Breaking Down Credit Card Rewards with Brian Kelly

By Nomadic Matt | Published May 17th, 2012

Brian Kelly, The Points GuyLong time readers know I love travel credit cards because of the huge amount of points and perks they bring. (New readers now know this.) In fact, this month alone I signed up for an Amex Platinum (50,000 points) and United Airlines card (60,000 points) with more sign-ups planned next month. Points bring lots of benefits like free flights, elite status, free checked bags, and priority boarding. And, while I know a lot about this subject, there are people who spend their whole day figuring out how to maximize points. People like Brian Kelly.

Brian Kelly runs The Points Guy, a website dedicated to maximizing reward programs and credit card offers to get as much free travel and elite status as one possibly can. He knows the reward booking systems, points programs, and credit cards inside and out. Today, Brian shares his secrets.

Nomadic Matt: How did you become “The Points Guy”?
Brian Kelly: I started young. I’ve been passionate about points since I was 13 years old, when I planned a family trip to the Cayman Islands using my dad’s airline miles. By the time I was a sophomore in college, I was a US Airways elite flyer.

While working for a Wall Street bank after college, I was on the road constantly, earning tons of miles and points as well as elite status with airlines and hotels, and that allowed me to fund a great travel lifestyle in my spare time. I would take trips to Europe for the weekend using miles and points (I sat behind Madonna in British Airways first class once—that was memorable!), went on a blowout luxury to the Seychelles with my partner for just a few hundred dollars using points, and hopped all around the country.

I started blogging about news in the points world as well as my own areas of expertise, and people started reading it. Then a lot of people started reading it, and I decided to start blogging full time. That was just under a year ago, and it’s been phenomenal! Challenging and exciting and motivating all at the same time.

Over the years, how many miles have you accumulated? How many credit cards did you have to open for that to happen?
From credit cards, I’ve pulled in millions of points and miles. Literally. Last year alone, just through credit card sign-up and spending bonuses, I raked in over 600,000 points. That took me about 7 cards to do.

A lot of people are concerned that credit card “churning and burning” will hurt their credit score. What do you say to this?
I would never advise anyone with less than healthy credit to apply for multiple cards at once as “churners” often do. For one thing, you probably won’t get accepted. For another, you should first concentrate on fixing your credit so that you can then take full advantage of the lucrative credit card deals that are out there.

That said, only 10% of your credit score is based on new credit—when banks perform a credit inquiry when you apply for a new card. Otherwise, the most important factors are your payment history and the amount of money you owe, which combined amount to 65% of your credit score. So before you even think about applying for new cards, you need to make sure your credit is in order and that you have a decent score.

If your credit is good, then applying for new cards should not hurt it. Your score typically only drops a couple points for opening a new card (out of a total of 850), so the impact is minimal.

Do you cancel a lot of your cards or just keep them going forever?
I cancel some of my cards, mostly to avoid hefty annual fees for cards I am not actively using or deriving some sort benefit from. However, instead of closing the account completely, I usually try to ask the bank to either waive the annual fee or downgrade to a no-fee card so that the line of credit remains open and keeps my credit score healthy.

Brian Kelly, The Points GuyWhat makes for a good credit card offer?
The whole point of points is to find value, so if you find a credit card that will offer something of value to you, that makes it a good offer. The $450 annual fee on the Amex Platinum card seems onerous to some, but others love the $200 airline rebate you get from it, lounge access and a host of other perks including earning Membership Rewards points, whereas those looking for a lower annual fee might prefer the Amex Premier Rewards Gold card, with just a $175 annual fee where you get 3 points per dollar spent on airfare and 2 points per dollar spent on gas and groceries, but not those higher-level perks. Still others might prefer the flexibility to use their points at a fixed value, like with Capital One, to buy the airfare they want, when they want, and don’t care about flying in a premium cabin, while those who do want to fly business internationally or stay in a fancy hotel suite might want to rack up points in their airline and/or hotel program of choice by getting a co-branded card. It really depends on what you want to do with those points, and once you have a strategy in mind, go after the cards that will get you there fastest.

With so many offers out there from so many different companies, what would be your top three tips for maximizing those offers for free hotels or flights?
1. Strategize – Don’t just sign up for every card with an okay offer. If you have a particular trip or goal in mind, concentrate your efforts on the cards that will get you the most miles for the airline that’s going to get you where you need to go, and the hotel where you want to stay.

2. Don’t just concentrate on the sign-up bonuses – The best cards out there are the ones that allow for sustainable points earning through your spending habits. And, for that matter, make sure you are putting every expense possible on a points earning card so that you are maximizing your earning potential.

3. Do your homework – See what bonuses the credit cards you’re interested in have historically offered and make sure you get the best one possible.

