Earning 315,000 Credit Card Points in Less Than a Year

You’ve seen the stories about people who earn all kinds of free travel rewards with credit cards. But perhaps you think it’s too complicated or too much of a hassle. Or maybe you are worried about how applying for all those cards will affect your credit.

Is it really worth the trouble? Absolutely, says Brian Kelly, who started helping his family take free trips while he was only a teenager. In this edited excerpt from an interview with Kelly on my radio show, he shares how he has taken fabulous trips using reward credit cards – and how you can, too.

Gerri: Brian, I’d like to begin with how you got started and how you became known as “The Points Guy.”

Brian: It goes back to my childhood, actually. My dad was a seasoned business traveler and in the 1990s he took a job working from home. He didn’t know how to use the computer, so as the tech savvy member of our family I actually helped him book his travel. And one day, we were like, “Wow, we have all these frequent flyer miles. What do we actually do with them?”

Being the resourceful young fellow that I was, I decided to book us all on a trip to Grand Cayman when I was 13, using all of our frequent flyer miles and renting a house through VRBO. The total cost of the trip was $300 for airfare for six and the house was cheap. So every year, it was a father-son bonding (experience): “How can we up our game so we can go on these fabulous vacations every year?”

Where to Begin…

Gerri: For someone listening who has maybe earned points here and there but they haven’t really maximized them, where do you suggest they start?

Brian: The first thing is to know these aren’t frequent flyer programs anymore, they’re frequent spender programs. It’s all about how you spend every single dollar you spend. If you’re using cash or debit cards that aren’t earning you any points or miles, that’s the first step, really.

We all spend money. It’s really aligning that spend to the right credit cards. But even if you don’t want to get new credit cards, there’s still tons of different ways to maximize (rewards). There’s always a cost to accruing a mile or a point, and as long as you’re redeeming those points or miles for more than (the cost of) accruing them, you’re winning. That’s the first step.

But the credit cards are all the rage. You can just be getting new credit cards and not worry about any of the other methods if you play your cards right, no pun intended.

Gerri: Do you have any big scores? Any fabulous trips you took using reward points?

Brian: I’ve taken a lot of trips. I’ve redeemed millions of miles for myself, and family, and friends. The topper was this (past) January, I went to South Africa, business class. I used 110,000 US Airways miles, which I had accrued for about $100 through this grand slam promotion they ran a couple of years ago. It was business class, New York to Johannesburg, on to Cape Town. I did wine country, Cape Town, and then I went on to a safari. All said and done it was less than $2,000 for a $12,000 trip.

Gerri: Brian, I want to talk about credit cards, how you use them. One of the big concerns is, “What will this do to my credit?” When you see these great offers where a credit card company is offering 50,000 bonus points to sign up for a new card, do you bite?

Brian: If the offer’s juicy enough I will bite. While there are negative consequences towards getting a new credit line, getting that hard inquiry on your credit, you definitely want to minimize how many inquiries you have. [About 10%] of your FICO score is (new credit), and every time you apply for a new card, it’s going to take at least two to five points off [your credit score] per inquiry.

However, the biggest factor of your credit score is the amount of balances that you carry each month in terms of total available credit. In a way, when you get more and more credit cards and available credit, if you’re carrying low to no balances, your score will actually go up. There are definitely ways to balance out getting new cards and if the bonus is 50,000, 75,000 or 100,000 (points). I’ll gladly take $1,000 of the credit card company’s money for a two- to five-point temporary hit on my credit.

Gerri: What’s your sense in terms of what you’re hearing from not only the applications that you fill out but from the readers on your website? How easy or how difficult is it for them to get these top-tier reward cards?

Brian: During the credit crisis, the credit card companies really scaled back. They were slammed with tons of people who were overleveraged and were irresponsible with their credit. As employment is getting better and the economy is getting better, the credit card companies have really loosened up on their underwriting.

People who never thought they could get the AmEx Platinum Card for example are now getting approved. The biggest thing is, the credit card companies (don’t want to see) huge balances. If you’re over-leveraged, I absolutely do not recommend getting a rewards credit card and carrying balances on them because the APRs are much higher than other cards that may not get rewards but may have lower APRs, balance transfers, etc. But there’s so much competition in the marketplace and from everything I understand, the bonuses are going to get even better.

Gerri: And then what do you do? Do you keep the credit cards that you aren’t using or do you try to switch among different credit cards? How do you handle it?

Brian: If a credit card is not providing me value year to year, at least more value than the annual fee, I cancel it. However, before canceling it sometimes what I’ll do is actually when I get a new credit card with the same issuer for the sign-up bonus, I’ll actually have them transfer that credit line in order to open up a new card.

