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With a new year comes new opportunities to maximize your points and miles … if you’re savvy about the credit cards you carry and their benefits. TPG Special Contributor Eric Rosen shares this handy list of the New Year’s resolutions everyone should consider to maximize their credit cards and the travel rewards they can reap in 2016.
Hitting the gym more, eating healthier and being kinder may be on your list of New Year’s resolutions. You might even have a travel strategy in place for how and where you’re going to spend your money and with which brands. Now more than ever, though, staying on top of your points portfolio and maximizing your travel credit cards are imperative to a successful travel strategy and to achieving your travel goals in the coming year.
Here are six simple New Year’s resolutions to help you make the most of your loyalty in 2016.
1. Monitor Your FICO Score
Your FICO score is the probably the single most important factor in your credit card strategy, since it’s the scale that issuers use to determine whether or not you qualify for certain cards. I’m not saying to go overboard and check it every day, but you should know what your score is from month to month — and the good news is that it’s easier than ever to track.
First of all, know the factors that go into calculating your FICO score and how much each is weighted. Payment history counts for 35%; amounts owed counts for 30%; length of credit history for 15%; new credit for 10%; and types of credit for 10%.
Generally speaking, a FICO score of 720 or more is in “good” territory, but that benchmark varies from issuer to issuer, depending on your history with specific financial institutions. To research how individual credit card companies view your personal credit history, you can visit sites like creditboards.com.
If you’re going to apply for new credit cards this year, it’s imperative that you not only know your FICO score, but also track it from month to month and make sure that it stays in the range of good to excellent. To help you do so, the US Consumer Financial Protection Bureau has urged credit card issuers to provide their cardholders with free credit scores, and many of the major banks are now doing so. See TPG Contributor Richard Kerr’s post, Your FICO Score and Which Cards Offer It Free, for more info.
2. Diversify Your Points
If this past year has taught us anything, it’s that there are no guarantees when it comes to points and miles. Following in the footsteps of Delta and United, American Airlines recently announced a major overhaul of its frequent flyer program. British Airways has devalued its awards repeatedly, as has Aeroplan, and Marriott and Starwood plan to merge … and that’s just to name a few!
All these changes mean it’s more important than ever to have your points and miles spread out across a few key programs and — more importantly — accumulate your points in transferable programs like Chase Ultimate Rewards, Citi ThankYou Rewards, Starwood Preferred Guest and American Express Membership Rewards.
American Express Membership Rewards: This is the points program of American Express. You can earn these types of points with The Platinum Card from American Express, EveryDay Preferred and the Premier Rewards Gold, among others. Transfer partners include British Airways, Delta, Hilton and Starwood.
Chase Ultimate Rewards: This is the transferable points program with Chase, and you have to be a cardholder of the Sapphire Preferred or Ink Plus Business Card. The program’s transfer partners include Hyatt Gold Passport, Korean Air, Marriott and United.
Citi ThankYou Rewards: These are the points you earn with Citi cards like the ThankYou Premier, ThankYou Preferred and the Prestige. ThankYou Rewards has boosted its value in the past year with the addition of 12 new transfer partners, which now include Cathay Pacific, Hilton HHonors and Virgin America.
Starwood Preferred Guest: Though this is ostensibly the points program of a major hotel chain, SPG’s points also transfer to more than 30 airline partners (now that Aegean is a transfer partner). Earn points with the Starwood Preferred Guest Credit Card from American Express and its business version. Other partners include American, Delta, Japan Airlines, Qatar Airways and Virgin Atlantic.
3. Maximize Category Spending Bonuses
Many of the best travel credit cards out there offer cardholders the opportunity to earn multiple points per dollar on purchases at specific merchants, including both premium cards like the Citi ThankYou Premier Card and the Sapphire Preferred, as well as more entry-level options such as the Citi ThankYou Preferred and Chase Freedom (which recently announced its 2016 5x bonus categories).
Among the kinds of merchants and purchases to look out for are travel, airfare, hotel, gas, groceries, restaurants, office supplies and drugstores. The key to any successful points strategy is knowing which cards will earn you the most points at which merchants at any given time. Otherwise, you’re just leaving points (and money!) on the table. For a quick rundown of which cards are best for which purchases, check out our post, Maximizing Credit Card Bonus Categories for More Points.
You should also consider downloading the TPG To Go app to help you track your cards and purchases. It’s free, available for iPhone and Android, has features that will tell you which of your credit cards is best for a specific purchase, help you stay on top of bonuses and opportunities in your specific points and miles programs and keep you updated on the best available credit card deals and bonuses.
