I don’t know about you, but I’m in a mood for a little controversy. So let’s get to it, shall we?
Unlike many of my comrades, I don’t consider miles and points hobby to be a zero-sum game. I truly believe we all can come out ahead, as long as we have reasonable expectations. All except the banks, that is.
That’s why I think it’s important to dispel a few myths for those who just came across our weird universe. Here we go:
1) Miles and points hobby is dead, so don’t bother investigating it at this point.
It’s as alive as it’s ever been…for newbies. It will literally take you years to go through all the best offers before you hit a wall. And even then, not all hope is lost. Banks’ approval algorithm can be a bit of a mystery which, at times, can work to your advantage. To be fair, I’m not referring to rules like Chase 5/24 rule, which are hardcoded.
Besides, miles and points hobby can mean different things to different folks. This isn’t a “one size fits all” type deal. Some will get ten cards each year, others will only get one and hang on to it indefinitely. At the very least, you owe it to yourself to come up with the best strategy on maximizing rewards via everyday spending. I have a list of most lucrative options for regular family (IMO), and will be happy to make further recommendations if you email me at email@example.com
Are you a super conservative person who likes to take things slow? Even one new card each year will give you a quick boost when it comes to your miles and points balances (or cash back if that’s what you prefer!) It doesn’t have to be all or nothing. Yes, your credit score will go down 5 points or so with each new application. But so what?
Nobody will give you a medal for having a score of 755 instead of 750. Both fall into “excellent” category. There is no such thing as “excellent+”, so what’s the point of holding back? Caution! The main reason to avoid new inquiries is if you plan to take out a mortgage in the next few years. Otherwise, if you fail to pick at least some of the low-hanging fruit out there, you are missing out.
A quick example. My cousin-in-law follows this blog. Due to my recommendation, she signed up for Chase Sapphire Reserve when the bonus was 100K points (no longer available). She also picked up two Citi AAdvantage cards and matched to Hyatt Explorist status via a loophole earlier in the year.
As a result, she and her husband are going on a vacation to Maui next year, covered completely with miles and points. And they will even have access to club lounge via Hyatt status. Is the trip free? Well, nope. She could have redeemed UR points towards statement credit. Would they be able to pay for it without taking advantage of lucrative bonus and status match opportunities? Again, no.
Iao Needle park in Maui
2) Miles and points hobby is unethical.
It’s only unethical if you lie. I’m always amazed when people are shocked (shocked!) that someone would dare to one-up poor sweet for-profit banking institutions. Folks, if you don’t take advantage of various sign-up offers, it will simply mean more dough for the banks. Nobody will be feeding orphans or curing cancer with that money, I guarantee it.
Oh, and don’t forget that it was taxpayers’ money that has bailed out these guys during the last recession. As far as I’m concerned, I’m simply getting dividends on my investment. Of course, lying and cheating is never OK. Two wrongs don’t make a right.
3) Unless you are super intelligent, this hobby will ruin your life.
This one is a real pet peeve of mine. Who exactly gets to determine intelligence level requirements? Is there a miles and points committee comprised of old-timers that greenlights who is in and who is not? Hmm, if only there was a barrier to entry of some kind. Wait a minute, there is! It’s called credit score.
Let folks determine for themselves if this is something they want to pursue. In my experience, majority will not want to mess with miles and points hobby no matter how you dress it up. Those who do are most definitely intelligent enough.
My cousin-in-law was a valedictorian of her class. I certainly hope that she can figure out on her own that “$3,000 in 3 months minimum spending” means you have to put at least $1,000 each month on that particular credit card. Rocket science it is NOT.
Obviously, you only want to apply for credit cards if you can pay off your balances in full each month. Again, not rocket science.
4) Chase Sapphire Preferred is a terrible card and any blogger who recommends it is not to be trusted.
Which part is bad? The sign-up bonus? How exactly is getting free $550 (at the minimum) a bad deal for anyone? When you hear this statement, there are usually two issues at hand. First, people mean that renewing CSP is not the right fit for every single person. This is 100% true. You should be ruthless when it comes to annual fees. I know I am.
Second issue is the fact that many bloggers (including yours truly) make commission on approvals of CSP. The dark underbelly of affiliate marketing is something I’ve discussed ad nauseam and don’t feel like rehashing it. But let me admit here that yes, I like to get modest compensation for my work and not have to cover blogging expenses from my own savings account. Guilty as charged.
To be clear, I wouldn’t trust anyone who pushed CSP over CSR (Chase Sapphire Reserve) back when the latter offered 100k points. That said, things have changed. The bonus on CSR is now 50k points and travel credit is based on cardholder year.
So, I would say that right now CSP is a better first Chase card choice for most (though not all) people. Yes, many of us make commission for recommending it. But so what? Does it make the bonus any less lucrative? Not really. It either is a good deal or it is not. You can not have it both ways.
5) Using miles on business (or economy) class is wasteful 100% of the time.
Talk to my husband (who is 6 feet 4 inches tall and weighs 250 pounds) and ask him if business class is a waste. Yes, as Nancy pointed out, regular folks need to be mindful of opportunity cost and all the negative hobby changes. Plus, domestic first-class pretty much stinks on traditional carriers (American, I’m looking at you!)
On the other end of the spectrum are experts who say you should always pay cash for economy flights and save miles for fancy redemptions. I can’t count the number of times I’ve read that you shouldn’t burn miles unless you get at least 2 CPM (cents per mile) return. Nope! I’m in this hobby to travel on the cheap, not conform to someone else’s idea of an optimal redemption.
But if you really like to fly upfront, go for it and don’t feel guilty. The only time you waste miles is when you let them expire. Otherwise, burn them however you wish. As long as they get you out of the house and closer to exploring new places, that’s a good thing. Travel is what this hobby is all about. Or at least it should be.
Readers, share your own pet peeves!
Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.