds great, until you do the math and figure out the cost of airline tickets vs. the cash back option.
With the Chase Sapphire Credit Card I can either take cash or transfer my miles to participating partners. I took advantage of the Chase 50,000 rewards offer a few months ago and easily met their minimum spend requirement of $3,000. We placed a lot of spending on the card over the past 2 months and have 62,500 rewards points.
Or we can transfer our points to one of these Chase Ultimate Rewards partners:
Not only can we transfer points to one of these partners but they also offer a good number of gift cards. Since my wife and I are traveling to Seattle for a wedding in June (Our tickets where free of course and in First Class), having a number of rewards points in our Chase account will allow us to either have a free car rental for the week or pay for most of our hotel cost. The partner hotels we could stay in are all located in Seattle, 30 miles too far from where we need to stay, so we will be taking advantage of a gift card to another hotel.
The best part of this deal.. it was free!
I registered for the Chase Sapphire credit card, got instantly approved, received the card and met the minimum spending requirement of $3,000 within 3 months. Our points are sitting in our account waiting to be used.
This trip to Seattle would have cost my wife and I $2,362 and will now cost us about $560. Airline tickets from Anchorage to Seattle for June cost about $600/each (thanks to the high tourist season), hotel near the wedding location cost $886 for the week and car rental cost $276 for a total of $2,362. Our airline tickets are paid for and were free as we redeemed 45,000 Delta Skymiles each for first class ($1,200 tickets/each) and $600 of our hotel will be paid for with our Chase Ultimate Rewards points, leaving us with the car rental and part of the hotel bill to pay.
See, anyone can do what I just did. Its a matter of learning the system of using credit cards in your favor. My wife just got the Chase Sapphire credit card which comes with 40,000 bonus points and I will probably be signing up for the Chase Ink card within the next few weeks.
The key to having success with credit card churning is to know what your end goals are.
Are you building rewards points for a future trip? Do you need rewards points to pay for a hotel? A car rental? How about for emergency travel or maybe you just want to get away and travel to some far way destination? With the internet its so much easier to research and know what it will cost in terms of money and either rewards points or airline miles. Every airline or every hotel has some type of rewards program and you can search for rooms or flights based on points or miles.
A few months ago I knew I was going to need to travel and didn’t want to spend too much of my money on a hotel or airline tickets. I explain in this post why I was willing to spend 45,000 Delta Skymiles for a first class ticket, when normally I try to save those miles for long distance first class flights.
Not only did my Chase Sapphire credit card help us save $600 just in our hotel expenses but the card itself is probably the coolest credit card I have ever owned. I have had credit cards since 2001 and having a card like the Chase Sapphire card has really been an experience. Kind of sounds funny? How could you have an experience with a credit card? Every where I go, EVERYONE has to say something about the card. Did you know the credit card is actually made of metal? Its a heavier credit card and everyone notices.
How can you do what I just did?
Its easy! Obviously you need a decent credit score so you can be approved for a rewards credit card and then its just a matter of meeting the minimum spending requirements to earn the bonuses. We knew we could easily meet my wife’s new Chase Sapphire Card spending limit because we have to get our new yard installed here in Alaska. The cost of the lawn would easily allow us to meet 2 of these spending requirements, giving us $800 cash back or 80,000 rewards points to use at hotels, car rentals or with free airline tickets.
The information given here is for entertainment purposes only. Use credit at your own risk. Seek a qualified financial adviser for any financial advice.