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(FAQ) Guide to Cheap Vacation for Newbies : Feb 28 2016 edition

Faqs

Guide to a Cheap Vacation for Newbies

Feb 28, 2016

This is Version 3 of the plan. A big change in the version is that I've named it as a Guide to Cheap vacation instead of Free. This acknowledges that even thought Miles and Points can cover airline ticket and hotels, your vacation will likely have some out of pocket costs.

Note: For folks who has followed the plan, would love to hear some success stories and feedback.

Introduction

Well, the landscape of this game has changed quite a bit over the past year. It's time to revise this plan, especially for folks who are just starting out this game. There are a number of cards that people really should get up front, or else miss out all together. Remember, the goal here is not to maximize your points, but just get a mostly free vacation paid using credit card bonuses. Note, as the time of this writing, Chase's 5/24 rule has not been applied to all their co-branded cards. This article is written in anticipation of that change.

A lot of new folks come to r/churning, read about the fantastic deals people are getting, and can't wait to get in on the action. Some may read the Wiki first, many just get trigger happy and want to apply for the Best Card. Some end up unable to meet the minimum spend, or have points that doesn't quite meet their needs.

Here is a step by step guide on how you, as a newbie, can get a cheap vacation, with no drama, no fuss, and improve your credit score. Some may see this plan as too conservative. Some know that you can get a lot more. However, this guide is aimed at folks that haven't spent the last 120 hours reading through this sub or Flyertalk.

This guide reflects my personal thinking. I don't believe in AoRs, and I believe in maintaining a good relationship with each bank. I am not opposed to paying minimal annual fees to help me reach my goals. You are free to disagree.

Recommended reading before you start:

##Goal##

The goal is to get a cheap vacation, somewhere in the lower 48 states, with flight and hotels paid for entirely with points. Also with some additional points for the future trips. Why mostly free? Well, points/miles can cover most of your travel costs, but you would likely still have to pay taxes, fees, food, ground transportation, etc.

If you follow the guide, you should end up with a better credit score, larger credit line, and the freedom to take advantage of limited time offers. You will not be measuring inches on how many points you earned in the last 6 months. This is also not going to get your Business Class travel to Asia or Europe by itself. It can give you a good start towards that kind of aspiration travel.

Your credit scores will drop 3-5 points after each application. If you handle credit correctly, the score will recover in 3 months or so. If your credit score drops significantly more, stop and figure out what you are doing wrong. Do not start on this plan if you plan to get a Mortgage in the next 12 months, or a car loan in the next 6 months.

##Pre-requisite##

Like all things in life, you have to meet some requirements before you start. Again, some will think I am too conservative, but I want to make this as straight forward with no drama. I also want to make sure you don't dig yourself into a financial hole.

  • Monthly Spend: You should already be spending over $1000, preferably, $1500 a month on Food, Gas, Insurance, Rent, etc. If your monthly spend is much less, you really aren't quite ready for this yet.
  • Emergency Fund. Do you have at least 3 months of living money set aside? If not, don't start until you do. You may need to float money onto a credit card, or have your money tied up in the wrong place.
  • If you have Credit Card or personal loan debt, and I don't care what the APR is, stop. Don't start churning until you pay those off.
  • Your credit score. Know how to pull your Credit Report, and make sure your score is over 720.
  • Your credit history. You should already have 1 or 2 credit cards, for at least 2 years. If you don't, wait until you do, since it is usually harder to qualify for reward cards.
  • Have a spreadsheet ready. You will track each card application date, annual fee, minimum spend. You will also track how much you actually spend.

##The Plan##

This plan is current as of February 2016. This plan will have to be modified as CC offers comes and goes. When applying for cards, always try to see if there are referrals or better deals on this sub. Using a referral will help community members to earn more points.

###Day 0###

To start on this plan you need to do some prep work. You should go to the following websites, and sign up for each companies Frequent Customer program. Note down your Program ID, username, and password. You will need this information as you apply for affiliated credit cards, or when you want to transfer points to these programs:

One benefit about signing up these programs, is that they often will email new members invitation to the best credit card deals. One negative, is that you will begin to get emails from each of the program and the deals they are pushing. So be forewarned that it is a blessing and a curse.

###Day 1 : Chase Sapphire Preferred (CSP)###

Apply for the Chase Sapphire Preferred (CSP), and add an authorized user. The AU should be someone who does not plan to apply for any Credit cards from Chase. After meeting the minimum spend of $4000 over 3 months, you will earn 59,000 UR points, easily redeemable for $590 cash back, or 2 RT domestic tickets by transferring to Southwest, United, or British Airways and then fly on AA or Alaska. If you are on the west coast, this one card alone can fly two people to Hawaii.

This card is the the first card you should get due to Chase's new rules. Read the Wiki for more info on the Chase 5/24 rule. We are going to get more Chase cards soon, so make sure you keep putting some spend on the CSP, and pay it off monthly. This card does have an AF of $95, waived for the first year, but have some great benefits that may make it a long term keeper.

