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Recently, two couples interested in traveling more asked me how they could use credit cards to maximize their miles and points earnings. As I discuss in my Step 1: Strategy page, credit card spend is only one portion of a larger travel strategy. You should not apply for a new credit card if you cannot pay it off in full every month (the monthly fees will negate any extra value that you would receive in points) or your credit score cannot withstand a hard check.
With those disclaimers, let’s look at the options. I recommend looking for credit cards that earn third party transferable points (as opposed to airline miles) because those points can often be transferred to multiple airlines or hotels. This flexibility is helpful when programs devalue their miles or do not have award availability on the dates that you’re looking for. There are three main transferable points programs: American Express Membership Rewards, Chase Ultimate Rewards, and Citi ThankYou Points. Each program has its own pros and cons. Chase Ultimate Rewards transfer partners include:
Chase Ultimate Rewards
I’ll discuss the pros and cons of each in another article, but let’s focus on Chase Ultimate Rewards for now. Chase Ultimate Rewards can be transferred at a 1:1 ratio to a number of airline programs including: British Airways, Korean Air, Singapore Airlines, Southwest, United, and Virgin Atlantic. Do not redeem the Ultimate Rewards for cash back, amazon purchases, or things like watches!!! You get a much better return per dollar when you redeem the points for airline miles. The best use of Ultimate Rewards is likely the Singapore First Class Suite, short domestic trips booked through British Airways, and international business class flights on United.
Credit Card Strategy (Chase Sapphire Preferred and Chase Freedom Unlimited)
I recommend that both individuals apply for the Chase Sapphire Preferred and list each other as authorized signors on each card. When you spend $4,000 on each card within three months of opening each account, you will receive 50,000 bonus points per card. You may need to stagger applying for the cards in order to meet this minimum spend requirement, but the couple would have at least 108,000 points after meeting the minimum spend requirements on both cards. Each person would receive 5,000 bonus points after adding an authorized signor (their significant other) who makes a purchase within three months. Now they’re at 118,000 points.
The Chase Sapphire Preferred is also valuable for its bonus categories. You receive 2 points per dollar that you spend on traveling and dining at restaurants, and 1 point per dollar on all other purchases. You also receive Travel and Purchase Protection which may compensate you for delayed or canceled flights (check the terms and conditions). Each card comes with a $95 annual fee that’s waived the first year, but there’s another strategy to reduce this fee.
After meeting the minimum spend requirements on both cards, one of the individuals (not both) will need to call Chase and ask to downgrade their Chase Sapphire Preferred card to the new Chase Freedom Unlimited. The Chase Freedom Unlimited does not have an annual fee but it earns 1.5 points per dollar spent on everything! It has one of the best earn rates in the industry. The downside is that you cannot transfer points earned on the Chase Freedom Unlimited to airlines unless if you have a premium Chase card (e.g., the Chase Sapphire Preferred or Chase Ink Plus). You’ll want to double check that your significant other is still an authorized signor on the Chase Freedom Unlimited card and this should become your main card for everyday purchases.
Once you’ve made it this far, you’ll have 1 Chase Sapphire Preferred card with an authorized signor and 1 Chase Freedom Unlimited card with an authorized signor. Only one card will have an annual fee ($95) but almost all purchases, except for travel and restaurant spend, should be made on the Chase Freedom Unlimited card. If you can pay either rent or taxes with a credit card (I can do both and the fee is less than the value of the miles), you can rack up serious miles in addition to the sign up bonuses. You have now mastered the basic travel credit card strategy for couples.
What to do with the points?
After only $8,000 worth of spend on the cards, you will have acquired 118,000 miles that can be transferred to major airline mile programs. That’s almost enough for two round-trip, economy tickets to Europe with United Airlines (or its partners) or enough for two one-way, business class tickets to Europe with either United Airlines (or its partners) or Singapore Airlines. The economy tickets are worth ~$1,000 each and the business class tickets are worth ~$3,000 each. You should book the award flights to cities that are not hubs (Santorini, Porto, Nice, etc.) because you can usually find relatively cheap airfare to hub cities in Europe (London, Paris, Frankfurt).
House of Parliament, London
Please leave a comment if you use this strategy or recommend another strategy for couples.