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How to go from ‘clueless cardholder’ to ‘points hacker’ in 9 steps

Cynthia Drake
Personal Finance Writer
Uncovering quirky, offbeat financial stories

Rewards guide: From clueless cardholder to points hacker

Chances are, you’ve heard stories about friends or colleagues who have taken trips around the world using only their airline miles and credit card points.

If you’re like the average credit card user, you may have a vague idea about how the system works and might have even cashed in a few points on occasion. However, the system of racking up points across multiple cards and cashing them in can often seem overwhelming and complex.

Enter: the points hackers. These are experts who understand that the fastest way to rack up travel points is actually not by traveling – but by making judicious use of credit cards that offer hard-to-resist bonuses in exchange for meeting certain spending requirements.

We interviewed a few points hackers who have assisted people in earning millions of points to help distill the key concepts behind achieving points savviness. Who knows? Maybe you’ll be the one bragging next about your points-funded trip to the Maldives.

See related: 10 common travel credit card mistakes you need to avoid

1. Commit to the ironclad rules of points hacking

Even the most extreme points hacker is quick to point out that people interested in entering the “game” only do so without the risk of falling into financial ruin.

“When you have a spend requirement, the No. 1 rule is you do not spend more than you actually do spend naturally to get miles,” says Nico Atienza, concierge at the Travel Hacking Cartel, who once racked up 1 million miles in a year using credit cards. “Calculate your monthly expenses that you can charge on a credit card.”

  • Next: pay your credit card off in full, every month. Paying interest on your card will quickly cancel out any potential travel rewards.
  • Finally, don’t embark on a quest for points if you plan on buying a home within the next one to three years. “If you are trying to buy a home, we do not recommend it” due to the red flags multiple credit card sign-ups will signal for lenders, says Atienza.

2. Set a goal

It may seem appealing to jump right in and start raking up the miles and points, but experts advise that people should come up with a goal first in order to determine their next steps. For many people, this means planning for a dream trip.

“What’s your goal, and where do you want to go?” says Adam Morvitz, CEO and founder of Juicy Miles, which assists people in redeeming their points. The majority of his clients are honeymoon couples starting from scratch with very few points, who want a first-class flight and an overwater bungalow in Bora Bora for free.

Those decisions will guide you in terms of which credit cards to sign up for in order to achieve the desired number of points or miles.

About 50 free-honeymoon-in-Bora Bora-type requests come in each week, Morvitz estimates – and, yes, he helps make them happen (for a fee), usually coaching the couples through it in about a year.

Goals can be big or small, and you can pursue them aggressively or with a more laid-back approach, like Karen Presley Dawkins, who blogs at Family Travels on a Budget. The North Carolina travel writer and planner saved her points for four years in order to earn a free seven-day cruise for her 25th wedding anniversary.

“That was kind of fun – low stress,” says Dawkins, who doesn’t consider herself a hardcore points hacker. “We took several free Disney vacations with points when the kids were younger, and we also pay a lot of car rental fees with points.”

“If you want to consistently play the long game… you have to note down when you applied for [each credit card]. The clock starts ticking when you are approved… You have to be very diligent.”

3. Learn the art of applying for new credit cards wisely

Applying for a new credit card in order to receive a generous sign-up bonus can be a smart way to up your rewards game – if you know how to do it.

Many people hesitate going on credit application sprees out of concern about the impact of applying for too much credit on their credit scores.

While it’s true there may be downsides to applying for new credit lines, if you follow the rules of paying off your credit in full and on time – and not applying for too many cards all at once – your score may actually improve.

You’re going to take a few-points hit for applying for the card – usually, every hard inquiry shaves five points off your credit score, according to experts –, “but if you’re paying it off on time and adding more credit, your credit utilization is going to go down,” says Morvitz, who says his score is “pristine” despite owning 23 open credit card accounts.

Before applying for a new card, however, you may want to consider the benefits the card may offer beyond the sign-up bonus. You don’t want to apply for a credit card you know from the get-go you’ll want to cancel after earning the sign-up bonus. 

Tip

Tip: Credit utilization, the amount you have borrowed compared to your credit limits, is the second most important factor in credit scoring calculations, after making on-time payments. Experts advise to keep a credit utilization as low as possible, where 10 percent is great, but 1-2 percent is optimal. Read “Credit utilization: How this key scoring factor works” to learn more.

4. Get organized

True points hackers have been known to sit around comparing spreadsheets. Those organizational tools, including websites such as Award Wallet, are crucial to them in terms of keeping track of their numerous cards, points and important dates.

At minimum, your spreadsheet should include each card you hold, the date you signed up and the time period stated for your spend requirement – for example, 100,000 miles for a $5,000 spend within three months. Also, note any annual fees associated with your cards.

