In
The remarkable part of their excursion: They funded most of their flights and two months' worth of hotel stays with credit card rewards. After a year and a half of diligently racking up points and miles, they had stockpiled nearly 2 million points and miles between them.
Zuvella and Cortina, who are now engaged and live in
Zuvella, 27, was recently approved for his 61st credit card--although he uses only two to three cards regularly for everyday purchases, keeps a few more open to prop up his credit score, and has cancelled the rest. The majority of his miles came from sign-up bonuses. Cortina, 27, followed a similar strategy to bulk up her stash of points and miles, and the two of them used their rewards to pay for various legs of the journey in turn. "The highest return you can get from this hobby is just to target bonuses," Zuvella says.
Even if you don't share the couple's gusto for cycling through sign-up bonuses or scouring online forums for redemption strategies, you can squeeze more value out of your plastic using some of their methods. (They blog about their trips and offer strategies at www.thefarawayguide.com.) Introducing a new rewards card or two and being more strategic about which cards you use can translate into free flights and hotel stays or hundreds of dollars in cash back each year. As long as you pay your bills on time and avoid carrying a balance, this strategy won't hurt your credit score and may even boost it.
Pick your cards
To decide whether a travel or cash-back rewards card works better for you, consider the findings of a 2016 study by personal finance site
Experts recommend rotating your spending among two to three rewards cards. Once you have figured out which type of rewards suits you best, consider adding a more-rewarding card to your wallet if you're earning only one point or mile per dollar spent. Use the free tools at www.creditcards.com to kick-start your research, or consult Kiplinger's annual picks (see The Best Rewards Credit Cards). You can probably snag a sweet promotion to jump-start your cache.
Although some lucrative rewards cards carry annual fees, they sometimes come in no-fee versions, too, albeit with weaker rewards and lower sign-up bonuses. Many waive the annual fee for the first year, so you can decide later whether you recouped enough rewards or perks to justify the fee in year two and beyond. If the answer is no, you can often downgrade your card to the no-fee version.
One caveat: Credit card issuers have tightened the rules in recent years, making it more difficult to open and close the same cards and repeatedly rake in bonuses.
If you want travel rewards
Setting a travel goal will help you strategize. Where do you want to go? Which airlines fly there, and which hotel chains have properties there? "A couple of key cards can bring a lot within reach," says
Look for a card that racks up points you can transfer to several airlines and hotels. You can also book through the program's travel portal if you find a better deal or want to use a non-partnered airline or hotel chain. For example, the Chase Sapphire Preferred ($95 annual fee, waived the first year) pays two points per dollar on travel and dining purchases that can be transferred through the Chase Ultimate Rewards program to airlines such as
Another type of travel card lets you rack up points that you can redeem for a statement credit for travel purchases after they have posted to your account, including all kinds of transportation, lodging, tours and discount travel sites (the list depends on your card issuer). For example, the Capital
Airline and hotel co-branded cards make sense mostly for diehard brand loyalists because for everyday spending, you'll usually collect a measly one point per dollar--especially when it comes to airline cards. However, these cards dangle other perks that could outweigh the annual fee. Airline cards might, say, waive your checked-bag fees, offer priority boarding and throw in some lounge passes. Hotel cards often roll in a free night each year or automatically grant you mid-tier status.
If you're new to the points-and-miles game, applying for a card with a generous sign-up bonus can ease you into the process, says
Don't spread your spending too thinly over travel rewards cards, because accumulating a smattering of points here and there is less useful than having a few large pools. Rather, allocate purchases, such as dining, to whichever card will bank the most points in that category.
For flights, you'll get the most bang for your buck by saving up for first- or business-class long-haul tickets that you normally wouldn't spring for out of pocket. If airline award charts confuse you, you can also plot your strategy using a free service such as RewardExpert.com. Blogs that constantly monitor the world of travel rewards, such as ThePointsGuy.com, can also spark ideas or help you estimate how much each credit card point is worth.
If you prefer cash back
A statement credit is decidedly less thrilling than a first-class airline seat you bought with miles. But "points are just as valuable on the cash-back side," says
Your default card for everyday purchases should net more than 1% per dollar.
Next, look for a card or two offering a higher return on categories you spend the most on. For example, the American Express Blue Cash Preferred card ($95 annual fee) returns 6% on grocery purchases and 3% on gas. Other cards, such as Chase Freedom or Discover It, yield 5% cash back on rotating categories, but you must opt in to each quarterly promotion.
Refrain from applying for a retail credit card, unless you shop frequently at that store and the ongoing rewards are strong. For example, the Amazon.com Rewards Visa returns 3% on Amazon purchases and 2% at restaurants, gas stations and drugstores (but only 1% on everything else). The Target REDcard grants you a 5% discount on each purchase.
The free Wallaby (www.walla.by) app or browser extension can tell you which of your credit cards will maximize your returns for different purchases. Familiarize yourself with how your issuer defines broad categories, such as dining, groceries and entertainment, so you won't miss out.
Requesting a statement credit or check is the simplest route to redeeming your rewards. Some issuers sell gift cards as well, and you can often get a discount of 20% or so by buying them with points, says
Comment by clicking here.
Miriam Cross is a reporter at Kiplinger's Personal Finance.