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If you are serious about financial freedom, one area to explore is maximizing frequent flyer points programs as well as cash back credit cards. You can lock in upwards of $4000 to $5000 per year in air miles rewards (or just cash) without damaging your credit. But, honestly, it can be a real time sync to obsess over frequent flyer credit cards in an effort to lock in the most air miles rewards. So here is Mighty Investor's suggested tweak to the process that allows you to lock in frequent flyer miles without wasting insane amounts of time in the process.
Frequent Flyer Points - A Game That Pays You Handsomely
First, it is helpful to look at the airline miles points game as just that--a game, in which for relatively little amounts of time, you can lock in thousands of dollars in cash or flight benefits. My personal goal is to lock in about $4000 in cashback or airline points benefits per year just through sign-up bonuses and cashback on spending (details to follow). Depending on your tax bracket, that's the equivalent of making an extra $5000 per year when you factor in taxes.
Earning and Spending Airline Miles Is Freaking Fun!
Also, there is some sort of psychological phenomenon at work when you cash in frequent flyer points or hotel credits for a trip. The whole thing feels kind of…..FREEEEEEE!!!!! Which is fun. For those tempted towards the Scrooge Mindset, the points game will also get you out there in the world having more fun than you might otherwise. Another great framework is to look at the air miles rewards game as a lucrative part-time job that pays insanely well.
I have a couple of suggested tweaks when it comes to choosing the best credit card for airline miles and playing this game. First, be careful about losing yourself down the points rabbit hole and wasting a ton of time.
How to Play The Frequent Flyer Points Game Without Wasting Your Life Away.…
- Apply for three or four air miles rewards cards per year to lock in the bonus miles. If you don't know where to start and have decent credit, I suggest you consider the Chase Sapphire Preferred Credit Card, which has an amazing sign on bonus and lots of other perks. Note: you don't want to play the frequent flyer points game right before you apply for any type of loan such as a mortgage because you don't want your credit rating to drop temporarily due to applying for a card.
- Beyond locking in the massive sign-on bonuses, which in some cases can be worth a thousand dollars or more per card, Mighty Investor suggests you simply choose a solid cash back credit card. There are Chase and Cap One cards that pay 2% back on all purchases. By focusing on cashback cards more than frequent flyer credit cards, you can simply use Google Flights when you travel and book whatever is cheapest. You get to skip the entire process of obsessing over which air miles points to use for each trip.If you haven't checked out Google Flights, I suggest you go play with it right now. It's way better than Travelocity and others. Go ahead. I don't mind. I'll wait…..;) The best cashback credit cards usually come with an annual fee that is waived during the first year. However, for three years running, Capital One has reimbursed the fee for me after a quick phone call. Just call and ask.
- When you do redeem frequent flyer points, I suggest you use them for international flights whenever possible. You will usually get a much better value for your points.
- One exception to my suggestion that you save your points for international flights: if you live where Southwest Airlines flies, use their points for domestic flights. They are an insane deal--about half the points that United, American or others require for the same trips. Also, you can reserve flights with Southwest points, but then cancel up to 10 min before the flight with no charge. So you can lock flights in early but maintain flexibility.
Maximize The Return On Your Time - And Save Your Sanity!
Here's the key point of this entire blog post. Keep it simple. Don't obsess over the frequent flyer points game beyond the above unless it's a hobby you enjoy. The ROI on your time will plummet if you spend hours trying to maximize how you deploy the rewards you earn. Just lock in the air miles rewards sign-up bonuses and get 2% cash back on everything else.