Earlier this year, we visited Iceland and had an incredible trip. However, it was a very expensive trip and it reshaped my travel philosophy. My new travel theory is to visit cheaper and less developed countries while we’re young. Expensive countries can wait until we’re rich. Iceland isn’t going to change much in the next 20 years. Vietnam, Argentina, and other developing countries will change a ton and the experience will be gone. I know this because Thailand changed so much over the last 20 years. It’s a different country now. In comparison, the US really hasn’t changed that much. Also, this year we did a horrible job with travel hacking* and paid for everything out of pocket. We used up our points last year for Hawaii and Cancun. Next year, we need to plan better and travel for free!
Hustling for Free Travel
Apparently, travel hacking and credit card churning are bad words in the credit card industry. It sounds like I’m encouraging you to steal something. We’ll use a positive word instead – hustling for points!
The basic idea is to use credit card reward points to pay for flights and/or hotel rooms. You can get a ton of points by signing up for a new card and meeting the minimum spending. This is A-OK if your credit is good AND you’re responsible with credit cards. If not, then put it off until you’re responsible with your finances. Don’t do this if you already have credit card debt.
Our unique spending situation
One problem with this hustle is you need to meet the minimum spending. This is my biggest problem in previous years. I don’t like having to spend a certain amount of money in a limited time window because I’d spend more than normal. You can try “manufactured spending”, but I don’t like that either. That’s buying gift cards and paying for things like the utility bills in advance. I dislike gift cards because it’s just another thing I have to carry. I already lose track of gift cards and I don’t need more of them.
Hustling for points is much easier this year, though. Retire by 40 is making more money now and we need to pay estimated taxes. Ugh! Who doesn’t hate taxes? Paying taxes sucks, but I might as well make the best of it by using a new credit card. The business is paying $3,000 every 3 months and that’s perfect to meet many signup conditions. Now, I can sign up for 2 cards per year and Mrs. RB40 can sign up for 2 more. That’s 4 per years and just about the right amount.
*Small businesses pay estimated taxes 4x per year. You just estimate how much tax you’ll owe and pay the IRS through Pay1040.com. They charge a 1.87% processing fee. This isn’t cheap, but it can be worth it with the right credit card signup bonus.
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Our effort so far
So how are we doing with points hustling this year? Here is a quick summary.
|Chase Reward Points||200,612|
|American Airline points||63,362||70,000|
That’s not bad at all. This should be enough to pay for a nice vacation next year.
Chase usually has great sign-on bonuses. Their points are really flexible so this is usually where you start. The issue is their 5/24 rule. If you open 5 credit cards within the last 24 months, then they’ll turn down your application. You’ll have to keep good record of your credit cards. Here are our Chase cards.
Chase Freedom card – This is our personal card. This card has no annual fee so it’s the perfect basic card for us. This is a good place to stash your points. Other Chase cards have an annual fee so I usually close the account after a year. I transfer the points here so I don’t lose them.
Chase Sapphire Preferred card – Mrs. RB40 signed up for this card earlier this year. We used it to pay for our HVAC and part of our Iceland trip. This card is a great travel card because it does not have a foreign transaction fee.
Chase Sapphire Reserve – I signed up for this card in 2016 and it worked out very well. They had a big signup bonus, travel credit, and other benefits. I canceled after a year because I didn’t want to pay the $450 annual fee. I used most of the points on our Cancun trip.
Chase Ink Business Unlimited card – This is my default business card. I charge all business expenses on this card. It does not have an annual fee so it’s the perfect basic business card. I can dump my Chase points here too.
Chase Ink Business Preferred credit card – This business card has a great signup bonus this year, 80,000 points. Mrs. RB40 signed up for this card in May and we used it to pay estimated tax and for our Iceland vacation.
I’ve been a bit too active over the last 24 months so Chase doesn’t like me anymore. Now, we’ll have to look further afield to find another option. There are still many good bonuses and Citi is one. This year, we’re hustling to accumulate American Airlines points. AA is good if you’re going to the Bahamas, Central, and South America. I think you can get 2 round trip tickets to those destinations for about 60,000 points.
Citi AAdvantage Platinum Select World Elite
I got this card last year and collected 50,000 bonus points. There is a $99 annual fee, but the first year is free. I converted this to a no annual fee card and kept the points.
Citi Business AAdvantage Platinum Select World Elite
This is the business version of the AAdvantage Platinum card. Mrs. RB40 just signed up for this card and we’ll use it to pay our estimated tax at the end of the month.
If you’re just starting out, you should go for the Chase Ink Business Preferred card. Then wait 3 months and apply for the Chase Sapphire Preferred card. These two cards will net you more than 130,000 points. That’s enough for 2 round trip tickets to Bangkok! You’ll have to endure the economy class, though. You’d need to hustle for more points if you want to fly business class.
OK, I’m not a pro at this, but here are some tips I learned from the last few years.
- You shouldn’t put your spouse on the same card. They can apply for their own card and get more bonus points.
- Make a spreadsheet to track your credit card. You need to see when a card is open, how much you need to spend, when the annual fee will kick in, etc…
- Keep your eyes open for big bonuses. The 80,000 points for the Chase Sapphire Preferred card is better than usual.
- Be aware of the 5/24 rule. Don’t apply for too many cards.
- Most people can apply for a business card even if they don’t have a small business. If you sell stuff on eBay or Craigslist, you’re a sole proprietor. You can use your social security number in place of the EIN (employer identification number.)
Free travel next year!
Alright, I’m sure we’ll have enough for our flights next year. We’ll probably use the American Airline points for 3 tickets to visit the Bahamas. I’ll need to do some research to see which Island to visit. We’ll save the Chase points for the next trip to Thailand. I can only plan one trip at a time. What’s your travel plan next year?
Are you hustling for credit card points? Which cards are good right now?
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Photo by Lost Co
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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