{Today’s post is comprehensive coverage of WorldWanderlusting’s Frequently Asked Questions after this post wears off, we’ll turn it into a page where you can easily reference it in the future.}
As you’re voraciously churning through the pages and posts on WorldWanderlusting, no doubt you’ve have questions surface about how you, too, can “travel the free way.” These are some of the most common questions we get, along with some good answers.
Doesn’t it hurt your credit?
This question is so popular it has its own post – a very detailed one which describes how credit works and what measures you can take to be sure that your credit score remains strong. The short answer is: It doesn’t have to. Most of your credit score consists of whether you make your payments on time and whether you keep a balance. Adding credit cards to your history can negatively affect your credit through recent inquiries – a relatively minor factor, which refreshes after two years. Canceling cards after short periods can shorten your average credit history length, another minor factor. Also keep in mind that there are three credit bureaus – not all of which are affected with each card application. Even still, we always recommend that wanderlusters hold off on credit applications if major credit-sensitive purchases are on the horizon (a mortgage, vehicle financing, etc.).
How good does my credit need to be?
From credit issuers standpoint, there’s not much difference between the 720 mark and 800+. Anything over 720 is excellent credit and won’t improve your rate approval incrementally. If I were in the 730 range, I’d be more sensitive to new applications, but anything over that seems to be sufficient for approval in most cases and also keeps a buffer to ensure you’ll always qualify for the best rate available when seeking credit.
How do Miles and Points work?
We could go on for days about this, and kind of do in this post. The important piece for you to remember is that they are like any other form of currency. They buy you free travel in varying increments. As you would expect, when there’s less demand (off-peak) your points will buy you more. They’ll also buy you more if you know and understand the programs well. That’s where we come in. The programs generally consist of airline, hotel, and bank points – the bank points being the most flexible of the three and some hybrids in there as well. In some cases you can transfer between them, but usually not.
Isn’t it dangerous to travel outside the US?
Absolutely not. There are unquestionably many places to travel that are far safer than places in most major US cities. Not knowing what areas might be unsafe is a concern, but the same goes for traveling in the U.S. The Department of State keeps up-to-date information about any travel warnings. Take a look, and keep in mind that they err on the side of extreme caution. Most places in the world are anxious to host travelers with open arms – they are a major source of revenue – one they protect.
Don’t the miles expire?
Some programs, like Delta, have made points non-perishable (but that doesn’t stop them from devaluing them over time through “inflation.”) More often than not, programs have an “activity qualifier” which means that you have to have some form of activity periodically (maybe every 2 years) in order to maintain them. You can have activity by something as simple as booking a hotel, then canceling it, buying a magazine subscription with your miles, or making a small transfer. Even so, you didn’t get these points to let them sit there. Use them and then get out and find some more! There’s a world to see out there.
If it’s this good, why doesn’t everyone do it?
This is the question we keep asking ourselves! After having countless conversations with people over the years, I’m convinced that many people think they are already taking advantage of credit card travel bonuses because they have a card or two. What we’re suggesting is something much more intense than that. It’s a way of life. It’s about opening a portal to the world by something as simple as redirecting everyday purchases from debit cards, checks, and cash, to credit cards that are paid off immediately.
We came into this magical world and opted to create a blog to share it with everyone we could get it to. At some point, I suppose we could overwhelm the system, but until that day we’ll be sharing the word as far and as wide as we can get it. Please feel free to pass it along to everyone who you think might listen.
How do I start?
First off, you need to know that for WorldWanderlusters, credit cards are not borrowing instruments. If you can’t restrain yourself from making purchases you wouldn’t otherwise make, you’re not cut out for this. You must know that every payment must be early or at least on time. Never, never pay interest. You lose when you pay interest. Once you know you’ll be responsible and your credit is in good condition (you can track your virtual score at CreditSesame.com), find a card you like and apply.
Some people start with a destination or two in mind, and that’s great, but we’ve always advocated a “shoot first and ask questions later” approach. A wallet full of points and miles readies you for whatever opportunities come your way. If there’s a hotel chain or airline you’re already familiar with, or have points with, start there because it’s something you already know. Look at our Free Travel Credit Card page and see which ones are our favorites at the moment.
Where should I go?
