How the Banks Want You to Travel the World for Free!

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Gary Leff and Daraius Dubash presentation at 2012 LA FTU.

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How the Banks Want You to Travel the World for Free!

  1. 1. How the Banks Want You to Travel the World for Free! Gary Leff – View From The Wing Daraius Dubash - Million Mile Secrets
  2. 2. Thank You Chase!
  3. 3. Thank You Banks!
  4. 4. How many have rewards credit cards? How many?How many miles did you earn with them last year?
  5. 5. Earning Miles & Points- Credit Cards- Debit Cards- Shopping- Dining- Banking/Investing- Promotions- Asking nicely!- Partners- Flying
  6. 6. Credit card sign-up bonuses are theEASIEST way to earn hundreds of thousands of points.
  7. 7. 1 MILLION+ miles/points in2011 from 16 credit cards!
  8. 8. 1 MILLION+ miles/points in2011 from 16 credit cards!
  9. 9. Million Mile Secrets Credit Score
  10. 10. Only 240,000 Miles to the Moon
  11. 11. Do NOT Apply for Credit Cards If You…Have amortgage in thenext 2 years
  12. 12. Do NOT Apply for Credit Cards If You…Can Not pay your balance inFULL each month
  13. 13. Earning Miles & Points – Credit Cards- How it works - Sign-up for card and get sign-on bonus (25K to 100K) - Usually have to spend a minimum amount, e.g $3,000 in 3 months - Then what?
  14. 14. What is theaverage householdincome in the US?
  15. 15. $50,000**2010 US Census
  16. 16. Earning Miles & Points – Credit Cards - Spend everything you earn, you’ll get only 50,000 miles/points - Pay-off is with the sign-up bonus, NOT everyday spending
  17. 17. Earning Miles & Points – Credit Cards- Churning is key! - Get same card again (YMMV):
  18. 18. How to Evaluate Credit Cards?
  19. 19. 3 Reasons to Get a Credit Card1) Big Sign-up Bonus - E.g. 100,000 Point British Airways - 50,000 Point Southwest
  20. 20. 3 Reasons to Get a Credit Card2) Most Rewarding for Actual Spending - E.g. American Express Starwood earns 1.25 miles - E.g United Club Card earns 1.5 miles
  21. 21. 3 Reasons to Get a Credit Card3) For The Benefits -E.g. American Express Platinum
  22. 22. SpendingSpending on Cards with no/low NET cash outflow - Amazon Payments $1,000 per month free
  23. 23. SpendingSpending on Cards with no/low NET cash outflow - Vanilla Reloads & Bluebird
  24. 24. SpendingSpending on Cards with no/low NET cash outflow - William Paid for Rent - Charge Smart for loans Pre-Paid Cards - Wells Fargo - US Bank Visa Buxx
  25. 25. Will my credit score go down?
  26. 26. 3 Credit Bureaus FICO Score: 700+
  27. 27. Credit Score
  28. 28. Earning Miles & Points – Credit Score - Will my score go down?- 3 credit bureaus- Credit score: credit history, types of credit, payment,utilization, inquiries- 2 to 5 points decrease per application- But available credit increase, so credit score mayincrease- Monitor your credit score (Credit Karma/Sesame)- Do what you’re comfortable with
  29. 29. Free Credit Score
  30. 30. App-O-Rama (Example) Every 3 to 4+ Months
  31. 31. App-O-Rama Planning- Different Credit Bureaus- Business + Personal- Plan for Minimum Spending- Call reconsideration to get approved- 3 to 4+ months
  32. 32. Business Cards - Don’t need an established business - Selling stuff on ebay etc. - Use SSN as Tax ID number
  33. 33. How Many Cards? Do what you’re comfortable with OR
  34. 34. Reconsideration- Not approved online- Max out available credit or too many inquiries- Call Reconsideration Department after applying - Relationship, Credit Worthiness, Business Info - Good reason for wanting card - Show that you’re not a credit risk - Hang Up and Call Again!
  35. 35. Earning Miles & Points – Retention- Retention - Citi great at offering incentive to keep card - I’m “thinking” of cancelling card - Annual Fee - Benefits
