Credit Cards: The Rules

Credit Cards: The Rules

One of the first things to understand about travel hacking at the high end of the market is that everything revolves around credit cards and earning rewards from those cards. Either by signing up to new credit cards or putting your spending on the cards to earn more points. The second thing is that while many people claim ‘free’ travel I suggest taking that with a pinch of salt. Completely free travel is very difficult to achieve and if we consider taxes it may not be possible at all.

There is a lot of information to digest so I’m going to do my best to make it easy. When I use the phrase “rules”, don’t see it as precise dos and donts but rather see it as “good practise”. The rules are the constraints within which you should work in order to obtain the most benefit from the ‘game’. If you deviate from the suggested strategies then you can pay a heft price. Let’s have a gentle introduction to some rules with the following video.

Little by little you will build up a body of knowledge to let you understand how everything works, and to see that some of the claims of ‘free travel’ may be a little exaggerated. Manufactured Spending may be possible in the US, but in the UK it is seemingly impossible to find. So while Bryce (the guy in the video) supposedly manufactures $50,000 of spending every month to claim free rewards I’d say that is likely pie in the sky for Brits.

Good Practise
The rules of the credit card game are fairly simple. In the following list I outline the ‘rules’ of how the game works. What this is not: it is not a recipe to follow (I will cover that in my article on ‘the process’).

The rules:

  1. Get as many cards as possible, but understand that it takes time to build up a supply of cards.
  2. Cancel and renew card for the sign up bonuses. Can take 6 months. Otherwise phone and ask for a bonus to stay.
  3. Pay off the cards in full everytime (Direct Debit). Doing this with many cards will boost your credit rating. Massively.
  4. Put as much necessary spend through the cards. Groceries. Tax. Insurance. Energy bills.
  5. Look for bonus points / boost programs. Sometimes companies will provide a boost where the conversation ratio into airmiles is huge, or more airmiles are collected per dollar spent. E.g 5 miles per dollar. And in some cases you can get more miles in value than you can actually spend.
  6. If a referral program exists. Use it. Invite as many as possible.
  7. Redeem wisely. Try to use points when it makes sense. Sometimes the companies set up bad deals to you waste your points. Other times the deals are much cheaper than normal!
  8. Look for manufacture spending. I don’t think this is possible in the UK though.

Once you understand the rules then you understand how the ‘game’ works and from there you can start to build a process (a recipe to follow). The rules are pretty much true for everyone while processes can be generic (as a framework) but are ideally more tailored to the individual.

An additional meta-rule is: have discipline. All of your handwork will be wasted if you get tempted to buy things on credit but then get lazy about paying it off. Spending unnecessarily will also undo your hard work too.

British Airways AMEX cards
British Airways AMEX cards

In order to research this topic I read through as many articles, blogs, and forum posts as I could find. I compiled information from several different sources and attempted to distil that into this Travel Hacking. In this end section of this page article I will point you towards some of the blogs that you may want to follow.

  • One Mile At A Time — Ben Schlappig’s blog. A nice place to start but the deals are appropriate for an American market.
  • Head For Points — A UK based writer with a lot of good practical advice and current deals in the UK market.
  • Flyer Talk — Some of the content is news, but the forums are active and with many good discussions.
  • The Points Guy — Good advice that applies fairly universally regardless of where you live.