You can also ask the issuer if they’ll waive the annual fee. They don’t want to lose you as a customer so they’ll give you a bonus opportunity such as double points for three months. That alone could pay for the annual fee. But yes, if I haven’t had it open for a very long time, I absolutely will close it.

And it does have an impact on your credit because you have less available [credit], and once again [the second biggest factor] of your score is that available credit to usage ratio, and the length of history on the accounts [also affects your score]. But once again, if you’re paying your balances every month, those small things [may not] fundamentally change your score.

About Those 315,000 Rewards Points…

Gerri: On your blog you talk about how you opened five new cards and earned 315,000 reward miles/points. It looks like you’re pretty actively searching for the best programs.

Brian: Absolutely. The credit card companies read my site and they know that [to reach] savvy consumers, they need to stay in the game and keep us active. That’s why we’ve seen so many credit card companies offer thresholds. Spend $30,000 on British Airways Visa and they give you a companion ticket every year that could be worth thousands of dollars depending on how you use it.

I like to do a couple times a year what I call a “round of applications.” The thought is if you apply for several cards on the same day, the other issuers that you’re applying for aren’t going to see those hard inquiries. It usually takes about a day for them to hit your credit report.

I know we’re told that credit cards are going to ruin [us], but if you know how to manage them, they’re the ticket to thousands and thousands of dollars in free travel or even gift cards.

Gerri: I noticed in that same article Brian, you talk about how with several of the applications you have a line which says “application result: pending decision” and you call the reconsideration line. Tell me what that involves. What kind of questions do they ask you?

Brian: So many times when you’re denied or given “pending,” so many people just assume I didn’t get approved and I’ll try again later. But credit card companies, most of them, have these reconsideration lines and they’re staffed, many of them, 24/7 by credit analysts that you can call and talk to. They have computer models that may automatically decline someone if they’ve had too many inquiries but if you call them up and say, “I’ve got a great job and I may have a lot of inquiries but I don’t carry any balances. And if you approve me for this card, I’m going to spend a lot of money on it, and I’m going to take it away from your competitor, and give it to you. Do you want that?”

A lot of times they’ll say, “Why do you have so many cards?” Be truthful. Say I’m a savvy consumer, I love my points and that’s why I’m getting this card, it’s a great product… And if you can convince that person, I’ll be honest, I don’t have any statistic but almost all of my readers have reported great success with that method.

Gerri: I’m really amazed by how many times in that article you ended up with this “pending” (decision) or calling the reconsideration line. It looks like it’s a pretty fairly common thing and you’re right, most people would tend to freak out when they see that.

Brian: Yes. I personally hate getting on the phone, especially when it comes to a credit card company — not one of my favorite things to do. But if it’s the difference between me getting this sign-up bonus which could easily be $1,000, depending on how big it is, you better bet I’m going to pick up that call and do everything possible.

Some people think this is shady, this is clandestine, but it’s absolutely not. Be truthful. Absolutely, don’t lie on your application but say, “I love points and I love this card for these reasons. I responsibly manage my credit. Yes, I have several cards recently but I spend a lot of money or I’m planning to do a home renovation and spend a lot more.” There’s many different reasons a credit card company will approve you.

I have nine different Chase credit cards right now. They set a total limit per consumer. I hit that limit but every time I apply to get a new card I get a pending. I’ll call the reconsideration [line] and say take $10,000 off this credit line in order to open up the new one. And they’re like, “Done.” They want to get their consumers more engaged because it’s very competitive right now.

Gerri: And 315,000 points later you’re laughing all the way to the trip.

Brian: And the fun doesn’t stop there because a lot of these cards offer amazing benefits, like “elite status.” I got a Delta credit card that gave me 15,000 miles towards elite status in addition to regular miles. The Hyatt credit card gives a free night every year that you renew. So even though the annual fee is $75, I can use that free night for a $200 hotel. I’m going to keep that card open forever. As long as they give me more value than I’m paying, it’s a no-brainer.

Weighing the Costs and Benefits

Gerri: And on that note, what about annual fees because a lot of these cards that carry the high bonuses do charge an annual fee, at least the second year that’s pretty hefty. How do you do the math to decide if it’s worth it?

Brian: Most of the premium cards that give rich rewards are going to have an annual fee. But if you know how to maximize that card, for example the United Explorer Card has a $95 annual fee but that card gives you full (rental) car insurance — full coverage, not just the collision damage waiver, they actually do liability damage. That alone saves me hundreds a year in insurance. Yes, I’m shelling out $95 to save $400 or I just feel protected when I rent a car with it.

