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Update: Some offers mentioned below are no longer available. View the current offers here – Barclaycard Arrival Plus World Elite Mastercard, Wyndham Rewards Visa Card, The Platinum Card® from American Express, The Hyatt Credit Card, The Amex EveryDay® Preferred Credit Card from American Express, Citi HHonors Hilton Reserve Card,Hilton Honors Surpass Card from American Express, Premier Rewards Gold Card from American Express, Citi AAdvantage Executive World Elite Mastercard, The Amex EveryDay® Credit Card from American Express, Citi ThankYou Premier Card
A new year means new opportunities to maximize your credit card spending and the points and miles it offers. Today, TPG Special Contributor Eric Rosen shares his list of the New Year’s resolutions you should make to maximize your travel rewards credit cards in 2015.
When it comes to New Year’s resolutions, most people vow to eat healthier, get more sleep, and make strides professionally. Just as important, however, is getting your financial house in order, including developing a strategy for how to optimize your credit cards and the travel rewards they earn.
Here are five simple things cardholders should think about at the beginning of the new year in order to make the most of their credit and their travel credit cards.
1. Keep track of your FICO score: Knowledge is power, and when it comes to harnessing the potential of your credit, knowing your FICO score is one of the most powerful steps you can take.
Your FICO score is what lenders and credit card companies use to determine your level of financial responsibility and risk. The higher your score, the more creditworthy you’re deemed to be.
Several factors go into deciding your FICO score, including payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and types of credit (10%).
Generally speaking, a FICO score of 720 or above is considered good, but that can vary from issuer to issuer depending on your history with a specific financial institution. To research how individual credit card companies view your personal credit history, visit sites like creditboards.com.
If you hope to apply (and be approved) for the best travel credit card offers when they come around, it’s imperative not only to know your FICO score, but also to keep track of it and make sure it remains high. Luckily, the U.S. Consumer Financial Protection Bureau has made a strong push recently to urge credit card issuers to provide free credit scores and related information to their cardholders, and the major banks have taken notice.
Barclaycard, for instance, offers free monthly FICO updates to cardholders of the Barclaycard Arrival Plus World Elite Mastercard, Barclaycard Rewards, US Airway Premier World MasterCard, Lufthansa, Frontier, Wyndham Rewards Visa and Carnival cards. Discover provides free TransUnion FICO scores with each monthly statement to cardholders of the DiscoverIt, Open Road, Motiva, Miles by Discover and Escape cards.
Apart from that, Capital One provides its cardholders with the non-FICO TransUnion Educational Score and credit report summaries as part of a free service called Credit Tracker. Citibank offers its cardholders free access to their Experian-based scores via its website, but only for 30 days. US Bank provides its cardholders with their Experian-based credit scores via the Experian website.
Finally, among the major issuers, Amex offers cardholders access to their scores from all three major credit bureaus (TransUnion, Experian and Equifax) through CreditSecure.com, though the service costs $14.99 after the first month. Hopefully more issuers will follow suit, and finding out your credit score with each monthly statement will become routine.
For more information, check out these posts:
- Credit Cards that Offer Free Credit Scores
- How to Check Your Credit – Preparing for the Credit Card Application Process
- Understanding How Your Credit Score Works
- Which Credit Report Agencies Banks Use to Pull Your Credit Report and Why it Matters
- My Credit Score Confessions and 8 Tips to Improve Your Credit
- How Can I Save My Credit Score After a Late Payment
2. 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 top-tier cards like the Amex Premier Rewards Gold and the Sapphire Preferred, as well as more basic cards like the Citi ThankYou Preferred Card or Chase Freedom cards.
While you might have some of the best travel credit cards out there, if you’re not plotting out a spending strategy each year and using your cards selectively where they earn the most bonus points, then you’re essentially leaving points (and therefore money) on the table.
For instance, if you spend a lot on gas, you should use a card like the Chase Ink Plus or American Express EveryDay Preferred, both of which earn 2x points per $1 at gas stations. See this post: Maximizing Points and Miles on Gas Purchases.
If restaurants and dining out are your thing, use the Sapphire Preferred, Hilton Surpass, or Citi ThankYou Premier Card, which earn multiple points per dollar on these purchases. For more information, see this post: How to Maximize Rewards and Discounts for Dining.
Travel is another potent (and broadly defined) bonus spending category, where cards like the Sapphire Preferred, Barclaycard Arrival, and The Business Platinum® Card from American Express OPEN shine.
By planning out a powerful, cohesive spending strategy at the beginning of the year, you can make sure your future purchases earn the most points possible. For a look at which cards earn multiple points in which categories, check out this comprehensive post on Maximizing Credit Card Bonus Categories for More Points.
But you don’t have to do all that work alone. The TPG To Go app is free and available for iPhone and Android, and has features that will let you know which of your credit cards is best for a specific purchase, will stay on top of bonuses and opportunities in your specific points and miles programs, and will keep you updated on the best current credit card deals out there.
3. 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.
Among the most significant of these bonuses are:
Citi / AAdvantage Executive World Elite Mastercard: Spend $40,000 and earn 10,000 elite qualifying miles. This card helps me maintain Executive Platinum status from year to year.
British Airways Visa Signature Card: spend $30,000 and earn a “Travel Together” companion ticket good for two years. This ticket can be used on award flights, so you can get a lot of value out of it on business and first class itineraries.
Delta Reserve® Credit Card from American Express: Spend $30,000 in a calendar year and you can earn a Miles Boost of 15,000 SkyMiles and 15,000 MQMs. Spend $60,000 in that same year and earn the same bonus again.
