On Sale Now! Why Does The Stock Market Go Up? by Brian Feroldi

ChooseFI Logo

The Ultimate Guide to Credit Card Travel Rewards Part 3

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.

If you’re just now joining us, we are diving into part 3 of our 6 part Travel Rewards series. In part 1 we laid out the basics of travel rewards, when to apply for travel reward credit cards, and the basics of travel reward gains.

Part 2 tackled the different travel rewards strategies, the best credit cards for travel rewards, and the importance of flexibility.

Now, in part 3 we’re going to dive deeper into the nuts and bolts of applying for cards, applying for business cards (where applicable), and – most importantly – how to maximize your return on travel rewards.

Completing The Application

As you complete your application, remember that you always need to be 100% honest and truthful.

Remember the guidelines that each card issuer has:

  • Chase: 5/24 (no more than five new personal cards in 24 months) and 2/30 (no more than two personal or one business card) in 30 days. Also, space out the applications with Chase by three to four months each.
  • Amex: You usually only get one welcome bonus on each Amex card, so wait for promotional offers with increased welcome bonuses. However, there are occasional exceptions. To be sure, start the application process, and the Amex app will usually let you know if you are eligible for another bonus.
  • Citibank: No more than one application every nine days, and no bonus earned for a Citi brand of cards 24 months after the account is opened or closed.
  • Capital One: Only two personal cards total at a time and no more than one application every six months.

Do not add an authorized user at this time for personal cards, as that would add to that person’s 5/24 number.

This may create issues if you are going to be approaching this game in two-player mode. It may be possible to get an exception by speaking with an agent at the reconsideration line (see below), but you never want to count on that!

If you want to avoid making those calls in the first place, tread carefully with getting authorized users.

After filling out the applications, you will probably get instant approval on some cards and “pending” messages on the remaining ones. Don’t despair; these pending messages are perfectly normal.

Calling Reconsideration Lines

Sometimes, you may not get approved right away. Instead, you get some version of “sorry, not right now.” If you get that, call the reconsideration department for that issuer.

Here’s a handy post that describes in detail what to do if your card is declined.

Some Reconsideration Phone Numbers

Chase Credit Card Reconsideration Phone Number

  • 888-270-2127 (personal)
  • 800-453-9719 (business)

American Express Credit Card Reconsideration Phone Number

  • 877-399-3083

Citibank Credit Card Reconsideration Phone Number

  • 800-695-5171

Capital One Reconsideration Phone Number

  •  800-625-7866

Barclays Credit Card Reconsideration Phone Number

  • 866-408-4064 (credit analyst)

Ok, assuming everything has gone your way, and you’re approved, you can expect to receive your new card in the mail in the next 5-10 business days.

What To Do When You Receive The Card

You’re going to have a few things you need to do when you receive your card:

  • Activate: You’ll need to activate the card, either online or by calling an automated number.
  • Register: Create an online account with that card issuer if you haven’t already done so. If you already have an online account, make sure the new card has been added to that account.
  • Link: Connect your credit card to the checking account you’ll be using to pay off the statements.
  • Automate: Set up autopay so you never miss a payment–but make sure you have the funds in the checking account to draw from.
  • Choose: Select benefits, if any, such as with some of the premium cards from American Express.
  • Download: Download the mobile app of your card issuer.

Staying Organized (A Little Goes A Long Way)

The key to winning the travel rewards game is being organized.

There are few things more tragic than jumping through all the hoops to get approved for a card, then not getting the signup bonus because you either confused the amount of the minimum spend or messed up on the deadline.

Or, forgetting to pay off your statement in full, and getting hit with either a late fee, or significant interest expense, or both.

The ounce of prevention here is the ability to get a little organized.

You’ll Want To Know The Following Pieces Of Information About Each Card:

  1. Name of the card.
  2. Date the card was approved–this is when the countdown starts for the minimum spend to be met.
  3. How much time do you have to meet the spend? Most issuers give you three months from the approval date, but some banks may only have a two-month window. An easy way to know for sure is to send a “secure message” through your online login to get the exact date you need to hit the spending requirement.
  4. The amount of the minimum spend.
  5. The amount of the bonus.
  6. How much the annual fee is, if any.
  7. If the card has an annual fee, note the date you should be considering calling in for a retention offer.

