Credit Card Strategies

“Playing The Game” Pt. 1 – Travel Card Rules

I'm 'playing the game' and these are current the cards in my hand.
I'm 'playing the game' and these are current the cards in my hand.

Read any travel blog and at some point they will mention travel credit cards.

As they should! The perks from these credit cards can heavily subsidize or outright pay for some travel related expenses! But I often find that most blogs don’t often provide a strategy. They basically tell you what the card offers and sometimes provide one-off suggestions on what you can use the perks for. I’m here to tell you how to play ‘the game’, and for beginners, this post should provide some perspective on how to start!

Like any game, there are rules, and ultimately the stakes are higher when playing the credit card game – it directly impacts your financial health! However, with a little bit of planning and foresight, you can make sure you realize your travel goals without financial stress! But regardless of what you do in life, there is one universal constant:

You must budget!

This goes without saying, but in a world of ever increasing financial illiteracy, it’s a must! It does not matter whether you ‘play the game’ or not – If you do not budget, you will not travel, it is as simple as that.

Let me repeat that: If you do not budget, you will not travel!
Let me repeat that: If you do not budget, you will not travel!

Keep in mind that most travel credit cards are a ‘product’ that you ‘buy’. They cost money to use in the form of annual fees. The sign-up bonuses also have a minimum spend requirement, which brings me to my next rule:

Do not apply for the card if you can’t get the sign-up bonus!

These bonuses make ‘playing the game’ possible, but there are stipulations. It’s usually something along the lines of, “if you spend X dollars in Y months, you will get Z points/miles/dollars/certificates”. You may have to spend $3k, $4k, $5k, or more, usually within the first 3 months of owning the card to get the sign-up bonus.

Example of typical sign up bonus stipulations
Example of typical sign up bonus stipulations

There is no point to apply for the card if you cannot meet the minimum spend requirement in time. It will take significantly longer for you to accrue the same points through regular spending. By the time you get the same points/miles/cashback as the sign-up bonus through regular spend, the value of your points will likely have been eaten up by your card’s annual fees. With all the spending you did, it was probably easier and perhaps cheaper to buy your travel in cash anyway!

For those of you lucky enough to pay rent with your credit card, this rule may not apply to you. For the rest of us, you must budget! Your budget can determine whether you are able to meet the minimum spend requirement in the upcoming months, and whether applying for the credit card makes sense for you.

Pay your credit card off on time!

The point of ‘playing the game’ is to make travel cheaper. You want your trips to stay that way during and AFTER THE TRIP! If you do not pay your credit cards off on time, the trip you took 4 months ago suddenly starts getting more expensive through interest fees. Your $1000 trip may have ended up costing $1150 after all was said and done. Even a $50 interest charge is not insignificant – that may be a few days’ worth of meals in Thailand, for example!

Fortunately, this is easy to do nowadays with automatic online bill-pay. Just set an amount that is in line with your BUDGET and never miss a payment. Better yet, treat your credit card as a debit card! Budget to the point where you manually pay cards off in full when your payment is due! Then, keep that card in your nightstand or something, work on the next card!

Keep track of when your card renewal comes up!

Some cards are worth keeping for a long time. Some cards are just worth keeping for a year. You’re going to want to decide what stays in your wallet and what cards meet the guillotine. This is crucial, especially when you have cards with high annual fees!

For example, you may have four cards with $450 annual fees – that’s $1800 just to continue using the card benefits!

Take stock of the benefits of each card you have. If you have a ton of overlap, you will probably want to cancel a card or two to save that money for next year.

To close a credit card account, I usually use the online secure messaging link when I log into my account. Here’s what I do before I close a card:

  1. I use up any residual points left on the card. Wouldn’t want to throw away ‘money’!
  2. I make sure I have a zero balance on my account.
  3. I send a message with two sentences: “Please close my [insert card name here] ending in [last 4 card digits here]. Please ensure that my credit report reflects that this card was closed at the consumer’s request.”
  4. If, for some reason, I happen to have a negative balance on the account, you can also request in the same message to “Please mail a check for the current negative balance on the account in the amount of [the negative balance] to my address at [insert my home address here].”

You can keep track of when you were approved for the card IN YOUR BUDGET! Have a spreadsheet? Jot it down there.

Don’t over do it!

Your credit score may take a hit if you apply for too many credit cards, whether or not you are approved for them. In my experience, I’ve had no trouble staying under 5 new credit cards a year. If you’re applying to 10 cards a year, for example, it says to potential creditors that you’re having money issues and have less of a chance to pay your cards back.  Stay under the radar, and apply only to the cards that make the most sense for your goals!

Now that you’re acquainted with the financial strategies of ‘playing the game’, It’s time for you to start leveraging these cards to produce travel strategies!

About the author

Jonny

Jonathan "Jonny" Avila is a chubby young professional with a cat, wife, and a taste for life! Believes in 'paying it forward' by sharing the tools, tips, tricks, and lessons from his own experiences so you too can jump on the Travel Bandwagon and enjoy what this wonderful world has to offer!

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