The AmEx platinum is a great example, it’s $450 a year which seems really, really high but they just came out with this new perk where you get $200 worth of airline credits each year, plus global entry, you get lounge access to a bunch of different airlines. Yes, I do shell out for the annual fees because the no-annual-fee cards generally aren’t going to give you the richest rewards.

Gerri: If you really want to maximize your points, you’re probably at least in the second year looking at paying an annual fee for these cards.

Brian: Yes. A lot of times there’s an equivalent product that’s offering a bonus and the next annual fee free so you can switch between cards. There are ways to avoid annual fees, you simply can close them or transfer them into opening a new card. But many cards, it makes sense to pay the annual fee because what they’re going to give you is worth more than it.


Gerri Detweiler is Credit.com’s Director of Consumer Education. She focuses on helping people understand their credit and debt, and writes about those issues, as well as financial legislation, budgeting, debt recovery and savings strategies. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.com.

Related Links:

How Many Credit Cards Is Too Many?

Should I Close a Credit Card Account?

How to Lower Your Credit Card Interest Rates

Photo: Igor


14 Comments / Post A Comment

Does anyone know of any cards out there that give significant rewards for things other than travel? I mostly just spend money on necessities, so I use a Discover card which gives a tiny-percentage cashback bonus; it can be exchanged for added-value gift cards but the only national company I tend to buy things through is Amazon…

j a y (#3,935)

@Sarah Rain@facebook I don’t know if it’s available in the states but Capitol one aspire cash world platinum is effectively 1.5 percent cash back with no yearly fee. That’s the one I use.

Nibbler (#5,331)

@Sarah Rain@facebook Amazon card maybe?

Nola212 (#6,138)

@Sarah Rain@facebook The Fidelity American Express gives 2% cashback on everything, BUT that’s only if you put the rewards into a Fidelity account. However, it looks like you can put the rewards into a cash management account and essentially use that as a regular savings account rather than an investment account. I don’t have the card, but have been looking into it since finding a decent cashback card that doesn’t depend on bonus categories is hard.

cryptolect (#1,135)

@Sarah Rain@facebook The Amazon card gives you 1% cash back in Amazon credit and 3% cash back (Amazon credit) on Amazon purchases.

ThatJenn (#916)

This is an awful and dangerous game unless you have a very high disposable income. Could you theoretically afford to pay for all these vacations in cash? No? Then this approach is probably not for you as it is much more likely to suck you into spending money you shouldn’t than to actually save you money, at least if you succumb to human instincts and desires sometimes like most of us and are not 100% cautious and rational in every decision you make.

ThatJenn (#916)

@ThatJenn Don’t get me wrong – my credit card is totally a rewards card. But doing it at the scale he’s talking about – making purchases and opening cards JUST for the reward – well.

Here’s my primary objection: It’s easy to say “the annual fee is $78 but I can spend it on a $200 hotel room, so it’s basically free money” is cool, but to actually use a $200 hotel room you also need to get there and feed yourself and otherwise spend on being on vacation, which quickly balloon, especially when you feel like you’re getting something for “free” and thus saving money (suuuure, I’ll spend two more nights in that hotel and upgrade to first class! I mean, the flight was free!). Maybe you do also get a free flight from your other cards, but that still assumes you have a pretty large volume of money getting spent on your cards, too. So ultimately you’re paying $78 per card per year to obligate yourself to vacations that you will, in fact, still have to pay at least some money for. If you can afford those vacations, cool! Go! But most of the people I know can’t, at least not the multiple times per year implied by this article.

But maybe everyone else is better at properly budgeting their vacations than I am and I’m just annoyed that I’m so bad at it. I dunno. Advocating this kind of thing to anyone who doesn’t have a lot of spare income (and who might actually need encouragement to spend LESS overall, like many many of us) just rubs me the wrong way.

j a y (#3,935)

@ThatJenn yeah that’s what I thought too. It’s only good if you were going to spend the money, both upfront for the rats and after with the reward, anyway.

I don’t spend enough, so just give me cash back that I can apply to my payment/credit my budget.

MrDannyOcean (#6,134)

@ThatJenn I think “awful and dangerous game” is a little bit over the top. Like anything to do with personal finance, you have to manage it properly.

I play this ‘game’ a lot and for me the biggest thing is not keeping balances and not spending extra. First rule – never keep a balance on any card. Interest is the biggest killer. But as Brian mentioned, having several cards open actually helps your credit in the end.

