I believe in setting LARGE GOALS! That’s why, as soon as I started realizing what credit card points could do for me and my family, I decided to try to take my family of six to Europe entirely on credit card points. Most of us have never crossed the big pond before and being able to provide a European Vacation for my family is certainly a dream come true. Online sellers like me spend a lot of money (and can accumulate a lot of credit card points,) so I am fortunate that my “spend” is quite high. I started out by following the three steps outlined here. Many thanks to Keith Crowe for inspiring me every step of the way.
HERE WE GO! Let’s start at the basics and get familiar with what our current credit cards are doing for us. This program is ONLY for folks who are currently in a position to pay off their credit cards each month—if you are carrying any type of balance, the interest you are paying more than negates the rewards you can get. So, please, if you carry credit card balances, getting your credit card debt down to zero is your very first priority. Get it to zero, know you can keep it there, and then come back and pursue your free travel points.
1.) What is in your wallet? The first step you need to take is to look at your current credit cards and see which benefits and rewards these cards have. Ideally, your credit card should have 1% (or better) given back in rewards and no annual fee (there are exceptions to this—only pay an annual fee if it is more than offset by benefits.)
Take out your credit card, go to your bank, go online, and figure out exactly what benefits your current card is offering. This will give you a starting point. Also, notice, your card may give you double or better points in certain categories. Learn what those categories are. If you have certain cards with certain generous category rewards and other cards with different category rewards, take a Dymo sticker and write down the best categories for that card and attach it right to the card. This will help you use the right card for the right occasion.
Do not cancel any credit cards, however. Even if you discover one that has no benefits to you, just leave the balance at zero and leave it open. The reason for this is that your credit score is partially dependent on the length of time you have held credit cards. Closing a long-term credit card can negatively affect your credit score.
2.) What is your credit score? Next, take a look at your credit score. There are lots of places where you can get this information for free—I used Discover.com and learned that my credit score is currently 749. Our goal is to take out credit slowly over time and not negatively affect our credit score. My mentor has a couple of dozen credit cards and a credit score close to 850, so I know this can be done. We want to know what our credit score is before we start the program so we can monitor it as we add credit cards to our wallet. Again, if we approach this correctly our credit score will stay the same (or even rise) as we take out more credit.
3.) Quit taking “sucker bets” with the points you accumulate on your current credit cards. The LEAST value you can get from your points is in cash back, gift cards or magazine subscriptions. For now, let your points accumulate. We will show you MUCH BETTER options on how to spend your points in future posts (as I learn this along with you.) For now, let your points rack up and know you will be using them for great travel benefits soon.
When I started this program, I had the Chase Ink for Business and the Chase Freedom card. I learned that the Ink for business gives me double points when used at Staples, Office Depot or Home Depot. I learned that the Chase Freedom card gives me 5 times points when used at restaurants (this category changes every quarter.) I started using the Freedom when I was eating out and the Ink when I was buying supplies for my business.
So spend some quality time reviewing your current credit cards and learning how you are currently getting point, look into your credit score and stop cashing in your points—you are on your way.