The things I would always pay with the Chase CSP:

  • Airline Tickets (Taxes and Fees) due to Trip Interruption Insurance
  • Rental Cars due to Primary Rental Auto Insurance
  • Restaurant Meals when I'm not meeting the Minimum Spend on another card

Put your everyday spend on the new CSP. Pay off your statement balance each month. You should never pay less than the full statement balance. If you can't pay the full statement balance for whatever reason, stop. You aren't ready for this hobby. Also, if you find yourself spending MORE money each month for MORE points, stop.

###Day 91: Chase IHG ###

Apply for the Chase IHG card if you can find the offer with 80K IHG points. 70K would be OK, 60K plus $50 statement credit would also work. This card has a low minimum spend of $1000, so you should be able to knock it out in 30 days. The 60-80K IHG points can get you 2-3 free nights in a Holiday Inn or Holiday Inn Express, located almost anywhere you want to travel. This card does have an annual fee of $49 waived for the first year, but it offers a 1-night certificate every anniversary. This certificate is really the value of this card, as you can use the certificate at a high end Intercontinental anywhere around the world. So for a $49 AF, you can get a free night that is worth up to $600 or more.

Again, keep spending and paying on both the CSP and the IHG card. We want Chase to like you for at least one more card.

###Day 181: Chase Marriott ###

Apply for the Chase Marriott card, which often has a 80k point offer. This card has a low minimum spend of $3000 and an annual fee of $85, waived for the first year. Like the IHG, it also offers a 1-night certificate every anniversary, BT more limited as you can only use it in a category 1-5 Marriott property. This certificate is less valuable as Marriott continues to erode their program, but for domestic traveling and a bit of flexibility, you should still be able to get decent value out of the $89.

Note, a good argument can be made here to get the Chase Hyatt card here instead of the Marriott card. If you have the plan to use the 2 Hyatt free nights in the next year, it s arguably a better choice. I didn't go with the Hyatt simply because there are a lot less Hyatt properties, which makes using them more difficult.

Up to this point, we have applied for 3 Chase cards in 4 months. We're probably at a reasonable limit with Chase, and it is time to go and get more airline miles.

###Day 271: Citi AA Platinum###

Apply for the Citi AA Platinum with 50k miles after $3000 spend. Ignoring the other benefits of the card, this one single application will get you 2 RT tickets in the US. Citi will also give you free FICO score about every 60 days or so, useful to keep track you score on a continual basis. Citi is also currently sending out 60K AA miles offer for this card, so you can potentially earn even more.

###Southwest Companion Pass###

There is a Megathread on the Southwest Companion pass. If you can fly Southwest, and have 2 travelers, the CP is a great deal. However, due to Chase's new rules, getting the CP would mean you have to start with the Chase Southwest Cards first, likely preventing you from getting the CSP or IHG card for maybe up to 2 years. If the CP is your top priority, apply to those first, but expect to get denied for the CSP and IHG when the time comes for those.

What have you got so far###

At this point, you should have cumulated the following:

  • 59K+ Chase UR Points (2 Free RT Domestic United/Southwest/AA/AS tickets)
  • 53K+ AA Miles (2 Free RT Domestic AA/AS flights)
  • 60-80K+ IHG Points (2-3 free nights)
  • 60-80K+ Marriott Points (1-3 free nights)

If you transfer UR points to Southwest route, you can travel to certain destinations in the Caribbean as well. You may also have enough points to get two people to Hawaii by transferring UR to Avios, depending on where you are located in the states.

Note that the plan calls for a new card every 3 months, plenty of time to meet your minimum spend. You never have to do MS to try to meet the minimum spend. This plan also gives you flexibility to change. For example, if an AmEx or Citi card pops up with a great offer, you can jump without worrying about too many hard pulls in the last 3 months. Just note that if you add a card into the mix, delay the rest of the plan appropriately so you keep the HPs and spacing in place. Note that once you applied for 5 cards overall in the last 2 years, you would be locked out of further Chase applications.

Previous versions of this plan avoided hitting the same bank repeatedly. Given Chase's new rules, it makes sense to hit them fast for the key cards, then go on to the other banks. After you meet the minimum spend on each card, spread the remaining spends across all your active cards.

What do you do with all these cards after you get the bonus?###

The IHG, and Marriott/Hyatt cards all have good annual benefits, and is worth keeping and paying the AF. The CSP has some great benefits outside of earnings, and I would actually keep mine. However, if that $95 really isn't worth it to you, wait until the anniversary date, and call up Chase to product change to a Chase Freedom, which has no AF. So these 3 cards will help build you AAoA, and continue to give benefits.

The Citi AA is a good card if you travel AA a lot. You can cancel it 11 months in if you don't need those benefits, but note that you won't be able to apply for another one until 18 months after the date of closing the account.

I'm done with the the plan. Now What?###

The following cards are worth looking into for their benefits. If you want more Chase cards, you have to be sure that you haven't applied for 5 other cards in the last two years.

  • Chase BA Avios

  • Chase United MileagePlus

  • Chase Ritz

  • AmEx PRG 50K

  • AmEx Platinum 100K

  • AmEx Hilton Surpass 85K

  • AmEx SPG

  • Citi Hilton 75K

  • Citi Hilton Reserved

  • Citi Premier

  • Citi Prestige

  • Citi AA Executive

  • Barclays Arrival Plus

  • Capital One Venture

  • Bank of America Alaska Air

Posted Feb 28, 2016, 1:21 AM UTC · edited

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