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So you subscribed to the newsletter, you’re excited because 1tattedpassport is finally going to share his secrets and you’ll be able to check off those bucketlist boxes, right? Perfect!
I spent a lot of time writing the beginners guide as an introduction so you wouldn’t be lost. However, you don’t have time to read all that stuff. You just want someone to explain it to you in simple terms so you can do it tomorrow. Ok, let’s go…
There are a million credit cards out there and many of them offer some great benefits. I focus on travel-related credit cards because that’s what I enjoy doing.
But here is a basic run-down of how this works…
- Apply for a credit card
- Rack up points
- Redeem for travel
…was that too simple?
OK, THE BASICS EXPLAINED A LITTLE MORE…
If you are approved, you will receive the card in about a week. Hopefully, you applied for a good card and there is a bonus attached to the card (e.g. points for meeting the “spend requirement” within a timeframe).
If you’ve read any of my other blogs, you are aware that I love examples. So, let’s start with a simple example.
One of my favorite credit cards is the Chase Sapphire Preferred® Card. I consider it to be one of the most well-rounded cards on the market, and one of the best cards for beginners. It has a low annual fee, good return on spending, excellent perks, and has a generous welcome bonus.
CHASE SAPPHIRE PREFERRED (CSP)
At the moment, CSP has a sign-up bonus of 60,000 Ultimate Rewards Points after spending $4,000 within three months (of approval of the card). In other words, if you are able to put $1,334 per month on this card for the first 3 months, you will be rewarded with 60,000 points.
IS 60,000 POINTS GOOD?
If you are new to points/miles, 60,000 points may not mean much to you so you’re probably asking yourself “what can I do with 60,000 points?”
Well, it depends on your travel goals but I’ve listed a few examples (below) to spark your imagination. So let’s see what we can do 3 weeks from now.
Anyone interested in flying from Greater NYC to Paris? United Airlines is charging 30k for a one-way in economy…
Perhaps, you’re on the west coast and Japan is more your style…
Or perhaps, you just want to fly to Hawaii for a few days? Virgin Atlantic is charging…
Note: Did you know you can use Virgin Atlantic miles (a European Airline) to fly on Delta planes all around the world? If not, you may want to READ THIS.
Perhaps, you are not interested in flying 10 hours to Hawaiian beaches so you plan a road trip to Miami. 20,000 points per night will put you in the heart of South Beach. READ THIS REVIEW.
IT GETS BETTER
CSP offers bonus points in two categories that I believe are useful to everyone. It offers 2x points on dining and travel purchases globally and 1x points on all other purchases.
Chase is very generous with the “travel” category. For example, airlines, airports, car rental agencies, parking garages, cruise ships, hotels, motels, timeshares, trains, buses, taxis, ferries, bridges, tolls, etc. all qualify as travel.
Note: I always recommend getting a credit card that has bonus categories that match up with your spending profile. Some cards offer bonus categories on travel, dining, gas stations, supermarkets, etc., so pick the one that works best for you.
…BUT WAIT…IT GETS BETTER
If you have ever had a flight delay / cancellation, or your bags did not arrive on the same flight as you, it can be very stressful. However, CSP offers quite a bit of valuable travel and purchase protection.
…BUT WAIT…IT GETS EVEN BETTER…
Call right now and for 3 low payments of $31.67…
I’m just kidding, you have to pay the $95 annual fee during the first credit card statement cycle. It is also worth noting that the $95 does not count towards your $4000 minimum spend.
CSP has a reasonable $95 annual fee. You can add authorized users to the card at no extra cost, and any spending they put on their card will contribute towards the points you earn.
But here is the bottom line…during the course of a month, there are things that you are going to purchase. For example, you’re going to purchase food (from the grocery store or from a restaurant), pay your cell phone bill, fill your car with gas, pay utilities, purchase something off of amazon, pay tuition, etc.
The credit card does not require you to do anything extra besides put those purchases on your credit card. Why not be rewarded for doing things that you are already going to do?
CAVEAT: I will repeat this many times…pay your credit card in full every month! My rule of thumb is “if you wouldn’t put a purchase on your debit card, don’t put it on your credit card.”
Who has a different outlook on points? What questions do you have?
P.S. No one enjoys spending ~$400 per night to stay in a hotel but if you are searching for exotic inspiration, 30,000 per night = amazing luxury!