Like extreme couponers, who can fill grocery carts and pay next to nothing, a community of travelers has figured out how to play the loyalty-program game and become worldwide jet-setters on their frequent-flier miles. They leverage their good credit, everyday spending, time and effort for travel — often luxurious travel — that people of average incomes wouldn't dream of.
"You have to immerse yourself, but once you get into it, it's totally addictive and fun," said Brian Kelly, founder of ThePointsGuy.com, a website that advises people how to accumulate and use travel points and miles.
While travel loyalty strategies can defray costs on a wide range of travel products, such as hotel stays and car rentals, free flights are some of the most lucrative and easiest to get. Here are a few strategies for accumulating frequent-flier miles without taking paid-for flights.
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Far and away the easiest way to rack up miles is to apply for credit cards, which grant points or miles — the terms are often used interchangeably and depend on the credit card and loyalty program. Often one point equals one mile. A key is the sign-up bonus.
"Historically, 25,000 points was the sweet spot, but nowadays it's really 40,000 to 50,000 points," Kelly said.
That's usually plenty to take a round-trip domestic flight right away on bonus points alone. Some of the bonuses require you to spend a certain amount soon after receiving the card — for example, charge at least $1,000 during the first three months. It's important to understand the requirements of the card.
Ultimately, the idea is to apply for many credit cards to rack up bonuses with many different loyalty programs.
You don't need an especially high credit score to get approved for cards — a 700 FICO score, which is mediocre, will get you approved for most mileage cards, Kelly said.
"People don't realize you don't need to be a super-frequent flier to earn miles," he said. "Most miles that I earn nowadays aren't even from flights."
Some cards have annual fees that are usually waived for the first year. Often, people interested only in the bonus miles will cancel those cards before they pay their first annual fee. They can keep their bonus miles or points, Kelly said. Some people then reapply for the same card they canceled to get more bonus miles, he said.
"Some issuers allow you to apply over and over again for the same card every four to six months," Kelly said.
For specific card recommendations that suit the way you travel, go to such websites as FrugalTravelGuy.com, ThePointsGuy.com, and the hard-core message boards Flyertalk.com and Milepoint.com.
Consider this warning about credit cards, though. Some consumers get deep into debt and end up paying sky-high finance charges. These reward-card strategies are for people who pay off their credit card balances in full every month. A few debit cards also offer reward points.
Also, applying for credit cards temporarily harms your credit scores. But experts claim it's a matter of only a few points. Formulas for calculating scores are secret.
So, applying for cards is unlikely to harm your chances of being approved for an auto loan or wireless phone contract. Still, if you have a major borrowing event coming up soon, especially something as important as a home mortgage or refinancing, you might want to wait until after you've secured the loan.
Miles vs. cash back
Many personal finance experts advise consumers to use cash-back rewards cards, which typically offer 1 percent back in cash or statement credit.
There's nothing wrong with that, but travel experts say you can earn many times that reward if you're willing to take rewards in the form of travel loyalty points.
"If done right, you can get 5 or 6 cents per point, which means you could get a $7,000 business-class international flight for 120,000 miles," Kelly said. It would take tremendous spending on a typical cash-back card to earn a $7,000 reward.
The strategy for all rewards cards, whether the currency is miles, points or cash back, is to put most of your everyday spending on credit cards to reap greater rewards. The more spending you pile on a card, the greater your rewards.
More sophisticated users will use different cards for different purchases because some cards offer greater rewards on certain categories of spending — groceries or gasoline, for example.
A potential pitfall is that some people will spend more with plastic than cash because swiping a card doesn't feel as psychologically painful as parting with hard currency, consumer behavior studies have shown.
Online shopping portals
Instead of going directly to a major retailer's online site to make a purchase, you often can go through a shopping "portal" that gives you cash back or travel points. Prices and selection are the same.
You visit the portal site first and then click through to the retailer site. That minor detour, like entering a store through a different door, is another way to rack up airline miles with everyday purchases.
By entering through that different door, your reward points — typical is an amount equal to 5 percent of your total purchase — are credited to your account automatically.
"If you're going to make the purchase anyway, you might as well go through the portal," Kelly said. And if you pay with your mileage reward credit card, you get even more points or miles for the same purchase.
For example, if you were going to buy something online at Macy's, you could go to Macy's via a portal such as Chase Ultimate Rewards Shopping Mall or airline-specific ones such as MileagePlus Shopping (United Airlines) or AAdvantage eShopping Mall (American Airlines).
Whole other strategies are developed around the best ways to redeem miles and points.
"The whole myth with all these mileage programs is there's nothing available, with blackout dates, etc." Kelly said. "It's absolutely false."
Fortunately, advice sites also offer guidance on cashing in points and miles.
"It's a pretty loving community of people who are all trying to see the world," said Rick Ingersoll, a travel-points expert and founder of FrugalTravelGuy.com. "And we're willing to help one another out to accomplish that."