Platinum Delta SkyMiles Credit Card from American Express: Earn a Miles Boost of 10,000 Medallion® Qualification Miles when you reach $25,000 in eligible purchases during a calendar year. Earn an additional Miles Boost of 10,000 MQMs when you reach $50,000 in eligible purchases in the same calendar year.
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.
Virgin America Premium Visa Signature: Earn up to 15,000 status points every calendar year, and carry forward any additional status points—5,000 points per $10,000 you spend.
Citi Hilton HHonors Reserve Card: Spend $10,000 to earn a free weekend night, and spend $40,000 or more in eligible purchases each calendar year to earn Diamond status.
Hilton Honors Surpass Card from American Express: Enjoy an automatic upgrade to Honors Diamond Elite status when your total eligible spending reaches $40,000 or more during a calendar year.
Marriott Rewards Premier Credit Card: Earn 1 elite night credit for every $3,000 spent. There is no limit to the number of elite nights that you can earn.
Fairmont Visa Signature: Earn one free night every anniversary with $12,000 in annual spending.
The Hyatt Credit Card: Spend $20,000 annually to earn 2 stay / 5 night credits, and spend $40,000 annually to get an additional 3 stay / 5 night credits, so up to 5 stay / 10 night credits per year toward Diamond status.
Ritz-Carlton Rewards Credit Card: Earn Gold status every year when you spend $10,000 or more on the card. This is based on account year rather than calendar year, but if you recently applied for the 140,000-point sign-up bonus, your account and calendar years should match up pretty evenly.
Starwood Preferred Guest® Credit Card from American Express: Spend $30,000 in a calendar year and receive complimentary SPG Gold status.
4. Maximize Perks: Many of the best travel credit cards come with valuable perks that can more than pay for the sometimes hefty annual fees, but only if you use them!
Probably the best known example of this is The Platinum Card from American Express. Yes, the card carries a chart-topping annual fee of $550, but cardholders get $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. Taking advantage of all these benefits makes the annual fee pale in comparison.
Other benefits you should make sure to use include:
- Waived baggage fees. Many co-branded airline cards allow cardholders to check free bags. For example, the Gold Delta SkyMiles® Credit Card from American Express, Platinum Delta SkyMiles® Credit Card from American Express, and Delta Reserve® Credit Card from American Express cards allow offer one free checked bag on all Delta and Delta Connection flights, and the benefit applies to up to 9 people traveling on the cardmember’s reservation. If you maximized this on just one flight, you’d be saving $225 in fees!
- Reduced mileage awards. American offers Citi AAdvantage cardholders reduced-price awards that can save you 5,000-7,500 miles on round-trip award travel within the U.S. and Canada. The personal Hawaiian Airlines World Elite Mastercard from Barclaycard offers 5,000 miles off round-trip award fares from North America to Hawaii.
- Annual free hotel nights. Many hotel credit cards offer free night benefits, like the The Hyatt Credit Card (one night at a Category 1-4 property), the IHG Rewards Club Select Credit Card (one night at any IHG property in the world; check this FlyerTalk thread for the best current offer), and the Marriott Rewards Premier Credit Card (one free night at a Category 1-5 hotel). For more info, see 7 Top Hotel Credit Cards for Free Nights.
- Automatic hotel elite status. Hotel status can save you money on incidentals like WiFi, and can boost the number of points you earn on stays. Elite status is provided as a benefit on many hotel credit cards, like The Hyatt Credit Card, the IHG Rewards Club, the Marriott Rewards Premier Credit Card, the Citi Hilton Reserve and the Ritz-Carlton Rewards Credit Card.
- Waived foreign transaction fees. When traveling internationally, cards that waive foreign transaction fees can save you 1-3% of the purchase price of goods and services. This benefit comes standard on many of the best credit cards out there, including the Barclaycard Arrival Plus, the Sapphire Preferred, Ink Plus, and Citi ThankYou Premier.
5. Look for Targeted Offers: While 2014 saw many credit card bonuses go through the roof, some consumers were actually targeted with even higher offers.
For example, the Amex Platinum card carried a welcome bonus of 40,000 points for much of the year, but many TPG readers reported getting targeted emails and mailings offering up to 100,000 points for applying and meeting the minimum spending requirement.
Likewise, The Amex EveryDay® Credit Card from American Express has had a welcome bonus of just 10,000 points when you spend $1,000 in the first 3 months, but I recently received an offer boosting that bonus to 25,000 points for spending $2,000 in 3 months (no longer available).
This point goes beyond welcome bonuses. Often credit card issuers send existing cardholders special targeted offers as an incentive to use the card more. For example, I have the Citi / AAdvantage Platinum Select World Elite Mastercard, which I use from time to time. I regularly use my credit cards at restaurants and fly American frequently, so I figured it was worth putting that spend on the credit card to get $100 worth of passes—a 20% return on my spending.
Some Amex Platinum, Premier Rewards Gold and EveryDay Preferred cardholders got a targeted offer to earn 3x points per $1 on dining at U.S. restaurants through the end of the year; while the Citi Hilton HHonors Reserve card sent out targeted emails offering 2,000 bonus points when using the card to pay for a stay.
Credit card issuers not only want you to apply 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. The Points Guy Assessment: The Chase Sapphire Preferred is a great pick for the beginner and the frequent traveler. The CSP has superb travel benefits, double points on certain purchases, and a 50,000 point sign up bonus. The $95 annual fee is waived the first year so this puts it as one of the less expensive cards, while still allowing you to earn one of the most valuable point currencies.
The Points Guy Assessment:
The Chase Sapphire Preferred is a great pick for the beginner and the frequent traveler. The CSP has superb travel benefits, double points on certain purchases, and a 50,000 point sign up bonus. The $95 annual fee is waived the first year so this puts it as one of the less expensive cards, while still allowing you to earn one of the most valuable point currencies.