Then add all those dates to your calendar. These dates are important, because if you hit your spending requirement even a day late, you risk losing out on those points.

“If you want to consistently play the long game with credit cards, you have to note down when you applied for it,” says Atienza. “The clock starts ticking when you are approved for the card. You have to be very diligent. With every new card, I have to rotate them between all my monthly expenses.”

See related:5 ways to maximize card rewards earning potential

5. Get creative with your spends

Once you’ve found the cards that can help you reach your travel dream goals, it’s time to start earning by spending. But since you’ve committed to only spending within your means, achieving your spending requirement might require a little creative thinking.

“Have purchases lined up,” says Atienza, who once finagled financing a new car down payment with credit.

Take a look at all your monthly expenses – from major ones, such as rent and utilities, to the smaller ones, including filling up the tank and that morning coffee on your way to work. 

Review your most common everyday expenses and look for a card that offers rewards on those purchases, be it groceries, dining out or gas.

As for monthly bills, ask your bank if it’s possible to put them on your card, or look into a third-party service, such as Plastiq, which will allow you to make a payment with credit card for a small fee. “If that’s going to get you a $3,000 flight, totally worth it,” says Atienza.

Tip

Tip: Before charging monthly bills, including mortgages, college tuition, auto loans and utilities, through a service like Plastiq or Tio, consider the convenience fees they charge – usually between 1.9 and 2.5 percent. The cost of using these services might cancel any rewards you’ll earn for putting these charges on your card.

6. Burn your points wisely

After you’ve earned your points target, cashing them in may seem like a no-brainer, but using your rewards can be one of the most complex pieces of the puzzle.

“That’s another confusing mess,” says Atienza.

You really should use your points (or “burn them,” as the points hackers say) – within about a three-year window. Any longer than that and you risk points expiring or airline and hotel rewards programs changing and devaluing them.

“Airlines don’t want you to get the best value for your miles, and so their websites are designed to really show you flights that are operated by them and a few select partners, and usually at a higher level. But you can always redeem with a partner at the lowest possible level,” says Morvitz, who originally started out booking award flights for his co-workers as a hobby.

See related:When do credit card rewards, airline miles, hotel points expire?

Tip

Tip: Learning the ins and outs of rewards points’ earning and redemption options is key for becoming a points hacker, but each program has its own rules. Our guides to most major rewards credit card, frequent flyer and hotel loyalty programs include everything you need know to maximize your rewards:

7. Think twice before canceling your cards

Once you’ve achieved your spend requirement and cashed in your points, don’t be so quick to cancel your cards, say the pros.

First of all, canceling cards within a short period of time after opening them is a red flag to future creditors. It can also hurt your credit by increasing your credit utilization due to the reduction of your available credit and/or shortening your credit history, especially if the card’s been in your wallet for a while.

Alternatively, letting the accounts stay dormant (even if the cards just sit in your desk drawer) can help you continue to build your credit score.

Some cards offer additional perks that might make them worth hanging onto for your future travels, such as free checked bags, companion tickets, airport lounge access and more.

Don’t want to continue paying that high annual fee? Don’t be shy about calling your bank, says Atienza. See what kind of incentives they might offer in order to retain you as a customer.

Tip

Tip: If you think asking for a lower fee on your credit card might be a lost cause, think again. A 2018 CreditCards.com survey on card fee waivers found 70 percent of those who asked had an annual fee waived or lowered. And 85 percent of those who asked received a higher credit limit.

8. Follow points-hacking blogs – or consider hiring some help

Points hackers chase points by following websites and blogs designed to alert readers about the latest card deals, such as FlyerTalk and The Points Guy. The information is out there and freely available for people who are interested in keeping regular tabs on the industry.

If you don’t have the time, ability or interest, consider hiring one of the concierge services. The cost of hiring someone to help you strategize your path to a dream trip, and then help you book it, is minimal compared to your potential savings.

“It’s very easy to talk about sexy, luxury flights, but that might not be your goal if you have three children and you want to take them to Disney World.”

9. Remember this is a hobby

For most people, points hacking is really a hobby, and it can actually be fun. But when it’s more stressful than fun, it might be time to re-evaluate.

“Have that mindset that it’s a hobby,” says Morvitz. Some people get in a trap of maximizing the value of every point that they’ve accumulated, to the point that they won’t cash in their points for trips they might really want to take.

Instead of focusing so much on the cost per point, reframe your thinking to consider the fun per point, he says.

“It’s very easy to talk about sexy, luxury flights, but that might not be your goal if you have three children and you want to take them to Disney World,” he says.

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