I received a lot of positive feedback from my last post on how to get started in this travel hacking game. One reader actually had some great follow up questions that I’ve been asked a lot so I thought it would be useful to post her questions and my answers here for all to see. Please don’t hesitate to contact me with any questions.
I’m happy to help!
Do you have any suggestions on how to meet the minimum required spending for
some of these cards (I think it’s usually $3000 in the first 3 months)? We are savers at heart, and without literally charging our rent, I am not sure how we would make that minimum. Ideas??
We are decreasing our spending dramatically so I have done a lot of research into the best way to meet these spending requirements without large bills to pay. And what I’ve found to work best for us, is by using our Bluebird card from Walmart (it’s like a bank debit card that you can add funds to at Walmart and then pay your bills with it). And if you don’t have many bills to pay, you can even issue a check to yourself or a blank check that you can then write to your landlord, or even pay your credit card account online. The Bluebird account is free to sign up for here: www.bluebird.com
Once you have your Bluebird account, there are many ways to use credit cards to get money onto that card. The best and least expensive way that I’ve found is by buying Simon Mall Visa gift cards (not Amex gift cards). Generally, I buy two $500 cards at a fee of $2.95 per card with a credit card. So, the total that goes on my credit card is $502.95 per gift card. These gift cards act like debit cards which you can use to load your Bluebird card at Walmart. Once you’ve purchased these gift cards, you call the number on the back to find out what the pin number is that is associated with the gift card. You then go to Walmart (I recommend combining your trip to load your card with a trip you were going to make anyway) to the Customer Service desk and tell them that you’d like to add funds to your Bluebird card. They ask you to swipe your Bluebird card, how much you want to put on ($500), then they ask you to swipe your gift card, enter your pin and you’re done. I do this twice and have just added $1000 to my Bluebird card that I can now use to pay any bills that I may have. You can do this once a month or once a day depending on how much you need to charge (you can only load $1000 per day to your Bluebird account). And the best part about this is that you can pay off the credit card you used to buy the gift card by using the money you just added to your Bluebird account. So, in short, it’s an easy way to meet the minimum spending for a fee of $2.95 per $500.
The keys here are: Opening a Bluebird account, finding a Simon Mall location to buy the gift cards at (they are everywhere
!), and loading your Bluebird account at Walmart when you were going to be there anyway.
Do you keep all of the credit cards you apply for, or do you apply, meet the minimum requirements, ensure that the miles are in your account, and then close the credit card? Are there ways around avoiding the annual fee for some of the cards?
We keep the credit cards that we open for about 10 months. If we open them and close them fairly quickly, the banks may be alerted that we’re just signing up for the cards for the bonuses and may be less likely to approve us in the future. So, we hold onto them for about 10 months and then close them before the annual fee hits. There are some cards that are worth keeping open despite the annual fee, but that depends on whether or not you’ll get value from the card after paying the fee.
I’m also frequently asked whether or not the credit card company can claw back the miles or points that we’ve earned if we close the card. Many credit card companies tell clients that as a technique to keep them from closing a card. In some cases it’s true, the credit card company can take points back. But that is only true where the points you earned are the bank’s points. This is most applicable to Chase Ultimate Rewards points, Barclay’s Arrival points, Capital One Venture points, Citibank Thank You points, and American Express Membership Reward points. These are all owned by the bank and they will take them back if you have some in your account at time of account closure. However, all miles and hotel points that are transferred directly to the airline or hotel programs can not be withdrawn by the bank. I’ve heard over and over again Barclay’s telling people who are looking to close their US Airways MasterCard that they will lose the points if they close. This is not true. The banks are not able to reach into someone’s frequent flyer account and remove miles.
We normally do not stay in hotels; we prefer vacation rentals with one or two bedrooms since they offer more flexibility to our family and are often cheaper than hotel rooms. Would you still recommend getting a hotel rewards card? Maybe one that has points that transfer to airlines?
I would recommend getting a hotel card only if they have transfer possibilities that apply to upcoming travel you have on the horizon. The only one I can think of would be the Starwood Preferred Guest card. This is great for hotel stays in the Starwood chain, but is also great for transferring to many airline frequent flyer programs. Otherwise, hotel credit cards may not be for you. We have gotten a ton of value from them but it just depends on where you’re going and how to use them properly. For example, the IHG credit card from Chase gives you a free night at any IHG hotel in the world (Intercontinental, etc.) each year upon paying the annual fee of $49 (in addition to the initial bonus). We have used our free nights (both me and my husband have the card) for two night stays at Intercontinentals in London, Hong Kong, and this summer at Berchtesgaden, Germany.
Also, I read your Maldives post and remember you said that it is not often that you find 4 award seats on the same flight open up at the same time. What about 5? Impossible? 🙂
Nope, definitely not impossible! It depends on where you’re looking to travel to but I’ve found 5 or more on airlines like Cathay Pacific, Austrian Airlines, Copa Airlines, Aer Lingus, Air Tahiti Nui, Lufthansa and many others. You just need to plan ahead to get that many seats on one flight, especially in a premium cabin. That is usually the biggest hurdle for families. They’d like to plan a trip three months in advance and by then, it’s just too late to get several seats together. Oftentimes, seats open up within a few weeks of departure, but by then, it’s too late for families to start planning a trip. So, I recommend looking at soon as the award calendar opens up (about 11 months in advance) and at about 6 months in advance. And if you’re able to swing last minute travel, the last 2-4 weeks before departure can be a gold mine as well!