While we recommend using a Google Sheet or Microsoft Excel for keeping track of this info, if you use a pen-and-paper approach, that’s cool too. Just make sure you have all that information stored in a place you can locate quickly.

As discussed previously, make sure you set up all your cards for auto-pay with a bank account that always has enough money to cover your spending.

Make a note in your calendar to check all your credit card accounts once every 2 to 4 weeks. You can use Todoist, Google calendar, or Microsoft Outlook, among others.

You want to verify that your card is paid off and that your cumulative spending is on track.

Passwords

You’re going to want to avoid having the same password for all your credit card accounts. In fact, when you set up your travel rewards accounts with the airlines and hotels, you should have different passwords as well.

If you are unable to keep track of all these passwords, you can:

  1. Let your browser (like Chrome) suggest strong passwords, then have it save the login details. Make sure your personal computer is protected by a login password, though.
  2. Better yet: sign up for a service like LastPass (Brad and Jonathan highly recommend LastPass!)

Key Points

There you have it; that’s the whole application and activation process. It takes a little time and organization, but it’ll be well worth it when you’re traveling for almost free with your family.

Just because you’ve applied for your first card doesn’t mean you’re done. We’ve still got quite a bit to cover. The next section will be all about business credit cards, which are vital to the travel rewards world.

Why Business Credit Cards Are So Valuable

They Are Not Included In Chase’s 5/24 Rule

In the world of Chase’s 5/24 rule, most business credit cards are not included in your 5/24 number. There are exceptions: The business cards from Capital One and a few others do show up, so stay away from these until you have all the Chase cards you can get within 5/24.

They Offer Incredible Signup Bonuses

Often, business credit cards have the best signup bonuses and also good category bonuses.

A popular one is the Ink Business Preferred Credit Card.

Business Cards Do Not Show Up In Your Credit Report

Heavy spending using business cards does not show up in your credit utilization and will not negatively impact your credit score.

This can be confusing–the actual application to the card will ding your credit score in the short term because of the hard credit inquiry.

But once the card is approved, any amount you spend on it is not included in your credit use, with some exceptions.

Additional Perks

Many business cards come with significant protections such as car rental collision coverage, extended warranties, and travel insurance.

Compare the best small business credit cards here

Who Can Apply For A Small Business Credit Card?

If you have a business, you can apply for a business card. Your business doesn’t have to be registered or licensed–and you don’t have to have an EIN. Side hustles totally count!

Here are some examples of common businesses, but the list is endless:

Here’s what you do not need to have to be a small business owner:

  • Significant amounts of income
  • A registered business
  • An office
  • Employees
  • You do not even need an Employer Identification Number (EIN), although that does make applications a little less tricky.

Applying For Your First Business Credit Card

Just as with your personal credit application, a business card will be approved or declined based partly on your personal credit score.

Other factors would be your personal income and annual business income to date.

And just as with your personal credit card applications, you should be candid about your business revenue to date, even if it is not yet significant.

Every new business goes through a start-up stage, and many depend on a line of credit to keep the finances organized and separated from personal accounts.

With any type of side hustle, you shouldn’t feel weird applying for a business credit card. It’s every bit as normal as applying for a personal credit card.

When applying for the first business card, many people report the business as a sole proprietorship and use their Social Security number as the tax ID number on the application.

Some use an Employer Identification Number (EIN) from the IRS instead. It’s basically a tax ID for businesses. All kinds of businesses can get one, even sole proprietorships, and it can be done in less than 10 minutes online.

You can apply for an EIN here. It’s free and only takes a few minutes.

Anecdotally, we’ve heard that if you have a business with a track record, use the EIN. If you are just starting with a new business, use your Social Security Number.

Key Points

Don’t think you can’t apply for a business credit card just because you don’t have a registered business. Most people with side-hustles can, even if you don’t make a ton of money yet.

So, whether or not you own your own store or just write a few freelance articles on weekends, a business card can go a long way in earning you travel rewards.

In the next section, we’re going to be talking about how to meet minimum spends on credit cards. Business cards have them too if you want to earn a huge signup bonus.

How Bonus Miles And Points Are Earned

An example would be, “spend $3,000 in the first three months to earn a 50,000-mile bonus.”

Most bonuses are awarded after the statement closes where you hit the spending requirement. This can be as soon as that first month!

There are even some rare instances like with the Capital One® Venture® Rewards Credit Card and Barclaycard Arrival Plus World Elite Mastercard, where they award you your bonus miles almost immediately upon reaching that spending requirement.

