earning Points with credit cards

Getting started with miles and points can be tough, but don’t get overwhelmed.

We are here to help to teach you the basics, so that you can fly in business or first class for your next trip.

The best way to earn miles and points quickly is to open up one of the credit cards we recommend that has a high bonus, hit the minimum spend, and collect the sign-up bonus. 

What are Miles and Points?

Miles and Points are a currency of an airline, hotel, or credit card program. 

Each program’s miles and points are valued differently, which is why we publish a points valuation.  One program’s points could be worth 2-3 times more than another program’s points. For example, one Hyatt points is equivalent to two Hilton points.

Points also tend to devalue over time, so it is best to use them quickly. 

There are four main types of points:

Airline Points

You can use these points to fly on that particular airline or one of their partner airlines. For example, you could use American Airlines points to fly on Qatar Airways.

Hotel Points

You generally redeem these points at hotels at one of that hotel program’s brands. For example, redeeming Hilton points at an Embassy Suites, Waldorf Astoria, or Conrad Hotels. 

You can transfer these points to airlines, but generally, the transfer ratio is poor. The one exception is Marriott that allows for 3 Marriott points to 1 airline point transfers. 

Transferable Points

These points programs give you the flexibility to transfer points to several different airline or hotel points programs. The value of these points stay fairly stable due to their flexibility. There are five major transferable points programs:

Bank Points/Miles

Several banks have credit cards that offer “miles” to trick consumers into believing that you are earning a ton of airline miles. However, you are instead earning cash-back that can be used for travel. 

A good example of this is the Discover IT Miles that earns 1.5 miles per dollar spent, but each “mile” is worth 1.5 cents, so essentially this is a 1.5% cash-back card.

These types of miles and points can be useful when you find a cheap cash flight or hotel, but don’t expect any lavish flights or hotels using these points. 

Credit Scores and Responsible Credit Use

The first rule of earning points is that you should be responsible with credit and always pay your balance in full.  Any points you earn would be negated by a high-interest rate. 

The people who fail to pay their credit cards off each month subsidize banks giving out points as sign up bonuses for people with responsible credit. 

The biggest misconception of opening credit cards to earn points is that your credit score will go down dramatically. That is not true as long as you:

  1. Pay your balance in full.
  2. Space out your applications (one application every 45 days when you start).
  3. Keep a few older credit cards open (increases the average age of credit)
  4. Close new cards after a sign-up bonus if you no longer see value in the card (increases the average age of credit)

However, opening up credit cards for points is not recommended if you have a credit score below 670, or attempting to secure a home mortgage within the next four months (banks closely review your credit report for newly opened credit accounts). 

Know the Chase 5/24 Rule​

The Chase 5/24 Rule is a very important rule you need to know before opening up any credit card. 

Chase will automatically deny you for any of their cards if you have opened 5 or more personal credit cards in the last 24 months.

You can check your 5/24 status by pulling your free credit report from annualcreditreport.com or signing up for a free Credit Karma account and looking at your card opening dates.

If you are under 5/24 (i.e. you have opened up less than 5 personal credit cards in the last 24 months), you should only open up Chase credit cards (or business cards) until you are over 5/24. If you fail to do so, you lose out on very valuable earning opportunities. 

Newbies routinely discount or disregard this rule, believing that they don’t plan to open up 3 or 4 cards in the next 24 months, but then they open up a store card for 20% back on your purchase and open another non-Chase card for a decent bonus.

A general rule is that you miss out on $600 in value if you are under 5/24 and don’t sign up for a Chase card. 

Make Sure You Hit the Minimum Spend Requirement

To get a sign-up bonus you have to spend a certain amount of money on the card is typically 3 months. For example, earn 50,000 points for spending $3,000. 

If you don’t hit the minimum spend, you just wasted a hard pull of your credit and wasted a 5/24 slot.

There are ways several ways to help you hit the minimum spend:

  • Pay Your Mortgage, Rent, Student Loans, etc. with Plastiq. Plastiq has a 2.5% fee, but when you factor in the points from the sign-up bonus and points from normal spending, its actually a good deal. 
  • Pre-Pay Your Utilities. Most utility companies charge a flat fee of $2-4 instead of a percentage, so its a great deal if you submit a payment for more than $200. 
  • Funding a Bank Account– Bank bonuses are a great way to make some extra cash, but they are also a great way to generate spending on your card. Many times banks will allow you to use your credit card to fund your initial deposit. 

Stop Using Cash or Debit Cards

You don’t earn points using Cash or Debit cards, so replace all your spending on your credit cards. This can also help you hit the minimum spend requirements for credit cards. 

