Several years ago, I was in a motorbike accident in Malaysia and broke my leg. It took 3 years and 12 surgeries to recover – long story! Due to my circumstances, I was not covered by insurance. You can imagine how difficult this was physically, emotionally, and financially. I’ve always been a very optimistic person though, and my one little upside was that I’d have a ton of credit card points to use for a trip back to the USA to see family once the ordeal was over.

At the time, my wife and I had a Malaysian credit card that earned us points which didn’t expire. These points could be transferred to Krisflyer for flights on Singapore Airlines. I wasn’t wrong that we would earn enough to redeem 2 free flights from Malaysia to the USA and back, but if I knew what I know now we would have probably earned enough for 20 free flights and a ton of free hotel rooms.

The credit card we used earned us very little points per dollar spent, and these points had a horrible conversion rate to miles. Our spending was not optimized!

I now earn 20% – 30% back on all of my family expenses by taking advantage of credit card sign up bonuses and optimizing my spending on cards that reward me the most.

My goal is to take my wife and 2 daughters on a big holiday every year – either back to the USA to visit family, or to some far-off destination completely new to us. I want free flights and free hotel rooms. I want to be able to go anywhere we’d like to go, and I want to have money to spend when we get there.

This goal has become a reality for my family. We do this by putting all normal expenditure on credit cards. By normal I mean paying for daycare, school, groceries, gas, insurance, bills, eating out, and E-Wallet reloads. We always pay our credit cards off on time and never pay interest. If we have a big expense coming up I will plan how to maximize our return through credit cards – usually a new sign-up bonus.

We are able to put $1,000 to $2,000 on credit cards monthly and easily earn enough in rewards for 2 holidays a year worth over $10,000 each.

Credit cards used wisely provide benefits that far outweigh the annual fees. To many people simply use the credit card they have. At minimum, you should have a strategy to optimize your spending on cards to maximize your return in points, miles, and perks. Take it a step further and earn 20%-30% back on all of your spending – all in a ‘travel piggy-bank’ ready to redeem free flights and hotel rooms.

3 Types of Credit Card Users

1. Casual – you use whatever credit card you have without much understanding of its’ perks or return in points. You are missing out!

2. Optimized – you have a variety of credit cards and fully understand their perks and return in points. You use the correct credit card according to the type of spending to maximize return in points and miles.

3. Churner – you constantly sign up for new credit cards to earn Sign Up Bonuses (SUBS).

I’m a hardcore Churner and sign up for a new credit card every 2 to 3 months. This requires an in-depth understanding of each banks rules and regulations, which are not often publicized. It is a hobby to many of us – a hobby that earns 20%-30% in return from all of my spending. This allows me to take my family of 4 on two big vacations per year. Would you believe I only put $1,000 to $2,000 on a credit per month and achieve this? It’s true.

I do not recommend all of you to become Churners, but I do recommend signing up for 1 to 2 new credit cards annually for the sign-up bonuses.

Optimize Your Spending

1. Keep things simple – choose a single credit card for all of your expenses

This is probably going to be a Venture Rewards or Venture X from Capital One. These cards earn you 2 points per dollar spent in all categories and come with a variety of perks and benefits.

2. Category Combo – choose a combination of credit cards that earn bonus points in different categories

Different cards offer bonus points for spending in specific categories such as groceries, gas, dining out, streaming services, etc… Take a look at your monthly expenses and identify credit cards that offer the best rewards for how you spend.

Be sure to know that the points earned and benefits offered outweigh the annual fees.

4 Types of Credit Cards

1. Transferrable Points

All banks in the USA offer credit cards that earn transferrable points. These points can be transferred to airline or hotel partners to redeem free flights or hotel rooms. Most of the time, these points transfer at a ratio of 1 point for 1 mile or hotel point. There are often transfer bonuses of 20% – 70%.

Signing up for our newsletter is a sure way to not to miss out on a transfer bonus.

2. Cash Back

It’s worth noting that you can earn points from a cash back card. Banks like Chase   and Capital One reward you in points when you spend on a cash back card, which you then cashout to your bank account. If you have a point-based card you have the option to transfer the cash back points to your point-based credit card. These points are more valuable when transferred to a partner airline or hotel for free flights or hotel rooms.

3. Cobranded

These credit cards earn points or miles for a specific loyalty program and are usually not transferable, or at least not transferable at favorable rates. An exception to this is Avios miles, which are transferable 1:1 between all Avios partners.