Second rule – don’t overspend for points. Most good offers are something like “Spend 2K in 3 months, and we’ll give you 50,000 miles!”. I make sure that I can hit that 2K spend with my normal level of purchases – For me utilities, internet, groceries, phone, and everyday spend is almost always enough to get those bonuses.

Do that, and you end up with a lot of points. If you plan your vacations carefully, you can end up spending very little. Plane tickets and hotel nights are the huge majority of a vacation’s cost, and those can be had essentially for free if you have the points.

And even if you don’t use them for grand vacations, points are still useful. Seems like most people have 2-3 times per year where they have to/want to fly somewhere. Going to a wedding, home for the holidays, etc… Good thing you got those 50K southwest points just for spending the money you already spend, now that ticket is free!

Like anything, you have to manage it properly. It is a bit advanced – and by that I mean I wouldn’t recommend it to someone who doesn’t have the basics of personal finance down. If you can’t keep a budget or you don’t know how to responsibly have a credit card, then obviously this is not for you. But for anyone with a stable monetary situation who is responsible, I think it’s great.

EDaily (#4,396)

@MrDannyOcean Right, it is a game. And you have to remind yourself when doing something like this that when you play a game, some people win, but some people also lose. And credit card companies make money off of the people who lose.

ThatJenn (#916)

@MrDannyOcean Yeah, I was feeling a bit over the top when I wrote that particular phrase, but it can be really insidious and fool you into thinking you’re making money overall when you’re actually losing it, very easily. I feel that this article did not articulate well that it’s “a bit advanced” and instead made it seem like the easy and even responsible thing to do with no real potential negative consequences beyond a possible credit dip.

Admittedly I rarely fly or stay in hotels, and I tend to work too much so I don’t get to my fun vacations, and I am not perfect with sticking to a budget in the face of “but I’m saving so much money on this trip and I’ll get rewards points on the parts I have to pay for,” so I suppose I’m just not the person this is designed for (though it’s totally written in a salesy way that would appeal to someone with just that last problem). But I am also not sure that I am at all unusual for an average Billfold reader in these respects.

I am very glad it works for you, though! There are many others like you, and I hope to be among you someday (I’m closer and closer every year, and part of that – for me – is recognizing that something like this could easily be a trap for me). But I’m not sure you’re average; credit card debt and the temptation to rack up more of it is quite common.

I hate text because I think this probably reads as very defensive, but I really do think you have a point, just to be clear. I just read this and my brain went “TRAP TRAP TRAP IT’S A TRAP” and I sorta… kneejerked out a comment.

MrDannyOcean (#6,134)

@ThatJenn That makes perfect sense. Part of being financially responsible is knowing your own limits. I don’t play in the stock market even though I have the money to be able to do so, because I don’t want to take the time to learn to do it properly. I recognize I’m not an expert at that, so I don’t bother (boring index funds for me). I think the same principle applies in both situations – if you’re not confident you can do it correctly, don’t do it.

Stick with what you know. And then perhaps later on, if/when you are confident in your ability to manage it, try out getting some of the good rewards cards.

Nola212 (#6,138)

As a long-time Billfold lurker and semi-recent points hobbyist, I have to admit I was pretty disappointed with this post. I agree with @ThatJenn that this was too salesy and ignored some real dangers/concerns. I make it work as an under-employed grad student, but I also would never advocate for this hobby without outlining the risks I take. It also probably helps that spreadsheets make me giddy.

Also, I’d like to point out that Brian is a widely read points blogger. Part of his job is to accumulate massive amounts of points so he can write about various products (like different first class cabins or luxury hotels) which means that his rewards strategy is not going to suit the needs of most people, but he needs to make it seem like it does. I wish the introduction to the piece did a better job of giving some context to Brian and his role in the points world. I know that this was a Credit.com post, but perhaps in the future Billfold can at least provide some background to pieces like this?

Anyway, I’ll get off my soapbox now.

pterodactylish (#2,321)

@Nola212 Literally anything with money can be dangerous. Spend all your cash too early in the month? Nothing to eat for the rest of the month! Same concept with credit cards.

But basically, this dude shows you how to maximize your money to get the most from it. Under Points Guy advice, I’ve found out away to basically take a free trip every year thanks to my points. It’s money I’d be spending anyway, but I want it to work for me. In the three years I’ve been trying to utilize CC points/cash back, I’ve netted more than $1200 of travel/cash back. I’ve spent perhaps $60 bucks interest on unexpected charges, so, seems like a good deal to me.

Anyway, yay this post. Inspired me to finally downgrade my old Rewards Card (before the fee kicked in) to a no-fee version and then open a new, high rewards card with a big signing bonus.

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