Decide Your Travel Goals

Is your goal to fly in long-haul business class? Or are you trying to fly as many people as you can in economy? 

If you want to fly in economy, you should target focus on opening Chase Ultimate Rewards cards, which allow you to cash your points out at a fixed rate (the cheaper the flight, the less points) and allows you to transfer points to Hyatt for free hotel stays when you travel. I would also put some spending on a 2% or more cashback card such as the Citi Double Cash, so give you a nice piggy bank of travel money. 

If you want to travel in business or first class, I suggest you target American Express Membership Rewards cards and other airline cards after you are opened up as many Chase cards as you can. This strategy will give you the best shot at earning enough points for business or first class.

Enroll in Points Programs

If you have not already, be sure to enroll for free in each airline and hotel’s points programs. There are many other programs, but the programs below would be a good place to start.

Don't Be Afraid of High Annual Fees

Some people seem allergic to paying credit card annual fees. People see a $450 annual fee and run for the hills. 

But a $450 annual fee can be a great deal, just look at the Chase Sapphire Reserve. Your $450 annual fee gets you a super easy to use $300 travel credit, which effectively lowers the cost to $150 per year.
 
For $150 per year, you get a lot other great perks:
 
  • Unlimited Visits with Two Guests to Priority Pass Lounges and Restaurants. This perk is great even if you only fly a few times a year. For example, if you are traveling with your significant other, you can get a $56 credit to spend at one of the Priority Pass restaurants. You visit three times with one guest, and you have already paid for your annual fee. Additionally, many international lounges have showers, which are a great perk after a long day of traveling.
  • 6-Hour Trip Delay Insurance– This benefit pays you up to $500 per person if your flight is delayed overnight or more than 6 hours. For example, Chase reimbursed me $400 for a hotel room, $140 for meals, and $60 in Ubers when my fiancee and I missed our connecting flight through snowy Chicago. Airlines typically don’t pay for hotels when the delay or misconnection is due to weather, so while hundreds of people were going to sleep in the airport terminal, I was booking the Park Hyatt Chicago.
  • Primary Rental Car Insurance– This covers any damage to the rental car without having to pay any deductible. Rental companies usually charge at least $20 a day for this coverage, which you can get for free by paying for the rental using your Sapphire Reserve.
  • Trip Cancellation Insurance- My parents used this benefit to recover $3,000 in non-refundable expenses when one of them suffered an injury a few weeks prior to a big trip.
  • 3x points on Travel and Dining- Most no annual fee cards only earn 1 point per dollar. If you use the Sapphire Reserve regularly for travel and dining, you can rack up a lot more valuable points. 
  • Global Entry or TSA Pre-Check Credit- Worth at least $85. If you already have it, you can pay for a family or friend’s Global Entry.

Know Each Card Issuers' Rules

Each card issuer has a different set of rules. We have a page for each issuer’s rules, but here are the most important rules:

  • American Express– You can only receive a sign-up bonus for a specific card every “lifetime,” which works out to every 8-10 years. Thus, it is very important to only open American Express cards when they have their highest offers.
    • You can only have 5 Amex credit cards at once, but Charge cards don’t count towards this limit (Platinum, Gold, and Green).
  • Bank of America– Bank of America does not like applicants that opened up a lot of cards in the last 24 months, so if you don’t have a strong banking relationship with Bank of America, target these cards after Chase.
    • Bank of America will only approve 2 cards every 2 months, 3 cards every 12 months, and 4 cards every 24 months.
  • Barclays– Barclays is sensitive to credit inquiries, so it is best to open up Barclays and Bank of America cards after Chase cards.
  • Capital One–  Capital One typically only approves one card every 6 months. Capital One also pulls all three credit reports.
  • Chase– The Chase 5/24 rule detailed above. You will be auto-denied for any Chase card if you opened 5 or more personal cards in the last 24 months.
  • Citi– You can only apply for one Citi card every 8 days and two cards every 65 days. Citi also restricts you to a sign up bonus on each of their American Airlines cards to every 48 months, or a bonus on any of their ThankYou points cards every 24 months.
  • US Bank– Generally requires you to have a banking relationship with them before they approve you for any of their credit cards.

Target Transferable Points Cards

The five transferrable points programs are American Express Membership Rewards, Chase Ultimate Rewards, Citi Thank You Points, Marriott Bonvoy, and Capital One. 

Transferrable points are ideal because it gives you a lot of flexibility to transfer to several different points programs based on where you are flying and what award space is available. 