  36. 36. Earning Miles & Points – Credit CardsBest Deals (Sign-up Bonus):- 2 Citi AAdvantage cards for 50,000 miles each - Use 2-browser trick - 100,000 miles = Business Class to Europe/South America
  37. 37. Earning Miles & Points – Credit CardsBest Deals (Sign-up Bonus):- 2 Chase Southwest cards for 50,000 points each - 100,000 out of 110,000 points needed for Companion Pass-Chase United Explorer - 55,000 miles after $1,000 within 3 months + $50 credit
  38. 38. Earning Miles & Points – Credit CardsBest Deals (Sign-up Bonus & Spending):-Chase Sapphire Preferred - 40,000 sign-up bonus, 2X points on dining/travel, no forex fees, TRANSFERABLE to United, Hyatt, British Airways, Southwest etc.-Chase Freedom - 10,000 sign up bonus, but 5X points on certain categories (gas, groceries, etc.). Points transferable to hotels/airlines if you have Chase Sapphire Preferred.- Chase Ink Bold- AMEX Starwood Preferred
  39. 39. 3 Types of Credit Cards 1) Transferable Points 2) Airline/Hotel Cards 3) Cash Back
  40. 40. The Case for Transferrable Points • Flexibility, flexibility, flexibility! • Sharing points with family/friends • Transfer partners = options • Don’t forget about partners of partners • Don’t put all of your eggs in one basket
  41. 41. Types of Credit Cards -Transferable1a) Chase Ultimate Rewards
  42. 42. Chase Ultimate Rewards  1:1 transfer partners with Continental, United, British Airways, Korean, Hyatt, Marriott, Priority Club and Amtrak  You can combine points with anyone else  No fees when transferring to airlines!  You can transfer to anyone else  Points post right after statement closes  No transfer bonuses (yet)
  43. 43. Chase Ultimate Rewards Current offers: Sapphire Preferred: 40,000 after $3,000 spend within 3 months. $95 annual fee waived the first year. Ink Bold: 50,000 after $5,000 in 3 months. $95 annual fee waived the first year.
  44. 44. Types of Credit Cards - Transferable1b) American Express Starwood (SPG)
  45. 45. Types of Credit Cards - Transferable1c) American Express Membership Rewards
  46. 46. Membership Rewards Basics • Earn 1 point per dollar spent (Premier Rewards is 3x on airfare and 2x on gas & groceries) • Points go into pending status for a month after statement close (can be expedited)
  47. 47. Flexibility • Transfer to anyone! • Link (not enroll!) their account to your account membershiprewards.com -> Points Summary -> Bottom right • Advance points for free, just earn them back • Up to 60,000 for Platinum • 15,000 for most other cards (not corporate) • Buy points at 2.5 cents each, up to 500,000 a year!
  48. 48. Transfer Bonuses Recent bonus opportunities Delta: 50% and 25,000 MQMs, 40%, 30%, 20%, 10% British Airways: 50%, 40% Virgin Atlantic: 15% El Al: 25% Iberia: 20% Aeromexico: 25% Starwood: 50%
  49. 49. Current Sign-up Offers  Mercedes Benz Platinum- 50,000. $495 annual fee  Platinum- 25,000. $450 annual fee  Premier Rewards Gold- 25,000 Pts. $175 annual fee waived first year  Bumping bonuses debacle  Look out for targeted offers!
  50. 50. Types of Credit Cards – AirlinePerks : - Free bags - Priority boarding - Less miles for redemptions
  51. 51. Earning Miles & Points – Credit CardsBest Deals (Sign-up Bonus):- 2 Citi AAdvantage cards for 50,000 miles each - Use 2-browser trick - 100,000 miles = Business Class to Europe/South America
  52. 52. Types of Credit Cards –HotelCould be worth paying fee for: - Free night certificates - Elite Status - Discounted award redemptions
  53. 53. Types of Credit Cards – Cash Back- 1 to 2% on purchases- ~5% on categories- Easy to understand- Good for coach travel- $5,000 business class ticket = $250,000 spending- $80,000 spending on AMEX SPG = 100,000 AA Miles

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