OPINION: Can You Get Into the Game of Points and Miles as a Normal Human Being?

November 30, 2017

In the past few months, I have had the discussion with numerous friends over the topic of rewards travel. I have had reactions ranging from instant converts, to skeptical homebodies who just has a blank look on their face thinking I am out of my mind for having 17 credit cards.


Yet in every conversation, one question seems to constantly pop up: I have a 9-5 job / I don't have comp'd travel / I don't spend a lot of money. How can I even get started traveling for free?


Every one that I have spoken to essentially gave me a variant of this statement. Yet I think before someone should begin exploring the world of miles and points, there are questions you have to ask yourself before you should even contemplate if this circuit is right for you.



So you are here, reading my writing, ready to fly to Asia for free! I mean, that is what airlines are selling you with their loyalty programs.... right?


 The view at 36,000 feet. Extra sweet since I didn't pay cash for my Biz seat.


Often times people seem to want to travel for free. After all, who doesn't? But what I do think people need to realize as a fundamental principle of rewards travel is that nothing comes for free. EVER.


Sure, we may not be paying cash out of pocket to fly first class on some of the world's most luxurious airlines, or staying at hotels on award certificates, but is that truly free?


The minute you elect to take points for your credit card spending, you are electing to have a cost to your travel, based on the concept of opportunity cost.


There are many 2% cashback cards out there, some offering even up to 2.5% or 3% on every dollar you spend on any categories. The minute you pick points over cashback to fuel your travel plans, you are essentially electing to pay that cashback rebate potential savings as your cash cost to your travel.


However, I find that the minute you recognize the fact that reward travel is never truly completely free is when you will start seeing this in a far different dynamic, one where you are more inclined to find good value, than simply figuring out what's the best way to game the system to get something for nothing.


Some people are turned off when they realize this isn't truly free travel, but I am one who would gladly pay minimal amounts for a luxurious experience that will improve my experience by many folds.


At the end of the day, as long as I can get a great value, I am more than happy to spend the money and points, and I do believe this is the core basis of travel hacking that we are all simply maximizing our value and spending, rather than purely getting things for free.



The majority of Americans have credit cards. Some use it responsibly, some don't. If you are reading this and you are sitting on any sort of lingering credit card debt...


Then stop. Turn around, exit this page, stop reading. Get yourself whatever method possible to pay off your credit card and realize you may not be suitable for doing any of this.


If you are paying any sort of interest on your credit card, then no matter what reward or benefit I can offer you on this site would be completely irrelevant. The cost of you paying interest on your balance will eradicate any benefits you will receive. It also may indicate that your financial position or spending habits may suggest that you shouldn't be using your credit cards aggressively if you are already carrying that sort of debt.


It takes an organized  and responsible individual to become a successful travel hacker, yet US credit card debt stood at over $1 trillion. I do not advocate rewarding yourself until you are able to get your own financial houses in order, thus if you are able to pay off your credit card completely each month without ever paying interest, then read on!



First thing you should identify is your travel goals. Do you want to visit your family every holiday season? Or maybe do you want to take a spectacular vacation every couple of years overseas? 


In my opinion, the best value to be had for traveling with points is at the premium cabin, long haul flights. These flights can often cost in excess of $10,000 if you paid cash and highly unlikely the average person will ever pay those kinds of cash costs in their lifetimes. Yet, either through credit card signup bonuses, or careful planning of your daily spending, you could organically earn yourself a ticket within 12 months without stretching yourself too thin.


The key is having a good handle of your daily organic spending and matching that spending pattern to the credit cards where you can meet their signup bonuses, or if they have a bonus category that offers the most point generation.


A first class, round trip ticket to Asia or Europe on a tier 1 airline can run anywhere from 150-200k points. Yet for example the American Express Personal Platinum can earn you 100k points with a minimum spend of $5,000, or cards like Citi's American Airlines AAdvantage World Elite Mastercard where you can earn 60,000 miles with American after $3,000 of minimum spend.


If you plan your signups carefully, a person can easily stockpile a stash of points that can redeem for a first class round trip experience just on signup bonuses alone.


Now for a quick math geek moment: Many statistics shows the average American household, averaging 2.5 persons per household spends close to $65,000 per year. That means on average a single person would spend about $26,000 a year on living expenses, averaging slightly over $2,000 per month. Thus just by fitting your average organic spending into credit card spend, most signup bonuses should not be out of reach for the average American to meet.



Many of my millennial peers often bootstrap their living expenses to the max, almost to an art. But unless you live rent free without a car or any sort of living expenses at all, there are still ways to generate points and miles out of a frugal lifestyle.


Many people simple say that they don't have any charges they can put to credit cards from a frugal lifestyle, but this is where you have to get a bit creative and use the resources available online at your disposal.


Sites like Plastiq can charge your credit card to issue a check to a landlord or anyone you have to pay who does not typically take credit cards. While the fees of some of these services can be steep (2.5%+ often), if you need to meet a minimum spend requirement, these sites may be able to help you meet the spending for you to bank signup bonuses that could be worth into the thousands in cash value.


You can also pay the IRS taxes owed using a credit card for a small fee as well. Taxes is one thing where it is inescapable in life, so if there was an opportunity to generate points on what could potentially be a massive bill depending on your income, as long as the fee is justified I would do it.


I love the monthly valuation of points offered by The Points Guy (Link to the Nov 2017 valuations here) that I often use to evaluate if it is worth it to pay a fee to earn points. For example, the IRS charges 1.87% for your tax payment with a credit card, so while I would gladly pay with a SPG credit card that earns 1x point valued at 2.7 cents per dollar (2.7% rebate value), I would unlikely use a Marriott credit card earning points valued at 0.9 cents a dollar on every day spend (0.9% rebate value).


Generally speaking, if you can pay someone with a credit card for spending you already have to do, figure out ways to do it with a credit card, as long as the fees are reasonable there should be no reason not to. (In my opinion, any fee under 2% is a no brainier for me, after all, I can use a 2% cashback card to make that back.) 



Even if you work a regular job, have a frugal lifestyle, doesn't own a business spending tens of thousands a month, most people can still get into the game... if they are informed and tactical about it.


I do not believe spending is the barrier to entry for miles and points, but rather your interest in travel and finding good value, as well as a good level of organization and self control over your financial assets.


For those who are willing to do the homework and research the best values to get to a certain destination, or taking advantage of rewarding credit card offers are likely going to be the ones who will be able to take advantage of these programs for the long term. Hopefully over time, I will be able to offer new insights as well as deals that can help you with finding the right tricks to max out your value.


How did you get started in points and miles? Got any trip success stories? Comment below!

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