Transferrable points also help protect you from a devaluation of a specific points program. For example, if you have Membership Rewards and Ultimate Rewards, and British Airways devalues their points program dramatically, you still have the flexibility to transfer points to other programs. But if you had all your points with British Airways, the value of your points went down dramatically. 

These points systems give you the flexibility to transfer to multiple points programs, which also means their points value is more stable than points with a specific airline or hotel.

You May Qualify for a Business Card

Business cards are great for many reasons. First, business cards (excluding Capital One and Discover) are not counted towards your Chase 5/24 number. Second, business cards open more cards that you can earn points with. 

You don’t need to have a huge business to qualify for a business card. You can generally qualify for one as long as you have at least $1,000 in business income.

Things that count towards business income are:

  • Home/Apartment rentals even Airbnb/VRBO
  • Selling anything online or in-person (e.g., Amazon, eBay, flea market, Craigslist, etc.)
  • Independent contractor/1099 employment
  • Freelancing income
  • Side jobs (babysitting, mowing lawns, etc.)
Most likely you have some kind of business income if you think hard enough. 
 
You can also sign up for multiple business cards of the same card if you have multiple businesses.

Know Your Credit Card's Benefits

Several of the premium cards offer really amazing benefits. Be sure to detail these in your spreadsheet or write them down. You may have to activate some of the benefits such as: signing up for Global Entry, setting up your Priority Pass account (airport lounges), etc.

Earn and Burn Points

Airline and Hotel points programs are routinely devalued, sometimes without notice.  There was one situation where I was booking a trip for my parents and I was waiting for them to give me their dates. The next day, Etihad doubled the number of points required for that redemption. 

As stated above, transferable points programs are more stable, so you can generally feel safe having a large points balance with them, but after you reach 100,000+ points with an airline or hotel, you should start planning a trip using those points.

What To Do If you are Not Auto-Approved

You won’t be auto-approved for every card you apply for even if you have great credit. Sometimes the bank needs to verify some your information or make sure the application is not fraudulent.

Most banks allow you to check your application status online or by phone. 

If you get denied, you can call up their reconsideration line and ask for them to reconsider your application. Sometimes they just want to ask a few questions, but sometimes they will outright deny you (many times for a large number of hard credit inquiries)

Stay Organized

It is essential to stay organized so that you know what cards are open, what cards still need to complete the minimum spend, what cards have annual fees coming up, etc. Reddit user garettg created a great interactive Google Spreadsheet template to help you stay organized. Click here to make a copy and here’s an example of what your sheet should eventually look like.

Status Match

If you have elite status in one program, you can sometimes try to match that elite status to another program. For example, I match my Hertz President Circle Status to National to get Executive Elite status without having to earn National elite status the hard way. You can find datapoints on programs at StatusMatcher.com.

Ask For Retention Offers Before You Cancel

Generally, don’t close a card within 12 months of signing up. But before you close a card, consider asking for a retention offer.

A retention offer is what banks offer you to keep the card and justify the annual fee. For example, you could be offered:

  • A $100 to $200 statement credit for cards that have a large annual fee; or
  • 10,000 to 25,000 points; or
  • If you spend $2,000 in next three months, you can get either $200 or 20,000 points. 

I usually say “My annual fee just posted and I am thinking about canceling my ____ card. I like the card, but the annual fee is quite high. Is there a way to waive the fee or is there a retention offer available.”

If the bank says no, then consider whether the benefits justify the annual fee in light of the other cards you have. 

Know How To Use Your Points Effectively

If you thought earning points was complicated, knowing how to effectively use your points requires a lot more work. It is what separates the men from the boys.

Luckily, we publish pages on how to best use your points and you can check out our Beginner’s Guide to Using Points.

Join Cashback Portal Raukten to Earn Membership Rewards

Raukten (formerly Ebates) and American Express launched a great partnership that allows you to earn Membership Rewards points by clicking through their shopping portal. 

For example, if you were buying a Groupon, you would go to Raukten first, search Groupon, and click the link, which would send you to Groupon.com and track your purchase so you can earn 4-6 points per dollar. 

Each dollar of cash back can be converted to 100 Membership Rewards. We value Membership Rewards around 2 cents per point, so you double the value of clicking through the portal by choosing points over cashback.

You can support Deals Points by using our Referral Link, which will earn you a $10 sign-up bonus.

Bonus: My Favorite Clip For Earning Points

“I don’t spend a nickel, if I can help it, unless it somehow profits my mileage account.”

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