In case you did not read my recent post concerning my 3 week trip to Hawaii (read about it here), while I did use a timeshare for one week of the trip, I failed to obtain a timeshare for the other two weeks and used A LOT of points in order to stay at the Andaz Maui.
I have written about the Andaz Maui before as it is a fantastic resort and a very worthwhile redemption for your Hyatt Points especially if you have Globalist / top tier status with Hyatt.
As you can see, I spent 315,000 World of Hyatt points for those stays and spent 22,500 United Mileage Plus frequent flyer miles per each family member for one way flights to Maui and 22,500 American Airlines miles per each family member for one way flights from Maui.
In total, I spent:
315,000 World of Hyatt Points
90,000 United Mileage Plus frequent flyer miles
90,000 American Advantage Miles
The total amount of miles spent for this trip was 495,000.
Doing the math, this is simply a ton of miles. While I did receive a $28,000 worth of hotel stays and probably $6,000 worth of airfare for this, it is simply a lot of points.
Accumulating Points / Frequent Flyer Miles
While we were at the Andaz Maui, I spoke to various people about their trip and inevitably a discussion would ensure about points. A lot of people were staying at the hotel on points and a decent amount were not. One question that kept coming up is how I accumulate my points / miles.
The easiest answer is generally credit cards. Credit card bonus have increased dramatically over the past few years as competition has significantly heated up in order to motivate credit card issuers to be at the top of your wallet. Credit cards get paid by the merchants every time you swipe the card and get paid for those who keep balances (NEVER KEEP A BALANCE!!!). The credit card issuers want you to use your card for every purchase.
Over the years, I have taken advantage of a lot of credit card sign up bonuses. It is generally the easiest and quickest way to accumulate a lot of miles. However, before you start applying for various cards, you need to have a strategy.
Credit Card Application Strategy
In this post, I took the position that the lucrative credit card sign up bonuses are on their way out and timeshares could potentially be the next frontier on cheap / luxurious travel.
The reason why I take this position was that in the past, you could simply apply for a credit card, get the bonus, cancel the card and reapply. It was a GREAT way to accumulate points. It wasn't too longer for credit card issuers to catch on this strategy and began making adjustments to their offers and limiting how many times you could get the bonus.
Before we get into the specific rules on various credit card issues, before you begin applying for cards, you need to know where you stand in terms of a credit score. I use CreditKarma which is a great FREE tool to receive your credit score. Take a look at your credit score so you know where you stand. 760 and above should put you in a good place to get almost any card you desire.
The other tool that I recommend is the Experian app. Here is the link for IOS. Experian also provides you with a score but also allows you to view your credit report and most importantly, what accounts you have opened and the when you opened them. This is important for the rules outlined below.
The reason that you need to know the amount of credit cards you have opened is because of a fairly new rule termed 5/24. This is Chase's rule where you will be automatically denied for any new application if you have opened up 5 new credit card accounts with ANY bank within the past 24 months / 2 years. When you apply for a Chase card, they will review your account and if you have more than 5 accounts opened, you will get denied regardless of your credit score, whether you a Chase Private Client Customer or whether you have millions of dollars in the bank with them. It is a hard rule.
The other important rule is from American Express. Instead of a 5/24 rule, they have a lifetime rule. If you have received the bonus offer for a particular credit card in the past, you are prohibited from receiving it again for your "lifetime". While I do not have any data points, a "lifetime" for American Express used to be considered 7 years but I do not know whether that is still accurate. Fortunately, American Express has rolled out a new tool so that when you apply for a credit card, if you are not eligible for the bonus offer, they will inform you BEFORE they run your credit.
Citibank has also implemented their own rules for their Thank You card. Basically, if you have received any sign up offer for their Premier Card, Thank You Reward Card or Prestige card within 24 months of opening OR closing an account, you are not eligible for the bonus. With Citibank, not only do you need to be aware of the opening date, but if you received a bonus offer 3 years ago, closed the account and attempted to reapply, you would be denied the bonus since you closed the account within 2 years.
The best strategy is to open an account, have it for 2 years, apply for a different variant of the card and close the previous card after you receive the new card. If you mess this up and close the card before you reapply, you will get denied the bonus.
There are other credit card issuers that all have similar rules. Barclays and Bank of America are others who have some type of similar restrictions. However, the vast amount of great credit card offers are generally offered by Chase, AMEX and Citibank. In order to try to keep this post readable, I am not listing the rules for Barclays and Bank of America.
Once you are aware of your score, how many accounts you have opened in the past 2 years and understand the restrictions in place, you should have a strategy in place to go forward and apply.
Since Chase has the most restrictive policy, I would generally start applying for Chase cards. This way you can avoid the automatic denial for having more than 5 cards. However, depending on how many you cards apply for, you will almost certainly be denied further cards for 5 years so you need to make the determination on how many to apply for as new offers constantly appear and you may be denied a stellar bonus if you have 5 or may applications.
An interested strategy that often seems overlooked at times is that if you are married, there are 2 people eligible for the bonus offer. It is not one per household but rather one per person. The best strategy for good offers is to apply for each spouse. You can accumulate double the amount of points. The other potential / questionable strategy that you can use is one spouse applies for the card and once approved, you can refer your spouse to apply for the same cards with additional bonus points. A simple but effective strategy to get even more points.
Personal and Business Cards
The credit card issuers make a lot of money off personal cards but they also want your business spend. There are personal and business versions of various cards. if you have a legitimate business with its own employer identification number, most business cards will not report to your personal credit report but if it is Chase, they will still review your report to determine if you have surpassed the 5/24. However, for future cards, the business card application will not count towards the 5/24 since it does not show up on your personal credit report.