4. Hit Calendar-Year Spending Bonuses
Many of the top travel rewards cards offer bonus benefits and perks based on your total spending in a calendar year. These benefits range from bonus points and elite-qualifying miles to free hotel nights or airline companion passes, so it pays to stay on top of your spending and make sure you hit some of these thresholds.
Also remember that if you’re a Delta or United elite, you can get the Medallion- or Premier-Qualifying Dollar requirements for elite status waived (except for United 1K) by spending $25,000 on a co-branded credit card such as the Gold Delta SkyMiles American Express Card and the United MileagePlus Explorer Card.
Other airline cards that offer significant bonuses include the Citi AAdvantage Executive World Elite MasterCard (spend $40,000 and earn 10,000 elite-qualifying miles on American every calendar year January through December billing statement), the British Airways Visa Signature Card (spend $30,000 and earn a “Travel Together” companion ticket good for two years) and the Southwest Rapid Rewards Premier Credit Card (earn 1,500 Tier Qualifying Points for every $10,000 in purchases. Get up to 15,000 Tier Qualifying Points annually).
Hotel co-branded cards with bonus offers include the Citi Hilton HHonors Reserve Card (spend $10,000 to earn a free weekend night; spend $40,000 or more in eligible purchases each calendar year to earn Diamond status) and the Starwood Preferred Guest Credit Card / Starwood Preferred Guest Business Credit Card (spend $30,000 in a calendar year and receive complimentary SPG Gold status).
5. Maximize Perks
Many of the best travel credit cards come with valuable benefits that are worth far more than your annual fees – if you actually use them!
Though it charges a hefty $450 annual fee, The Platinum Card from American Express offers cardholders $200 in annual airline fee rebates, a $100 credit for the Global Entry application fee, Priority Pass Select club lounge membership, Amex Fine Hotels & Resorts benefits and a slew of other perks. Cardholders who maximize the value of these benefits more than make up for the annual fee.
Another great example? The Citi Prestige card. It also has a $450 annual fee, but it’s also easily offset by benefits including benefit lounge access, a Global Entry fee waiver, the fourth night free and free rounds of golf.
Other perks to look out for are waived baggage fees, reduced-mileage awards (with Citi AAdvantage cards and the personal Hawaiian Airlines World Elite MasterCard), annual free hotel nights, automatic hotel elite status (with the Marriott Rewards Premier Credit Card and the Citi Hilton HHonors Reserve Card, among others) and waived foreign transaction fees.
6. Look for Targeted Offers
Though many credit cards upped their public sign-up bonus offers last year, including the Chase Sapphire Preferred, some folks are routinely offered even higher targeted bonuses on various cards. To make sure you get the best offers out there, be sure to look through your regular mail to see what banks offer, but also consider going through portals like the CardMatch Tool to see what else might come your way.
For example, the Platinum Card from American Express carried a sign-up bonus of 40,000 points for much of 2015, but many TPG readers reported getting targeted emails and mailings offering up to 100,000 points for signing up and meeting the minimum spending requirement.
Likewise, the Premier Reward Gold card from Amex has had a sign-up bonus of just 25,000 points when you spend $2,000 in three months, but there have been other offers of up to 50,000 points as a sign-up bonus.
Beyond those sign-up bonuses, though, some credit card issuers send existing cardholders special targeted offers as an incentive to use the card more. For example, I have the AAdvantage Aviator Red card from Barclaycard (which used to be the US Airways Premier World MasterCard). At multiple points last year, Barclaycard has offered me up to triple miles per dollar spent at various merchants including gas stations, restaurants and grocery stores. The bonus is usually capped at around 2,500 bonus points, but that’s still more than I’d be earning otherwise!
Credit card issuers not only want you to sign up for new cards, but also want you to use the cards that you have, so keeping an eye out for targeted offers can net you points bonuses, discounts and more.
Keeping track of your financial health and harnessing it to take advantage of the best current credit card offers — not to mention optimizing the bonuses and other benefits offered by your cards — are great ways to keep your points balances high. It’s no coincidence that these are also the best ways to reap the most rewards possible from your credit cards. There’s a lot to keep in mind, but using these strategies can make all the difference in meeting your travel goals for the coming year.
What is your strategy for earning and using travel rewards this year?
Chase Sapphire Preferred® Card
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||16.24%-23.24% Variable||Introductory Annual Fee of $0 the first year, then $95||0%||Excellent Credit|