A few weeks ago, I met Brad Barrett, a CPA who blogs about travel rewards. Brad’s website, Richmond Savers, helps people who want to travel for free, but don’t know how.
Brad helps people figure out how to use credit cards to travel for free.
Q: What do you think is the biggest misconception people have about using credit cards for points/miles?
A: I think people are concerned that it is going to take up a lot of time and effort to earn the points and probably most importantly, they think it’ll be nearly impossible to actually redeem them because of all the “blackout dates.”
I try to approach this entire concept from the ‘low stress’ perspective, so I am not constantly juggling multiple cards or doing any crazy things to reach the spending requirements. We just go one card at a time and use it until we earn the large signup bonus which can often be around 50,000 points. We can usually get at least $500 – $1,000 of value out of each of these bonuses, so you can understand why this can be so lucrative!
Redeeming points doesn’t have to be that difficult either, but you have to know the rules of the game and preferably go for programs that are easy to use and have a lot of award availability.
Southwest Airlines and the major hotel chains (I focus on Starwood, Hyatt and Club Carlson) are all these low-stress options. Of the major airlines I like United the best because their search functionality is user-friendly and they have a lot of partner flights available.
Q: Why do you think people get so obsessed over cash back percentages when the returns are fairly low?
A: Because cash deposited into your bank account feels nice! There’s no denying that, right? Seriously though, the main reason is that most people have zero clue that these signup bonuses exist, just how lucrative they are, and how many you can earn over time.
We’ve all been conditioned to think that opening credit cards is “bad” and that it will “ruin” your credit score. So people plod along using the same old card getting maybe 1-2% back.
What’s bad about credit cards is credit card debt and paying interest! You should never get into this hobby if you do not pay your credit cards on time and in full every month, or if you might spend more than you otherwise would have because you’re using the card.
The real value is in these signup bonuses, which as I mentioned can be worth $500 – $1,000 very easily. So all the 2% back in the world is not going to top that one 50,000 point bonus you earned.
Now imagine the value you can get if you open a few cards a year!
Q: How often do you open cards?
A: My wife and I do this is in a much more conservative and measured manner than many people, but it works for us. I always tell people that you have to do what you are comfortable with and there is value in just about any approach.
Depending on the minimum spending requirements, we probably open 6-10 new cards per year. We just concentrate on one card at a time and once we’re done with that spending requirement we move on to the next card.
There is no stress or juggling here, and we certainly don’t worry about those tiny 2x or 3x “bonuses” they give for using at restaurants or gas stations, etc. All that stuff is tiny compared to the signup bonuses, so we focus our energy there.
Q: What is your favorite card for travel rewards?
A: I like the Chase Ultimate Rewards points and those can be earned from the Chase Sapphire Preferred, Ink Bold and Ink Plus. Since having a spouse really doubles the available ‘universe’ of cards, we were each able to open each of these 3 accounts in our names to rack up over 300,000 of these Ultimate Rewards points.
These can be transferred to 11 partners including my favorite: Southwest, Hyatt, United and British Airways (best used on American Airlines and US Airways)
Q: What card would you recommend to beginners?
A: I usually recommend the Chase Sapphire Preferred as the card to start with. It always depends on the person’s travel goals and personal situation, but I find this ideal for most people to start with.
If you don’t want to be bothered with traditional award redemptions, the Barclaycard Arrival Plus and Capital One Venture cards are great for ultra-flexible travel.
Q: What mistakes do you see people do with their cards?
A: I’ve seen many people redeem their valuable Ultimate Rewards points for gift cards, cash or the trinkets offered through their merchandise portals. These usually only get you about half the potential value you can get from transferring the points and redeeming for travel the traditional route.
Q: What surprising redemption options do you see?
A: The most surprising to me, and the one with the most potential value for many people, is using British Airways points to fly on American Airlines, US Airways and Alaska Airlines in the United States and the rest of North America/Caribbean.
I know this sounds odd, but British Airways points are terrible to fly to Europe with since they hit you with huge “fuel surcharges.” There are no surcharges on their partner flights in the US and you can take advantage of their amazing distance-based award system.
Two examples we just used recently:
1) Richmond to New York City on American Airlines. This only cost us 9,000 BA points, but if we had American miles it would have cost 25,000.
2) New York City to Bermuda on American Airlines. This cost 15,000 BA points, but would have set us back 35,000 American miles for the same flight.
Q: How easy is it to get a free flight abroad?
A: One of the things I want to stress here is that travel rewards is not a perfect system. There are many frustrations, and chief among them is award seat availability. There are times where you’ll have the points but there just aren’t flights available for the exact dates and destinations you’re looking for.
I always tell people that flexibility is going to make you succeed wildly in saving lots of money. Flexibility with dates is the biggest aspect, and destinations secondarily.
That all said, getting a free flight to let’s say Europe is extremely straightforward. I usually focus on United miles since in addition to United flights there are so many Star Alliance partner flights you can fly on with these miles.
It really is just a matter of getting 60,000 United miles for each round-trip flight to Europe and then just searching until you have an itinerary you’re happy with. If you said, I want to go to Europe next fall and I’m really flexible with the dates and where I want to fly into and out of, then you’ll have a nearly 100% chance of making this happen.
There’s also a cool thing called a “free stopover” which is allowed on an international round-trip award flight using United miles. This basically gives you a free flight in the middle of your journey.
Example: We recently searched for your honeymoon flights and you said you wanted to go to Croatia but would love to stop in London if possible. We were able to put an itinerary together after only about 5 minutes of searching that took you to London, on to Croatia and then back home all for the same 60,000 miles just flying to and from Croatia would have cost.
Q: Do you remember the last time you had to pay full-price for a flight?
A: I really don’t! The funny thing is that I haven’t traveled a ton the past few years because our daughters are really young, so we’ve been in more of a points accumulation stage, but we’ve still flown quite a bit and all that travel has been using points.
Just to point out: “free” travel is for the actual flight fare and you are still responsible for the unavoidable government taxes and fees. In the US it works out to just over $11 per round-trip flight, so nearly free!
Q: Do you have any tips for free hotel stays? Is it harder/easier to get a free hotel or free flight?
A: It is always going to be easier to get hotel stays because the availability is quite plentiful! The major chains I focus on have a policy where if they have one “standard” room available for cash then you can use your points. In many hotels that is hundreds of potential rooms per night for use with points.
So that gives you a lot of flexibility to focus on the more difficult flight awards first and then concentrate on the hotels after the fact.
I like Hyatt since you can transfer points from Chase UR, Starwood for their 5th night free and reasonable redemption rates and Club Carlson (Radisson) for their amazing last night free on an award stay when you have their credit card. This Club Carlson strategy allows you to get award nights for essentially 50% off the published points requirement.
Q: What advice would you give to someone starting out?
A: Take it slow at the beginning and make sure you can always hit the “minimum spending requirement” before opening up a card or you will not get the lucrative bonus.
Make sure you start well in advance of your proposed travel dates and try to stay flexible. It is also always a positive to have the points in your accounts so you can book award flights when you see them rather than trying to scramble to get the necessary cards and then hope the award seats are still there.
Q: How do you stay organized?
A: I have a really simple spreadsheet that I use to track my cards and my frequent flyer account logins. I find it is essential to log this info as it happens rather than try to go back months later and recreate it.
I offer a completely free travel rewards coaching service through my site and I always send new members that Excel file as well as access to my 40+ video travel rewards coaching video training.
I find that a little helping hand is needed for most people to get started with this concept, so that’s why I created my coaching service. I’ll email with you and hop on the phone for an initial discussion, so if you’re interested please do not hesitate to sign up and we’ll get you moving.