If you do not have an EIN, you can still apply for a business card as a sole proprietor and use your social security number. You need to have a bonafide business but selling on eBay or doing some side gigs definitely qualifies. Business cards are a great way to add to your points / miles stash.
I have been doing the credit card application game for a while now which is why I have some many points accumulated. As a result, I am limited to the amount of American Express cards available to me and generally always have about 5 cards opened in the past 2 years which limits my ability to get new offers.
However, if I was to begin with a clean slate, here is what I would do. I would start by applying for Chase cards, both personal and business, and apply for up to 5 cards. I would then move on to American Express and Citibank.
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Chase Personal Cards:
The Chase Sapphire Preferred is a great card that generally offers 50,000 Ultimate Reward Points. This is a solid card to start.
The new Chase World of Hyatt card is a great card. While it was just offering 60,000 World of Hyatt points, it is now been reduced to 50,000. You may way to wait on this one. World of Hyatt points are great and this card gives you one free night in a category 1-4 hotel each year. This easily pays for the annual fee.
The Chase Southwest cards just came out with a great offer where you can get a companion pass after a $4,000 spend. There is a lot of buzz about this offer. A better strategy is to open a Chase Southwest Business Card where the introductory offer is 60,000 Rapid Reward Points and another personal card (in flight offers are currently 50,000 Rapid Reward Points) which would get you the 110,000 Rapid Rewards Points to obtain the companion pass for this year (2019) and NEXT YEAR (2020). However, I think that the companion pass offer is decent and had I not applied for the Priority card before the offer was extended, I would have taken advantage of it.
The Chase Sapphire Reserve is a good card but Chase restricts the bonus to either the Sapphire Reserve or the Sapphire Preferred. Either one is a good card but the Sapphire Reserve use to be offered with 100,000 Ultimate Reward Points and now just offers 50,000.
Chase Business Cards:
The Chase Business Southwest cards offers 60,000 Rapid Reward Points and is a great addition to a personal card if you want a 2 year companion pass.
TheChase Ink Preferred is a stellar card and offers 80,000 Ultimate Reward Points. This is a must get card for 80,000 Ultimate Reward Points.
Chase Ink Business Cash card is actually a great card. Even though it states that it is a cash back card, if you have another card that earns Ultimate Rewards points, you actually get Ultimate Reward Points instead of cash and while it can be redeemed for cash, you are much better using it for travel and particularly transferring those points to Chase partners.
American Express use to be my favorite card issuer but after a few denials for bonuses that was assured of receiving from multiple representatives and supervisors, I don't generally use them for much spend. However, they do have some great bonus offers.
The American Express Platinum Card is expensive but comes with various perks. Offers range from 25,000 - 100,000. 75,000 American Express Rewards Points or higher would be worth it for at least the first year.
The American Express Gold Card just went through some changes and can be a decent deal if you use the perks that come with it. A big plus is the 4x points on dining.
The American Express Everyday Card is not a great card but does not have an annual fee. It is one of the only cards that earns American Express Reward points without having a fee. The reason you want to have this card in your wallet is if you cancel some of the other American Express cards that have high annual fees, you will forfeit you points earned unless you transfer them out to another program or have another Amex reward point earning card. By having this no annual fee card, you can keep you Amex reward points even after you cancel other cards. It is great to have and could be useful for some spending.
American Express Business
The American Express Business Platinum card is another good card and while the fee is expensive, it could be worthwhile. Bonus offers vary for this card but it now currently 75,000.
The American Express Delta Skymiles Business Card has been offering some great signup offers between 50,000 and 75,000. Also, this card does come with one free companion airfare certificate which can easily make up for the $195 annual fee if used.
The Citi Premier Card is a good card that I keep in my wallet. 3x points on travel and gas makes it worthwhile. 50,000 sign up bonus is decent as the highest I have seen is 60,000.
The Citi Prestige Card is also a good card but it just got revamped. The fee went up and the perks went down. I do not recommend this card at the moment but if a worthwhile sign up offer comes along, it could be beneficial. There are no available applications at the moment.
The Citibank Aadvantage Business card currently offers 75,000 Aadvantage miles. I think that this one is worthwhile.
A lot of people will read this and be extremely worried that your credit score will be obliterated after applying for the amount of these cards. In actuality, you credit score will likely immediately decline but after a few months will actually go up. Your credit score depends on a number of factors but the two most important are paying on time and utilization.
Utilization refers to the amount of credit available and how much you use. If you have a $1000 credit limit and use $900 during a month, you are utilizating 90% of your credit which will cause your score to materially decline. If you have a $10,000 credit limit and use $900 during a month, you are using 9% of your credit which should positively impact you.
Essentially, having a lot of credit available to you through multiple credit cards but only using a small percentage will actually help your score. Between my wife and I, we have about 30 credit cards and both of us have an over 800+ credit score.
This post became a lot longer than anticipated as there is a lot of information to cover on this topic. While I attempted to be concise, there is a lot of knowledge to pass on in order to apply for credit cards with a good strategy. As you can see, the bonus offers of 50,000 to 100,000 per cards can be extremely worthwhile especially if both spouses apply for personal and business cards. It is not uncommon that you can easily accumulate 1,000,000 bonus points by simply applying for a combination of personal and business cards.
In some follow up posts, I will go into some more details on how I spend on my various credit cards and some additional beneficial ways to accumulate miles cheaply and easily.
The goal of the blog is to explain timeshares but if you want to truly maximize timeshare ownership, you should also have good strategies to obtain credit card points, hotel points and frequent flyer miles. Besides getting free flights to various destinations, many timeshare strategies involve using hotel points.
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