I opened a new credit card last August, just before I moved to San Francisco. I wasn’t thrilled with the card I had at the time — a simple travel card that didn’t incur exchange rate fees, but also didn’t accumulate too many points. After extensively researching all summer, I decided to apply for Chase Sapphire Preferred Credit Card. It not only would ensure I didn’t have to pay pesky exchange rate fees while abroad, but that also gave me two points on all travel and dining purchases. It also allowed me to either transfer points 1:1 to a select group of airline partners or book through their own travel portal and pay with a combination of the points I had earned and cash.
How do you earn travel rewards credit card points?
As a frugal spender, it becomes difficult to rack up the type of points that can translate into a free flight ticket — that is, without the generous welcome bonus. Many credit cards offer a bonus offer of “x” number of points if you spend “y” dollars in “z” months. For the card I had applied for, I needed to spend $4,000 in three months to earn 50,000 points, which is roughly over $700 in travel if used the right way. Now, for families, spending $4,000 in three months may not seem like a difficult number to reach. (In fact, I know it isn’t because when I recommended my mom apply for a travel credit card, she managed to reach $4,000 without breaking a sweat.) But, for just a single person — and a single, budget-minded person at that — it seemed like a lot of money to have to spend.
So, I planned my spending strategically.
For context, I spend roughly $500-$750 a month, excluding rent, utilities, and transportation costs. I applied for my credit card at a time when I knew that my spending would be high, however. Prior to moving to San Francisco, I needed to buy a one-way plane ticket, a mattress, and business formal clothes for my finance job. Once I arrived in San Francisco, I needed to buy everything from soap to body lotion to detergent. In that short month between when I left home and moved across the country, I spent nearly $1,500.
To reach the rest of my payment goal, I began to pay for my transportation with my credit card, instead of the allotted transit card my company provided, and had the money reimbursed to me from the transit card. That added an extra $250 of spending to my budget each month. This meant, in the following two months I had left to spend $2,500, I spent $2,000 without trouble. That last $500 I spent on a gift card to the local grocery store I began to frequent, planning to decrease my spending in the subsequent months by using the gift card instead. I also paid for three months of my gym membership upfront so that I would reach the bonus, because I knew I’d be using it. (Admittedly, this kind of up-front spending does not work for everyone.)
At the end of October, my credit card points looked something like this:
- 50,000 Welcome Bonus
- 4,000 Points from Spending Needed to Reach Welcome Bonus
- 2,000 Extra Points from Travel/Dining Spending
- = 56,000 Points
In November, I decided to apply for the Chase Freedom Unlimited card, which would give me 1.5% cash back on all purchases. I wanted to use this card to pay for my gym membership and groceries, and then the Sapphire Preferred card for dining and travel in order to maximize my points. Moreover, since I already had the Chase Sapphire Preferred Card, I could transfer points from the Chase Freedom Unlimited card to the Chase Sapphire Preferred Card and use the points as miles. The Chase Freedom Unlimited card had a bonus of 15,000 points after spending $500 in three months — easy! But, since I had just paid through the end of December for my gym membership and essentially didn’t need to pay for groceries in November because of the gift card I had purchased, I wound up only spending $200 on the card in November.
Still, by the end of December, I had achieved the spending limit and my credit card points now looked a little something like this:
- 15,000 Welcome Bonus
- 750 Points from November + December Spending
- 375 Extra Points from 1.5% Cash Back
- 56,000 Points from Chase Sapphire Preferred Card
- = 72,125 Points
In December, I unexpectedly needed to fly to the East Coast for a family emergency and wound up transferring 25,000 points to United Airlines to book a one-way ticket. The other ticket I was able to book on American Airlines using points I had earned from a business trip in November. So, at the end of December, I really had 47,125 points and had already managed to save $500-$600 on airfare (tickets to the East Coast in December are not cheap, and I bought my ticket literally twelve hours before my flight).
I didn’t have sufficient vacation days to take any additional time off for holiday travel, so by the end of February, my points looked a little something like this (approximately):
- 47,125 Previous Points
- 650 Points from Chase Sapphire Preferred Spending
- 650 Extra Points from Travel/Dining Spending
- 600 Points from Chase Freedom Unlimited Spending
- 300 Extra Points from 1.5% Cash Back
- = 49,325 Points
In March, I decided to apply for yet another credit card, this time the United Mileage Plus card, which would give me 50,000 miles after spending 4,000 in three months. Using a similar tactic to the one I employed when I was first approved for the Chase Sapphire Preferred card, by the end of May, I had earned 50,000 United miles. I was also ready with another three months of my gym membership to pre-pay and another gift card to my grocery store to buy to reduce my spending in June. Since I spent so little in June, I had 49,825 points by the end of the month, plus 50,000 United miles.
