Hey blogopals,
I know I've been a little radio silent the past year. Part of that is because I had a crazy amount of free time at weird intervals last year, so I was able to really commit to blogging, part of it is that there are so many new discount flights these days that the deals don't seem as amazing, and a big part of it is that I've found an even better way to travel long distances for cheap, but I didn't know how to say it without sounding like all those self-serving bloggers out there with a get-rich-quick scheme...but after so many people telling me I should really write a blog post about it (instead of just advising friends one by one when the need arises), and because my students moved up their lesson so I ended up having an extra hour of free time today, I figured that time is now.
The answer is credit card signup bonuses.
Now, if you're not a US resident, this is unfortunately not for you. You can stop here. Sorry :( There's only one reasonable signup bonus card in the UK as far as I could tell, and it only earns for British Airways Avios miles, which are a hassle to redeem and often have high fuel surcharges, but like if you are in the UK you should get that one card. I forget what it's called. Sue me.
(I want to mention that, when appropriate, I will be including referral links to my favorite cards. Many cards will give users $50-100 in points if someone uses their referral link and gets accepted, so by clicking my link instead of somebody else's, you would be gifting me sweet sweet points. If you know me, you know that I have zero business sense, and would never ever recommend something that I don't 100% stand behind. I will tell you the good, the bad, and the ugly with these cards, and unlike a surprisingly high number of credit card bloggers, I will also be recommending some cards that don't offer referral credit.)
As far as I can tell, credit card companies in the US really want people to go into debt. They know that if people open a credit card, they're likely to buy things they really shouldn't, and then they will go into debt and give the banks lots of sweet sweet money. (If this sounds like you, you really should not be opening credit cards. You probably know this already. Don't enable yourself.) (That said, the best rewards cards won't accept you if you don't have a high credit score and reasonably old credit history. So really, I don't know what their game is! Heckin' mystery.) So basically, in order to entice people to open a new credit card, they will offer hefty bonuses once you reach a minimum spend in your first few months of opening a new card.
Most points cards require you to spend $3,000 total in your first three months (so that's $1,000/month on average if you like averages). Once you spend $3,000 (or whatever bonus they specify in the ad), you will get some kind of financial bonus. Here are just a few bonuses I've gotten: $1,500 redeemable for any flights or hotels booked through the Chase website; $500 cash back on any travel booked with the card; $200 cash. Yes, really.
As you can see, the bonuses vary a lot depending on the card, but also depending on whether you catch a "sale;" the card that I got a $1,500 bonus for now has only a $750 bonus. There are a huge number of travel rewards cards on the market. Where do you start? You can find out for the low low price of $5.99 a month! Ha ha ha just kidding, I don't suck, here's tip #1:
Credit card churning tip #1: You want your credit history to be as old as possible. If you have never had a credit card or mortgage or car loan before, you need to get your first credit card as soon as possible. I have been rejected from credit card applications largely because my credit history is just too young--I didn't get my first credit card until a few years ago, and that's hurting me now. Essentially, as far as I can figure, banks look at my score and say "Well, sure, she's paid back her debts for a few years, but we just don't have enough data to say for sure whether she's reliable."
My first credit card was the Discover It card. It's a solid fee-free first card, with 1% cashback and rotating 5% cashback categories, and it doesn't mind that you haven't had a credit card before. You can apply here and get a $50 signup bonus if you apply and are accepted on or after January 1! This is really good because I don't think they usually have any signup bonus! There's also a similar card out now called the Citi Double Cash that gives you "double cash back" in some weird way, which I believe boils down to getting 2% cashback over all, which is pretty good, too, but I don't know if it's as easy to get accepted for that one without any credit history.
Now, I don't actually know how much credit history you need in order to be accepted for rewards cards. You can check your credit score, and what cards you're likely to be accepted for, online with Credit Karma for free. I would expect that about a year after opening your first card, you could probably get another, but who knows? Maybe 6 months is enough. Definitely don't just start applying immediately though, when you don't have much of a chance--that hurts your score. Credit card churning tip #2: Don't apply to cards that Credit Karma doesn't think you can get. It will hurt your score.
OK, you've built up some credit history. Now what? Tune in next time for more excitement/details!
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