Remember, the idea is to only spend money that you were already going to spend in order to earn those bonuses.

With that in mind, here are some ways to meet the minimum spend of your new cards.

Consolidate Your Spending

Put all your everyday spending on the card you are working on. Gas, groceries, dining out, utilities, and so on.

Then, think about all the things you’re not using credit cards to pay for and figure out if you can use credit cards (preferably without transaction charges).

If you can use a credit card instead of cash, check, or bank transfers – do that.

Pre-Pay Your Bills

If you already have recurring payments like subscriptions or utilities set up to pay with credit cards, you should avoid messing with those.

It would be pretty painful to have to reset everything each time you get a new card.

But you can use the new card to make extra payments. That way, you transfer the spend from the credit card you have on file to the one you are trying to meet the minimum spend.

If you’re employed, see if your employer will let you pay using your own card, then reimburse you for it. If you are one of the lucky ones that get to choose and pay for your flights and lodging, congratulations!

If you run your own business or have a side hustle, use your new card to pay for business expenses.

Carrying A Gift Card Balance On Amazon

If you do a fair amount of shopping on Amazon, you might want to use your credit card to buy some Amazon gift codes for yourself to use down the road.  You can load them into your Amazon account to have as a gift card balance for future purchases.

Or, stockpile a few Amazon gift cards if a birthday, anniversary, or other celebration is coming up.

Buy Gift Cards From Grocery Stores

Since we’re discussing Amazon gift cards, you could also consider buying gift cards from grocery stores to help meet the minimum spend. The neat thing about buying most gift cards from grocery stores is that you usually earn discounts for gas too, which is extra valuable!

Some useful gift card brands include:

  1. Gas for your car, like Shell, BP, and 76.
  2. Fast food and restaurant chains that you frequent
  3. Travel gift cards, like Airbnb, Hotels.com, and various airlines.
  4. Hardware stores like Lowe’s and Home Depot if you have a remodel project scheduled for later in the year, or if you have rental real estate
  5. If you have a gadget purchase coming up, you could load up on eBay and Best Buy gift cards as well
  6. That grocery chain’s gift cards.

Less Optimal Options

Third-Party Payment Services

Use third-party payment services to pay for things you would usually write a check for, such as rent, mortgage, or tuition.

This is not the best option because there is usually a fee (~2.5%) involved, but if you need to meet spend, then know this option is out there. You’ll still get more value from the bonus points than the cost of the fee, but clearly, it’s a less optimal way to meet spend.

Pre-pay Your Estimated Taxes

Another sub-optimal option is to pre-pay your estimated federal and state taxes.

Again, there is always a transaction fee. If you go down this path, expect the fee to be between 1.96% to 1.99% from the IRS-approved service providers.

You can find out more about using your credit card to pay estimated taxes here.

Enlist A Partner

If you have a spouse or partner who has no interest in the logistics of earning free travel, see if they might be open to helping out by putting their spending on your card.

Make it super easy for them to help, though. Give them just one card to use at the beginning, and label it so they know where to use the card.

Rinse and repeat if there is another card to work on.

What’s A Category Bonus?

Great question!

Aside from the initial signup bonus, many cards also give a multiplier on points or miles earned based on the spend category.

Some of these categories include:

  1. Travel
  2. Dining
  3. Groceries
  4. Office supplies
  5. Gas
  6. Drug stores
  7. Home Improvement & Furnishings
  8. Online Shopping

The multiplier varies between 2x through 5x. Occasionally, it may go as high as 10x for specific promotions, but those are usually temporary.

Some of the cards provide the bonus category year-round, and any multiplier is applied automatically. Other cards have categories that rotate every three months, and you have to activate them ahead of time.

Category bonuses are a neat way to continue earning accelerated points and miles when you are in between new minimum spending.

Key Points

Signup bonuses are common with most credit cards these days, and luckily they don’t have to be difficult to earn.

As long as you’re only spending on purchases you were already going to make (think of everything from utilities to groceries and gas), you can easily make the minimum spend requirement.

Next section, we get into the nitty-gritty details of using your rewards to earn almost-free travel. Stay tuned!

