Beginner’s Guide to the “Points Game”
One of the most common questions I get when I share my experiences and the fun I’m having is how to get started with travel rewards. I am always happy to share, since getting more people involved makes it more fun.
A few short years ago, I was a beginner myself, starstruck by Ethihad Residences and Singapore Suites (both of which are still on my bucket list). Since then, it’s become a full-blown hobby for me. The good news is that it’s easy to get started, anyone can take part, and it can lead to some unforgettable experiences. And, you can still get a lot out of it even if you don’t do it as much as I do.
After all, what I do may not be what everyone wants to do. I personally like to call it “the Points Game” because I do think it’s fun to play. But, I also recognize that not everyone has a ton of spare time to spend on it! There’s a whole spectrum of involvement, from the person with one credit card to people who write about this stuff every day. Even if you keep it simple, like most things in life, there are things you can do to be more effective.
With that in mind, I’d like to share my experiences and give you some things to think about. I think you will be excited to see what’s possible!
When starting in the points game, I focus on credit cards. For beginning travelers, this is the easiest way to rack up points and hit goals sooner. Seasoned travelers and people who travel for work may have other goals — status, VIP programs, etc. — but this isn’t the article for them. This is for getting started.
Considerations
Before delving right in, there’s some things to keep in mind:
- What’s your current status?
Your credit and spending determines which cards you are eligible for. Are you looking for a low interest rate card to pay off debt? Do you need a card to help build your credit rating? Or, are you a credit king who’s ready to dive into the deep end of big intro bonuses?
- What are your goals?
The biggest differentiator here is whether you want to try and get lavish travel experiences (this is what I target), or you just want the most cash back.
For me, stacking up travel rewards enables me to have the occasional VIP experiences, which otherwise wouldn’t be possible in my budget. It’s also the way to get the most theoretical value. But, if you’re saving up for your kid’s college education, or focused on paying your mortgage as fast as possible, cash back may be where it’s at!
If you’re not sure, I recommend giving at least one extravagant travel experience a try. Pick up an airline card and a card with transferrable points (like the Sapphire Preferred), and together, they should be enough for a first class international flight one way. It can be a life-changing experience, like my first international first class trip (on an Asiana A380) was.
- How much time do you want to invest?
Would you rather get a few good cards and hold them, or put in time to get different cards and maximize value?
All of these answers may change over time, as you experiment and as other factors in your life change (e.g. relationships, work, etc.)
Beginner’s Guide
Here are some things you should be aware of from the getgo:
Intro Bonuses are usually the highest ROI (if you have good credit)
5% cash back on categories via the Discover It card (actually 10% for your first year) is awesome. So are 3-4x points on flights, restaurants, and supermarkets via the AMEX Gold Card. You should have them in your arsenal. However, the highest value back is usually from intro bonuses.
For example, the current offer for AMEX Platinum is 60k points (valued at $1140 in the latest TPG valuation) for $5,000 in spending, which is more than 20% back. Or, get 50,000 AA Points (valued at $700) for $95 and just one purchase on an AA Aviator Red Mastercard.
It’s also nice because it takes less effort than trying to maximize every category for the perfect card. Even if one card earns points faster, it often takes a significant amount of money spent before you will make up for a smaller intro bonus.
I always try to have at least one intro bonus I’m working toward.
If you decide to get a few cards, take note of each issuer’s restrictions.
- For Visa and Mastercard, this is set by the issuer behind the card, such as Chase, Barclay’s, Bank of America, etc. Discover and American Express issue their own cards.
- One of the most common and restrictive rules is Chase’s “5/24”, which limits people to 5 new cards per 24 months — across all companies, not just Chase. That may seem like a lot of cards, but I usually get at least one card per quarter (and you probably should too — see above for why). At that rate, I’d have to wait at least 9 months without any new cards to get another Chase card.
- This article has comprehensive details on the various issuers and their rules if you’d like to know more.
Keep a Points Valuation Guide handy to help quickly evaluate and compare offers
‘Nuff said.
You can get most business credit cards as an individual
Many credit cards have business versions, which you can use to maximize benefits and sometimes even to get around limitations. You can apply as sole proprietorship under your own name and using your social security number as your Tax ID (EIN). One example is doubling up on personal + business Southwest cards to get the Companion Pass. For more details, TPG has a complete article.
Let friends (or sites you like) refer you
If you apply via a link on a site (like this one), or via a referral link from a friend, it’s sharing free money with people you like. It can also sometimes get you a better deal.
I obviously like free money, but if you have friends with the cards you like, might as well share the love! It usually takes just a couple minutes and can mean a couple hundred dollars for your friends. If you’re looking at a card and don’t know where to get a referral, feel free to message me on Twitter.
Hopefully this helps you better understand the landscape. In my next post, I’ll share the best cards for your first forays into the points game!
Some links in this post contain referral codes so that I get some points if you enjoy this advice and sign up. I talk more about why that’s great here.
