Burn Miles, Not Money Part 3: Our Churn
/If you made it through our last post, you're comfortable with your credit score and you've figured out your general flight plan and estimated how many points you will need to make your travels happen. The next step is choosing the cards you’re going to apply for. Gary at VFTW and FrequentMiler have comprehensive lists of the best available offers for each card. You can also contact Scott at MileValue for advice. Another good place is to check is FlyerTalk’s Credit Card Programs forum for the threads detailing the best offers and how to get them. I'm not going to tell you which ones to pick here because (1) offers change and (2) your needs may be different than what our were. So check out the links above and see what works best for you.
Card | Bonus* | Spend | Annual Fee | Program | Foreign Transaction Fee? |
AMEX Gold | 15,000 | $1,000 in 3 months | $125 (1st year waived) | Membership Rewards | Yes |
AMEX Preferred Reward Gold | 25,000 | $2,000 in 3 months | $175 (1st year waived) | Membership Rewards | Yes |
AMEX Starwood Preferred Guest | 25,000 | $5,000 in 6 months | $65 (1st year waived) | Starwood | Yes |
BoA Virgin Atlantic | 47,500 | $2,500 in 3 months | $90 | Virgin Atlantic | Yes |
Barclay US Airways | 35,000 | First purchase | $89 (1st year waived) | US Airways | Yes |
Chase British Airways | 50,000 | $1,000 in 3 months | $95 | British Airways | No |
Chase Ink Plus | 50,000 | $5,000 in 3 months | $95 (1st year waived) | Ultimate Rewards | No |
Chase MPE (x2) | 55,000 | $1,000 in 3 months | $95 (1st year waived) | United | No |
Chase Sapphire Preferred | 40,000 | $2,000 in 3 months | $95 (1st year waived) | Ultimate Rewards | No |
Citi AA Amex (x2) | 40,000 | $1,000 in 3 months | $85 (1st year waived) | American | Yes |
Barclaycard Arrival | 40,000 | $1,000 in 3 months | $89 (1st year waived) | Proprietary | No |
We chose the cards we did because we wanted to focus our earnings into three main programs: American AAdvantage, United MileagePlus, and British Airways Avios. These programs fit best for the itinerary we have in mind and the flights we want to take. As I said last post, this is how you should tailor your churn lineup. If you're going for RTW award tickets, focus on one alliance. If you're going to book flights one at a time, your churn will most likely leave you with miles in multiple programs across multiple alliances. This is a good thing. You never know what availability will be like or your plans may change radically and the only flights to where you want to go will be with a different alliance. Along the same lines, always have more points than you need. You may have to redeem in a higher class to get the exact dates you want/need.
You’ll see that of the 13 different cards we applied for, there are 9 programs involved. Seems to contradict our goal to focus on AA, United, and British Airways, right? Not so fast my friends! 3 of the programs are not airline programs, but credit card/hotel programs that allow you to transfer points to airlines: Membership Rewards (Partners), Starwood Preferred Guest (Partners), and Ultimate Rewards (Partners, plus Virgin Atlantic). We transferred our MR points to British Airways, our SPG points to American, and the UR points to United and British Airways (get used to the lingo - it’s everywhere!). Plus, with the impending merger between American and US Airways, those miles are likely to combine into one account. So, in the end, we’ll end up with points in our 3 main programs - American, British Airways. and United - and Arrival points we can redeem as cash against any kind of travel purchase (we used the Virgin Atlantic miles to visit Tyler’s family before we left).
Most rewards cards require meeting a Minimum Spend before you receive the bonus. For some, it’s fairly easy, such as $1,000 in 3 months. That’s $333 a month - most of us spend that without trying. It becomes difficult when you apply for multiple cards at a time and find that you have to spend $14,000 in 6 months to earn all your bonuses and you usually only spend $700 a month on credit cards. I’m not going to teach you how to manufacture spending on this blog as, honestly, its a risky business to get involved with as you're leveraging your credit score and cold, hard cash to earn miles - not for the faint of heart. We took the plunge in the form of Vanilla Reload/PayPal cards, Amazon Payments, Google Wallet, and more, and it’s helping us travel around the world the way we want to. You should weigh the pros and cons for yourself, but If you’re planning on doing a lot of churning, you’ll have to learn about it. FrequentMiler, View From The Wing, Million Mile Secrets, and the Manufactured Spending sub-forum on FlyerTalk are all required reading to see if manufacturing spend is something you want to get involved with.
All of these cards have Annual Fees of some amount. Thankfully, most of them are waived for the first year. This works well for churning because it gives you about a year to earn the bonus and earn points on daily spend before you have to decide whether or not the annual fee is worth keeping the card or if you should cancel it (click here for a good guide on when to cancel and when to keep). We will cancel most of the above cards before we leave in order to avoid the annual fees.
Reconsideration
When you apply for a credit card, you'll get one of three answers: (1) Approved; (2) Under Review, or (3) Denied. In the latter two scenarios, you aren't completely out of luck yet. Sometimes companies just want to confirm certain information and then they will approve your application. Other times, there may be information on your credit report that scares them (such as a large number of recent inquiries, a common problem for churners). In these situations, there are departments you can call at the credit card companies to talk to a representative to work the situation out. Million Mile Secrets has a very good guide of how to handle these calls and which phone numbers to use. We had to call in for a few cards and we were approved 4 out of 5 times (Citi doesn't like Tyler...). The first time may be scary, but stick to your guns and follow Daraius’s guide - it worked for us.
General Advice
Confused yet? No? Please report to the nearest university so a team of superstar neuro-scientists can study your brain and find the secret to enhanced information uptake ability. If you are confused, don’t worry! Just keep reading blogs and FlyerTalk and it will start making more sense. We spent 2 months reading and learning before we jumped into the game. If you aren’t willing to put in the effort to understand, then this isn’t a game worth playing. If you don’t play smart, it will bite you in the ass. 3 basic commandments that will help you succeed are:
Pay your bill in full. Every time.
Rewards cards usually have higher interest rates than non-rewards earning cards (19-30%).
Never be late with a payment.
You may read that late payments have to be over 30 days late before they hit your credit report, but don’t play with fire. NEVER BE LATE.
Be Extremely Organized.
This last one is really the most important one. It’s not easy to always keep straight which card is the best to use for each type of purchase, which cards you still have a minimum spending requirement to meet, and where the hell all your points are! Personally, I have 4 different spreadsheets: (1) Applications; (2) Minimum Spend; (3) When we should get our points/miles; (4) Points we have in each of our loyalty programs. Using these charts, I was able to stay on top of all my points, meet all my spends, and I’ll know when to cancel the cards I don’t want to keep. Find a system that works for you and stick with it.
The beginner guides I referenced last post promote the use of certain services to keep track of your miles/points. We do not use any because I find it easier to log into our accounts regularly to check balances and track them in a spreadsheet. As such, I cannot advise you on or recommend any specific service, but check them out for yourself and see if it will be easier for you to use one of them.
The above is not an exhaustive guide on the subject of credit cards and is only meant to be a snapshot of our experience in churning. Credit cards and their intricacies require more explanation than we can give time to them, so read as much as possible about the cards on their respective websites and the blogs/forum we referenced in our previous post to find out what works best for you. You can also email us at eastorouest@gmail.com with questions, comments, or to seek advice about which cards make sense for you.
Next up, we'll share some advice about the actual award booking process. Gotta learn how to use your hard earned miles!