The ChooseFI Travel Rewards Redemption Starter List

To make it on our go-to starter list, these redemptions have to meet a few criteria:

  1. The points or miles should be fairly easy to accumulate. Maybe there are big bonuses on a card or two, or perhaps many different smaller bonuses to be earned and then combined.
  2. If we’re planning at least 6-9 months out, there should be ample award availability to be discovered and booked, both on the airline’s own flights and on partner flights.
  3. These redemptions should be available on an airline’s website or mobile app and should not require you to pick up the phone to talk to an agent. This criterion is where we differ with most travel rewards experts, who see calling up airline agents as par for the course.

Are these going to be the absolute best “value” you are going to be able to squeeze out of your stash of points and miles in terms of total dollars saved over the sticker price?

No.

But we’ve found that those pursuing financial independence are more focused on maximizing the number of free trips they can take while minimizing the time spent going down various rabbit holes.

So we’ve kept those as the guiding lights of our course.

One way to get great value is to book a flight on an airline with fewer miles by going through that airline’s partner. 

One example is redeeming a flight on Delta Airlines using Virgin Atlantic miles or using Singapore Airlines Krisflyer miles to redeem flights on United. We discuss both examples later in this section.

Another way is to stack more places to visit for the same or almost the same stash of miles. This would mean adding free stopovers, for instance.

A third way is by booking luxury business or first-class flights, but this one has a caveat: you may be flying style, but since these tickets cost more points, you’ll be flying less often.

There are other ways to get great value from your points and miles, but the three above are great places to start.

We’ll kick off with some great redemptions domestically and follow up in the next section with sweet international itineraries.

Southwest Airlines Rapid Rewards

No Restrictions

The Southwest Rapid Rewards program may not have universal appeal, but it is a favorite for many people.

Unlike just about every other airline, Southwest does not restrict award space on its flights. If you find a seat that you can pay cash for, you can also book that same seat with points. The cash price will vary based on capacity and various promotions, but if you can pay cash for it, you can pay points for it. Just toggle between “$” or “Points” for your preference. No ifs, ands, or buts.

No Cancellation Fee

Another way that Southwest makes it easy to redeem flights is that there is no cancellation fee up to 10 minutes before the flight’s departure. So, book as many flights as you have points for, even if you aren’t sure if you will be flying.

If you change your mind for any reason, you can cancel the booking and get your points and fees refunded.

This means you can book first, then see if your Southwest flight is really the best redemption compared to Delta, United, American, Alaska Airlines, etc…

Even better: if the cost of your Southwest booking drops, book a new seat on the same flight to nab the savings, then cancel the original one.

Easy-To-Use Mobile App

Another bonus: it’s just as easy to make a redemption on the mobile app as it is on the website. This isn’t always the case for all programs!

Companion Pass

If you love the Southwest program, you should double down and shoot for the Companion Pass. That’ll allow you to bring someone with you for just a $5.60 airport security fee for each one-way domestic flight.

How To Stash Southwest Points:

Transfer Partner Programs:

  • Chase Ultimate Rewards
  • Marriott Bonvoy

Co-Branded cards:

  • Chase Southwest cards

Alaska Airlines Mileage Plan

Another favorite for folks is Alaska Airlines because of how generous their program is with its stopovers. You get one free stopover for every one-way flight, and one of the itinerary segments can even include a partner airline.

You can choose to stop over for as long as you want on an Alaska Airlines redemption, sometimes even on partner American Airlines too.

An Example Of A Stopover

If you live in Atlanta and want to make a trip out to Honolulu, you could throw in a stopover in Seattle for weeks, even months, for as low as 25,000 total points one-way.

That’s the same cost you would pay for Atlanta-Honolulu without the stopover.

Stopovers Get Better If You Live In One Of Alaska Airline’s Hubs

The stopover benefit becomes a super benefit if you live in one of Alaska Airlines’s hubs like Seattle, Portland (Oregon), San Francisco, and Los Angeles because now you can get really creative.

Let’s say you live in Seattle. And you’ve always wanted to go to Honolulu and Cancun. Here’s what you can do to get the biggest bang for your buck/points:

  1. Book a one-way to Honolulu on any airline for your vacation, maybe using the British Airways redemption we discuss later. This can be an award redemption or a paid flight. You can plan to stay for as long as you want, as long as there is award availability when you are ready to leave.
  2. Redeem on Alaska Airlines this itinerary: Honolulu-Seattle-Cancun, with a “stayover”  (what we call a long stopover) in Seattle, where you’re actually back home. Then, when the time comes, jet off to Cancun for your next vacation.

