You’ve probably seen ads for cards promising free travel if you sign up. But you really like your current credit card. You pay your balance in full each month and it gives you decent rewards you’re pleased with.
But sticking with just one card for years at a time means you’re missing out on a lot of travel savings. There is no faster way to earn free travel than taking advantage of the bonus offers travel credit cards provide when you open a new account.
Banks and airlines are fighting for your business. They all want you, a responsible card user, to put your spending on their cards. To entice you they offer big introductory bonuses for signing up and spending a certain amount on your new card.
There is no rule that says you can use only one card. And you can take advantage of by applying for 1, 2, or more new cards each year to earn travel rewards faster. Then, once you’ve earned the bonuses you can go back to your favorite old card, or maybe you’ll find you like your new one much better.
Here are some tips to avoid pitfalls and maximize your travel savings:
1. Browse easy to use offers
Most of us just want to earn free trips here in the U.S. For those trips, a traditional airline credit card may not be the best deal for you. They tend to offer a limited number of flights for awards with miles.
Instead, consider cards that earn travel rewards you can use to buy tickets on any airline. They are usually branded with a bank’s name on them and work like cash. Use any airline you want – Spirit, United, Allegiant – just use your card to buy your ticket and you can use points to erase the purchase The points never expire as long as you hold the card.
For example the Barclaycard Arrival currently offers 40,000 points when you spend $1,000 within 90 days. Those 40,000 points are worth $400 you can spend on any plane ticket
The best part? You can buy your plane ticket right away, counting that as spend toward the $1,000 you need to earn the bonus, and then use your points to reimburse some or all of it.
Another deal is 40,000 points for the Chase Sapphire Preferred Card. That’s worth over $500 in travel on most airlines. You just book using Chase’s site, which shows the same flights and prices you’d see on Expedia or Travelocity.
Those deals alone get you about $1,000 in travel savings with no money out of your pocket.
Offers change constantly – the best offer 40,000 or more points for signing up. MileCards.com keeps a fresh list of travel credit card bonus offers you can apply for.
2. Try to put as much as you can on your card
Most bonus offers require you to make a certain amount of purchases on your new card in a short period of time to earn the bonus, like $1,000 within 3 months.
It’s not hard if you focus your spending on the card. You can meet the requirement with any of your usual spending, as long as it’s not a cash advance. Consider adding your spouse as an authorized user. Their spending will count toward the bonus. Or, think about signing up for online auto-pay of your cable or phone bills. Those can be made with your rewards credit card with no additional fees.
3. Set a reminder to avoid unwanted fees
The catch in all of this is many of the cards that have bonus offers carry annual fees. But most waive it for the first year automatically. So, you have a year to decide if it’s a card you want to keep without paying any fees.
Set a reminder on your smartphone for 6 months to a year from now, and then decide whether you want to keep the card you’ve applied for. You might find your new card is better than the one you loved much before.
For example, a card like the Barclaycard Arrival could earn you over $360 in travel credit a year if you spend $1,500 a month on it, well more than the $89 annual fee.
4. Watch your credit score, it can grow
Don’t be afraid to apply for 2 or more cards.
There are 5 factors that go into your credit score. Two of those, New Credit and Amounts Owed are impacted when you open new credit cards. The ‘New Credit’ portion counts for about 10% of your score. That portion will go down slightly when you apply for new cards.
However the ‘Amounts Owed’ portion counts for much more of your score – about 30%. That one can grow.
As long as you pay your new cards off each month, or just don’t use them after you’ve earned a bonus, this part of your score will improve. That’s because you have more credit in your name, but are not adding to your debt, since you’re paying off each month. So the bank will see the % of your total available credit you’re using is going down, a good thing for your score.
In addition, your Payment History, another 35% of your score, will improve with all of the on-time payments you’re making.
That will signal to the credit bureaus you are a very responsible user of credit, and make you eligible for the most lucrative offers.
If you’re scared to apply for more than one card, then you can still achieve hundreds of dollars in travel rewards a year by switching to a better travel credit card. The MileCards.com Card Finder tool helps you with that. It factors in your monthly spending, the annual fees on cards, and will do the math to tell you exactly how many points you can earn in a year and what that means in travel savings.
There are tips on exactly where you can use the points for each card, and how easy or hard the points for each card are to use, all written by people who have earned and used millions of miles for travel.