Do you earn points any other way besides these sign up bonuses?
Of course. I travel a lot so I earn miles the good old-fashioned way of sitting in an airplane and going somewhere. In terms of credit cards, the best ones aren’t necessarily just the ones with the biggest bonuses. In my opinion, the best points-earning cards are the ones that allow you to sustain your lucrative points earning through category spending bonuses. For instance, while the current Chase Sapphire Preferred bonus offer is down to 40,000 Ultimate Rewards points from its high of 50,000, I still think it’s a great card because you get double points on travel and dining spending (basically all I do), and those categories are fairly broad so you can earn a ton of points. You could then combine those points with the Ultimate Rewards points you earn with the Chase Freedom card’s quarterly spending bonus categories where you earn 5 points per dollar spent on things like groceries, office supplies, gas stations, or specific merchants like Amazon. Suddenly you’re looking at a ton of extra points. Those are the kinds of cards worth holding onto even after you’ve redeemed your sign-up bonus.

How many miles a year do you fly? Is it all on points?
Last year, I flew about 150,000 miles, and though some of those trips were using miles (like one from the US to Mauritius in the Indian Ocean via Paris), and I recently traveled to Asia for 3 weeks using United and British Airways miles, I do pay for many of my tickets. After all, you’ve got to earn some of those miles and elite status flying.

Explain for a minute why you think these credit card offers are so good? Is it just the points you get or do you get additional benefits like elite status?
It all depends on what you’re looking for. If you want the flexibility of transferable points that you can use on a variety of airlines or hotels, then American Express Membership Rewards and Chase Ultimate Rewards would be programs for you to look into, whereas if you want to be able to buy any ticket any time and don’t care about flying coach, maybe a fixed-value point system like Capital One Venture Rewards is the way to go. If you are going to be flying a particular airline a lot, maybe the co-branded card is what you should look at, such as Delta’s SkyMiles Amex, which gets you elite-status perks like free checked bags for up to 9 people on your reservation (a huge value), discounted SkyClub passes and 20% off in-flight food and entertainment as well as other positives such as 2 miles per dollar spent on Delta; or the newly introduced United Club Card, which confers not only membership into the United Club at airports, but also perks like 2 free checked bags for the cardholder and a companion, priority access and elite status with both Hyatt and Avis. That’s a lot of value.

What is your favorite travel credit card?
I mentioned it earlier, but I love the Chase Sapphire Preferred card. It’s probably my favorite card at the moment. The Ultimate Rewards points I earn using it can be transferred to a variety of partners including United, British Airways, Korean Air and Southwest, hotels including Hyatt, Priority Club (Intercontinental), Marriott and Ritz-Carlton, as well as Amtrak, so I can use them for pretty much anything. Plus, I get 2 points per dollar I spend on dining and travel, which includes a lot of categories like taxis and even parking. I recently transferred the points I got for signing up to United and used them to fly business class from Newark to Singapore on Singapore Airlines for 60,000 miles and $2.50 USD in taxes/fees. That was a great redemption. Also, it’s made of metal so it feels good and it looks cool in my wallet.

For more great tips on how to use airline credit cards and (legally) milk the points system for free travel, make sure you read Brian’s blog. You can also follow him on Twitter.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program via the links on this page.

comments 25 Comments

Timely post. Just yesterday we did an analysis of which reward card is best to use – miles versus cash back. Grabbing the sign-up bonus is a huge perk, but after that, it’s good to know which card pays you the most too.

The Points Guy is a great resource for learning about credit card offers – I’ve been visiting his site for the last year or so. Mommypoints.com, viewfromthewing.com, and frugaltravelguy.com are three of my other favorite points and miles blogs. Between the four of these sites, they seem to cover most all of the news and deals available to frequent fliers.

Wow, this is gold. When I get back to Canada I need to get into collecting cc rewards.

I have two different cards that I use – the Delta American Express Platinum and the Capital One Venture Card.

I used to love Delta and liked their partnership with Continental. Now, they are no longer partners with Continental but I still have a decent amount of miles with them. The fee for this card is $135 a year. However, you also get a free companion airline ticket every year. No matter where you go these days, you get your money’s worth right there. Also, free checked bags is huge as well.

As for Capital One, I like double points on everything. I use that one a lot as well. I haven’t booked any travel on it yet but I have enough miles for a flight to just about anywhere. With that one, keep an eye out for the sign up bonuses. These can be pretty good.

And while I am not promoting this for myself in any way, I like UsingMiles.com. This allows you to track your points for nearly every airline, hotel, credit card, shopping, and every other place you can accumulate points. Now you can see everything in one place. Handy tool for tracking miles and points if you have these credit cards or are a member of hotel and airline programs.

Great information on points and miles. Thanks Matt and Brian!