In June, I actually applied for a business credit card, one that would give me another 50,000 points after spending $4,000 in three months. So, my lowered June spending went on this 1.5% cash back card, as did travel purchases I made in July when I finally began to spend the points I had earned. My friend from college and I decided to travel to San Diego for the 4th of July. Flying from San Francisco, I was able to get award tickets priced between 10-15K points. I spent 25K points total, booking through Chase’s travel portal, and only had to pay for my Airbnb and other travel expenses. I also traveled to LA in July, just for a quick weekend getaway, and was able to transfer my points 1:1 to Southwest airlines and pay 11K miles, along with a small fee of $5.60 for each ticket.
So, by the end of July, my points balance looked a little like this:
- 49,825 Previous Points
- -25,000 Points on Trip to San Diego
- 500 Points from San Diego Purchases
- 250 Extra Points from 1.5% Cash Back Business Card
- 300 Points from July Spending
- 150 Extra Points from 1.5% Cash Back Business Card
- -11,000 Points on Trip to LA
- 250 Points from LA Purchases
- 125 Extra Points from 1.5% Cash Back Business Card
- = 15,400 Points
A roundtrip ticket to San Diego and another to LA isn’t all that costly, admittedly. But during the 4th of July weekend, I easily saved $250-$300 and I still managed to save another $100-$150 on a flight to LA. At this point, I had saved anywhere from $850-$1,000 on flight tickets from using the points I had earned while making my day-to-day purchases. I decided to use the miles I had accrued through United to book a trip home to New Jersey at the end of August. I managed to snag a ticket back to San Francisco for 12.5K miles and spent a total of 36K miles on those tickets. That left me with 14K miles on my United account, as well as a savings total of $400 on that ticket alone.
By the end of August, my points looked like this:
- 15,400 Previous Points
- 450 Points from August Spending
- 225 Extra Points from 1.5% Cash Back Business Card
- 400 Points from NJ Purchases
- 200 Extra Points from 1.5% Cash Back Business Card
- 50,000 Welcome Bonus
- = 70,725 Points (and 14,000 United miles)
So, in one year, I managed to earn points that are roughly worth up to $1,000 in travel and spend points that saved me roughly $1,250-$1,500 in travel!
As of now, I plan to use the points I have remaining to purchase tickets to the East Coast for Thanksgiving, which will unfortunately cost me around 65K points, but will also save me close to $900 (Thanksgiving prices are WILD)!
While I didn’t have the opportunity to use my points for an international venture, I am hoping to snag another cash back card from the Chase line and potentially another business card, as well, to earn close to another 65K points through welcome bonuses so I can offset the costs of an international trip that I am hoping to plan for 2020. Although it may not be sustainable to continue to open new credit cards, the savings are immense — but only if you don’t spend more than you would otherwise, and you are able to pay all your cards on time. As you can see, I try to use just one or two cards at a time, and once I’ve received my bonus, I return to my baseline: one cash back card and one card for travel and dining purposes.
In fact, this scheme has improved my credit score immensely by raising my line of credit, and I am careful to only apply for cards that either don’t have an annual fee, or where the fee is waived for the first year. For those cards, I have to decide whether or not it’s worth it to keep paying for the card. For my Chase Sapphire Preferred card, I did just go ahead and pay the annual fee of $95, since my savings are much higher than that cost. Moreover, I wouldn’t have access to travel partners without it, and being able to accumulate my points from all my cards onto one and then make travel purchases has been extremely lucrative. Other cards, however, like my United Mileage Plus card, are ones I will likely decide to downgrade to a non-fee level. While this means I’ll lose out on perks such as United Club access and priority boarding, those simply aren’t worth as much to me as the money I’d spend on the annual fee.
For those looking to save money through credit card hacking, do your research! Know that each time you apply for a card, your credit history will get pulled, and that can temporarily decrease your score (which especially sucks if your application doesn’t even get approved). Proceed with caution, but also take advantage of credit card rewards. Do your due diligence, and see what kind of savings it may unlock for you.
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