These cards can be a great way to earn miles in loyalty programs that offer incredible value and don’t have transfer partners. For example, American Airlines AAdvantage offers award flights at incredible value within the One World Alliance. AAdvantage does not have a transfer partner – meaning the only way to earn AA miles is to fly or use a cobranded AA credit card.

Cobranded credit cards usually offer perks such as first checked bag free, priority boarding, discounted award flight redemptions, lounge access, hotel room upgrades, and automatic loyalty program status.

4. Business

Many people believe that you need to own a business to open a business credit card. This is not true. If you sell cookies to your grandma, you are eligible for a business credit card.

Providers of business credit cards state that these cards are only to be used for business expenses, but in reality they aren’t paying attention and don’t care. As long as you pay off your credit cards on time you’re good to go.

So what’s the point of opening a business credit card when you can open personal cards? For many people, it is a good way to keep business and personal expenses separate. For others, it comes down to Chase’s 5/24 rule which we will get into below.

Valuable Rewards, Perks, and Benefits

Signup Bonuses (SUBS)

Banks usually offer attractive signup bonuses for being approved for a new credit card and spending a specific amount within a given time period. These can often be worth well over $1,000 and should not be ignored. It’s important to plan how you’re going to meet the minimum spending requirement to earn the bonus before applying for the credit card.

This should not be used as an excuse to spend irresponsibly. I will often prepay expenses like insurance, daycare, internet, or phone bills.

It is worth waiting for elevated offers to sign up for a card. For example, the Chase Sapphire Preferred (insert referral link) usually offers 60,000 points for spending $3,000 in 3 months, but often has an elevated offer up to 80,000 points. Those 20,000 extra points gets you up to 5 nights at a Category 1 Hyatt Hotel or an Economy Class flight.

Points and Miles

The most obvious reason to use a credit card is to earn points or miles. Generally, a point is worth 1 cent. When transferred to an airline or hotel partner, these points can easily be worth 2 cents or more.

Redeeming points for Economy tickets will usually get you 1.3 to 1.8 cents per point (CPP). Redeeming for Business or First Class can get you far higher CPP, but finding these award flights at good value is more difficult.

Redeeming points for hotel rooms can also be a great way to use points – especially for Hyatt Hotels. Be sure to read for more info.

Free Hotel Rooms

Cobranded hotel credit cards either offer signup bonuses as points or free night certificates (FNC). Points are preferable if you want to stretch them out by staying at cheaper hotels. Unlike most transferable points, these points expire – but can be kept alive by having any activity on your loyalty account (earn points, transfer points, or make redemptions).

Free Night Certificates (FNC) are always redeemable for 1 night each and up to a certain value. These FNCs usually expire in 1 year. I earned 5 x FNC with my Marriott Bonvoy Boundless Credit Card for spending $5,000 in 3 months (insert referral link). Each FNC was valued at up to 50,000 points. I redeemed these for 5 nights at the St. Regis Istanbul, which was going for over $700 per night. It was by far the nicest hotel I’ve ever stayed at, and I would never splurge for such luxury with my points or cash. It was a great experience!

Hotel cobranded cards usually give you 1 FNC each card anniversary, which makes up for the annual fee all by itself. This is how they get you to keep the card!

Lounge Access

Many travel credit cards offer free airport lounge access. This can be a great way to save money on food and drinks in airports. American Express, Capital One, and Chase all have their own lounges at select airports – and offer cards that get you free access.

Priority Pass gets you free access to thousands of lounges globally, and is offered for free with certain credit cards. The Capital One Venture X gives me unlimited access for myself and 2 guests for as long as I have the card. This saves my family an incredible amount of money annually.

Insurance

Most travel credit cards provide travel and auto rental insurance. This is an obvious way to save money and gives you peace of mind while traveling – or before you even travel!

My buddy redeemed 3 Business Class tickets from Bangkok to London, and the day before the flight his 2-year-old son got very sick. He had to hospitalize his son for 2 days and missed the flight. He had paid the small amount of fuel surcharges and fees for his award flights with his credit card. His son’s medical expenses, the hotel rooms, and new airline tickets were all covered by the travel insurance.

Not all travel insurance is equal – be sure to compare various cards if this is important to you. American Express only offers coverage if you purchase or redeem round-trip tickets.