Nice post. Now take this information, couple it with some no foreign transaction fee credit cards, and no international ATM fee cards and you’re set (most frequent travelers probably already have this dialed). The one thing I don’t think was mentioned about Capital One credit cards is that, I believe they all do not charge a foreign transaction fee (which is an added bonus). My favorite no fee ATM card Charles Schwab, I believe Capital One bank offers one as well.

Two great sites coming together…great stuff…

You inspired me to go check my credit score for the first time in a few years. Hugely thrilled that it’s still excellent; I was paranoid it dropped somehow.

I signed up for the British Airways Mastercard and got 100,000 miles last spring — I’ve since learned that BA miles are great for flying within Europe (only 7,000 miles and $20 each way, sometimes only 4,500 miles each way!!), but the fees are very expensive for flying any further. It’s a great card to get if you’re based in Europe, particularly the UK, but not for people based elsewhere.

Off to devour Brian’s blog cause this gal wants to go somewhere WARM this winter!

What do we think of the Venture card? It’s double points on everything, which is why I’ve prioritized it over the Chase card. Anyone used both?

I get so overwhelmed by all the ways you can get points! That said, I think one of the smartest things my husband and I did to prep for our upcoming RTW trip was to sign up for the Chase Sapphire Preferred card several months ago. We quickly earned the 50,000 bonus points, plus several thousand more. We recently cashed them in on the Ultimate Rewards site, and bought two one-way tickets from Austin,TX to L.A. and then from L.A. to Tokyo for just $550 (which we earned triple points on). We figure if we use this card for all our major purchases during our year away, we might just have enough points built up to pay for our flights home!

The key is to try and spend other people’s money to rack up the points. For example, why not pay for a work function and have the points reimbursed? There are heap of ways to earn quickly! It’s a matter of using double dipping and multiple strategies. Work the System!

Great post Matt. I’m all about credit card rewards these days. I kind of feel like I need to recoup something from the credit card companies I paid so much interest too in the past.

Great posting!! I had never thought of it and I use to avoid using the cards. After reading this i should definitely consider using cards.

Thanks

Nice Post and best information to avail free stuff by using cards.

Great advice. We recently used our air miles for a free flight to the north of Chile. Once you´ve travelled for free you ALWAYS try and save those km´s and points :)

Great post- will have to check out his website. I just signed up for a bunch of cards myself for our upcoming trip in September but my go to cards are capital one venture and chase sapphire preferred and I’m glad to see he agrees

Sam

Hmm, I’ve just recently bought flights for 2 from Canada to Alaska and then on to New Zealand and wondering if I should have looked into signing up for a points deal…

Thanks for this post, Matt and Brian! I had the Amex JetBlue card for two years, and was able to get three free flights out of it to Seattle, Pittsburgh and New York. It was a great card when I was living in America, but as I’m now living abroad and didn’t want to pay the $40 annual fee on it anymore. I just switched to a no fee CapitalOne card. I get 10,000 miles if I spend $1000 in the first 3 months. That’s already a one-way ticket somewhere! I’m now following the steps on ThePointsGuy’s beginners guide to start earning more miles even faster. Thanks for all the great info!

Youri

Any tips or great websites for Europeans?

Rebecca

Some great advice on making sure you sign up for credit cards that offer points that will help in your travel goals, not just to sign up for everything and anything. This seems like a mistake many people make and its great to see someone point it out.

The current British Airways 100,000 Mile offer from Chase is hands down my favorite card.

I’ve been out of the country for about 3 years now. I’m using a credit card for 2% cash back on purchases… but I’d like to diversify.

My question is, how do you sign up for more credit cards while living in the Philippines? Do you know of a service that can accept received mail in the USA? Can you have your credit cards sent to foreign countries?

As always, thanks for posting this. You’re an inspiration :)

NomadicMatt

You might have to get it sent to a US address and then mailed to you. I don’t think credit card companies send their cards overseas. You’ll need a US address attached to the card.

Great posting!! I had never using the cards. But after reading this i should definitely using cards. and its really nice post and best information thanks for sharing. Keep up the good work.

Maria Idiot- Widow

My lattest hubby had an Amex/DeltaSky since 1980. I was the only one who used it, but I never trouble to have one under my name. Consequences I DO NOT HAVE CREDIT HISTORY EVEN THOUGH I WAS THE ONE WHO PAID IN FULL FOR OVER 30 YEARS!!!!!!!!!! He died ; and the CC has 300,000 miles, but I do not have Credit with AMEX; and they refused to give credit. What can I do with my 300,000 mile. I want to travel. THankx , Maria

The BA Executive Club is good – if you don’t use it for redeeming their “Avios” points for BA flights. They add on all sorts of taxes and fees making it not worth the time or effort.

However, for booking USA domestic flights on their partner, American Airlines, it is excellent. They often charge less points (a point is essentially a “mile”) than American does, and their fees are less for purchasing and cancelling flights.

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