This is what the numbers looked like when we checked in Nov 2021: the HNL-SEA-CUN redemption can be had for as low as 22.5k points. Booked separately, HNL-SEA was 20k points, and SEA-CUN is another 15k points. That’s a total of 35k points compared to 22.5K, which means a savings of 12.5k points!

Now, figure out your next destination–maybe it’s Anchorage? If so, your return flight from Cancun may take you back to Seattle for another lengthy “stopover”, then onwards to Anchorage months later.

Again, you’re going to save a bunch of points: Cancun to Seattle is 17.5k points, while Seattle to Anchorage is 10k, for a total of 27.5k points. In contrast, Cancun-Seattle-Anchorage is available for as low as 17.5k points, which means you basically got the Seattle to Anchorage segment for free.

Rinse and repeat for your next trip.

For folks living in an Alaska Airlines hub, this is quite possibly the best way to get the biggest bang for your buck for domestic travel. It’s also a great way to get great value for international travel, but more on that later.

How To Stash Alaska Airline Miles:

Transfer Partner Programs:

  • Marriott Bonvoy

Co-Branded cards:

  • Bank of America

British Airways Executive Club

The BA Executive Club program is good for specific kinds of redemptions–non-stop flights on partner airlines within 2,000 miles, at least within the US.

If that sounds incredibly specific, well, there are reasons for that.

Non-Stop Flights

When redeeming British Airways miles (called Avios), each flight segment is treated as a separate redemption. So, if you have a redemption for Seattle to New York’s La Guardia, but the itinerary has you changing planes in Chicago, you’ll be making two redemptions that look like this: SEA-ORD, ORD-LGA.

Refer to the table on this page for Avios points needed for redemptions if you want to follow along. Note that this is not an actual redemption we want since it isn’t non-stop; we are just using it to illustrate why you want non-stop flights when using your Avios points.

Zone # (distance in miles)Economy
Off PeakPeak
Zone 1 (1-650)4,7505,250
Zone 2 (651-1,150)7,2508,250
Zone 3 (1,151-2,000)10,00012,500
Zone 4 (2,001-3,000)10,00012,500
Zone 5 (3,001-4,000)13,00020,000
Zone 6 (4,001-5,500)16,25025,000
Zone 7 (5,501-6,500)19,50030,000
Zone 8 (6,501-7,000)22,75035,000
Zone 9 (7,001+)32,50050,000

Seattle – New York City:

2,421 miles, or Zone 4, 12,500 Avios (peak)

Seattle to Chicago:

1,721 miles, or Zone 3, 12,500 Avios (peak)

Chicago to New York City:

740 miles, or Zone 2, 8,250 Avios (peak)

So instead of 12,500 Avios for a direct flight, you’re now paying 20,750, as well as two separate security fees for the same ultimate journey from Seattle to NYC.

If you redeem your Avios for international flights on British Airways metal, chances are, they fly through London, and those usually come with some exorbitant taxes and ‘fuel surcharges’ (junk fees) that effectively defeat the whole purpose of using points.

These charges are usually far more reasonable on partner flights that aren’t flying through London.

How To Stash British Airlines Avios:

Transfer Partner Programs:

  • Chase Ultimate Rewards
  • American Express Member Rewards
  • Marriott Bonvoy

Co-Branded cards:

  • Chase

Key Points

Your first trip using your travel rewards should be an easy one, so stick to domestic flights. You’ll find tons of ways to redeem domestic flights. If you can be flexible with your travel, there’s a deal to be had on nearly every airline.

In part 4, we’ll tackle how to do all of this again, but with a focus on international redemptions, since plenty of you are likely getting into this pursuit to take deluxe vacations to other countries.

Subscribe To The FI Weekly

Action, accountability, inspiration, and community. Join the movement. Get started on your Path to FI

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.
More To Explore
Table of Contents
You Might Be Interested in...
Share This Post
Share on facebook
Share on linkedin
Share on twitter
Share on email
Share on pinterest
Find The Simple Path to Financial Independence

You could cobble together your own FI plan from a whole constellation of blogs, podcasts, and YouTube videos.

Or you could let FI Pathfinder email you the content you want, in the format you prefer, to be consumed at a time of your choosing.

ChooseFI Logo

Our community helps people discover and accelerate their path to Financial Independence with the goal of earning more, spending less and enjoying the journey.