A ton of cards offer Auto Rental Insurance – another great way to save money! Again, be sure to know what type of insurance each credit card offers. Some do not cover you within your country of residence, and if they do may only offer Secondary Insurance – meaning it only covers you beyond what your personal insurance covers. Some cards offer Primary Auto Insurance, which is crucial if your own insurance does not cover you beyond your own car within your own country.

Foreign Transaction Fee

If you live outside of the USA or plan to use the credit card while traveling internationally, it is important to take note of any foreign transaction fees. These fees can often be up to 3% – easily outweighing any points you earn from expenditure.

Most travel credit cards do not have foreign transaction fees, and actually have very good foreign currency exchange rates. I have compared the rate my card gives to what my XE App says the exchange rate is – the credit card always wins by a noticeable amount.

Churning and Earning

Churning credit cards is the fastest and most effective way to earn an incredible amount of free flights and hotel rooms. It is a hobby that allows you earn 20% to 30% back on all of your spending. Churners constantly open new credit cards to earn the signup bonuses. It is not a hobby that banks love, but if done properly you can stay under the radar and always be spending towards a new signup bonus.

Banks allow this to an extent, as people like me go out of their way to market credit cards to people. Banks know statistically that a certain number of people will end up paying interest on their credit cards – I suppose churners are an accepted marketing expense. That being said, the most important factor is to never pay interest on your credit card. Pay your bills on time!

I do not recommend most people to church credit cards, but I do encourage people to sign up for at least 1 to 2 new credit cards every year. I think it’s kind of crazy not to earn a free round trip ticket or a ton of free hotel rooms every year. Banks literally earn 10’s of billions in profit every year and freely offering you a paid vacation – as long as you don’t screw up and pay interest.

I’m often told by people that they don’t know if they can meet the minimum spending requirement to earn the SUB while at the same time telling me they can’t come visit me overseas due to the cost of flight tickets. Meanwhile they go out and buy a TV, RV Camper, or a new dining room table with cash. If they had put these expenses on a new credit card they’d earn the SUB rather easily and be well on their way to a round-trip ticket just about anywhere in the world.

Everyone – and I do mean everyone – has large expenses at some point every year. We all pay for insurance, right? Sit down, think about your monthly expenditure, write down any big expenses you have annually, and plan how you’re going to earn a SUB.

I’m pretty sure I have your attention now. You’re probably starting to think of your annual expenses and where you’d like to go on vacation. Some of you are even thinking of getting into at least a minimum level of churning. Don’t go full out until you fully understand the game. You need to understand the unwritten rules each bank has. You need to stay under the radar and use this to improve your credit rating – not destroy it.

Rules Of The Game

1. Chase has a 5/24 rule related to new credit cards. This means that you will not be approved for a new card if you have opened 5 personal cards from any bank within the last 24 months. All banks have some sort of rule similar to this. Google the bank’s 5/24 rule (which will not be 5/24 if not Chase) before applying for a credit card.
2. You do not need to pay the annual fee for the rest of your life. Be sure to keep cards for a minimum of 1 year. You may call to downgrade or cancel your card after the 2nd annual fee (AF) hits your account. The AF will be reimbursed. It is preferable to downgrade to a card with no AF vs. cancelling the card. This keeps the bank happy.
3. Any hard inquiry will temporarily lower your credit rating. Be sure to check if you are pre-approved before applying.
4. The new and increased line of credit available to you will cause your credit rating to improve – the more credit you have available that you use wisely works to improve your credit rating
5. Almost all cards have regulations stating how long you must wait before signing up for that same card to earn the SUB a 2nd time. In most cases this is 24 to 48 months. Yes, you can earn the SUB on many cards more than once.
6. American Express has a once in a lifetime policy. This means that you cannot earn a SUB for the same card more than once in your life.
7. If you are married or have a friend to partner with then you have the opportunity to play 2 player mode. Refer each other for credit cards. Referral bonuses can be pretty awesome, don’t affect your credit rating, don’t require you to spend more, and don’t have an annual fee.
8. Business cards do not count towards Chase’s 5/24 rule, but to open a Chase Business Credit Card you need to be under 5/24.
9. Target Elevated SUBS and rotate banks you open cards with.
10. Points and miles depreciate in value. The cost to redeem flights inevitably will go up – so churn and burn! Don’t save millions of points for a vacation you may never take.