And it begins. You literally have the whole world at your fingertips. Sheldon and I have traveled to 5 of the 7 continents on frequent flyer miles, and you can too. Have you read a book about some place that piqued your interest? Do you have ancestry you could discover? Any friends that live overseas? Do you want adventure, history, or relaxation? Ask yourself these questions and start plotting your attack on the world. Our hope is to constantly feed you ideas. You can start with our Loops page and subscribe to our 3-times-a-week posts.
How many cards should I apply for at once?
For two years I applied 1 or 2 cards at a time. More recently I’ve lumped applications into groups of 5 we call an “app-o-rama.” The most important thing is that you never put yourself in a situation where you “have to spend” more money than you’d otherwise be spending in order to meet the minimum spending requirements in time. As a general rule, we spend about $1000 a month in credit-cardable expenses, so I usually don’t want to be obligated to spend any more than that. Also, Chase, which is one of the major issuers of great travel cards, will only approve you for one card every 30 days, so you can’t stack two Chase applications at once (unless you’re applying separately for your spouse).
What expenses can I put on a credit card (without an added fee)?
We have a post for this, too. The shorter answer is that the major ones are: groceries, fuel, utilities, entertainment, and medical expenses. Most major expenses, like your mortgage, vehicle payment, taxes, and others are not “credit-cardable.” Add up your monthly budget items and determine roughly how much you could spend on a credit card each month.
How many travel reward cards are out there?
Dozens, and they are constantly changing. In three years, I’ve applied for a number of cards which no longer exist, and new ones have come out each year.
Can I apply for the same card more than once?
Some issuers will approve you in “churning” the same card. Citi, for example, has in the past approved people for the same card so long as it’s been at least 18 months since the original application. Chase, however, is a stickler on this and will not issue a bonus any more than once. Also, keep in mind that there are often many different versions of cards that will allow you even further depth in acquiring bonuses.
Can my spouse apply separately?
Yes, and they should. I do not like the idea of sharing bonuses. If you add your spouse to an account, it will likely go down as a credit inquiry. Don’t add them, apply for a separate account and collect the bonus. Most card applications ask for household income.
Can I get a business card?
There are conflicting reports out there, but in many cases you can get a business credit card for a sole-proprietorship or a business you intend to start. They’ll obviously expect to know how much you think your business will bring in and other pertinent details. Also, the spending limit will likely be lower. You don’t necessarily need a tax-id number, though it helps. Read the fine print and if you feel comfortable, go for it.
How do you manage all of your points?
There are some tools which are effective, though not comprehensive. Our favorite is www.awardwallet.com , though it can’t track all accounts in realtime. It’s a great start and you can use it as a basis to get started. I also keep a google docs spreadsheet that I can update from anywhere. All of my logins are with the same user id, email, and password. It makes it very simple to login and check in on rising balances. I’m a little bit Scrooge McDuck with my points. I count them greedily. And I love, love, love playing with them to see what they can do for me.
How do you manage all of the accounts?
I also have a Google Docs Spreadsheet that I keep the cards, bonuses, application dates, min spend requirements, renewal dates, and other details in. It’s really handy and reminds me when I have a card I may need to cancel. I also set reminders on my Google Calendar.
Most effective, though, is the brilliant online accounting genius of mint.com. I can login to one database of all of my checking, savings, investment, retirement, and credit accounts. I can see that with my wife, we’ve had 23 open lines of credit, of which 11 are still open and 10 have zero balances. If the updating has problems, it alerts me so that I know the information is current. This tool is integral to the prudent management of all the accounts.
When do you cancel a card?
I always try to cancel a card before I’m up for any kind of annual fee in the coming month. I say “try” because I don’t always succeed. Often the CSR offers a bonus I can’t refuse (one that more than justifies paying the fee), or offers to waive the fee. When that happens, I leave it open. Many cards now have automatic renewal bonuses – like Club Carlson’s 40k points on anniversary. I like to stay in Category 2 hotels, so that’s like almost 3 free nights a year for me. I’ll gladly fork over $75 for that.
When speaking with customer service, I am always extremely polite and ask for their help. You empower them when you ask kindly and they’ll often do whatever is within their power.
If I cancel a card, do I lose my points?
Bank points are bad when it comes to this. In the American Express Membership Rewards and Chase Ultimate Rewards programs, you will lose the points if you cancel the card before transferring them to another program or using them. Chase will also let you pool points through transfers between spouses and businesses.
Most hotel and airline programs have a “once they’re yours, they’re yours” type of policy. They’re buying your loyalty and any effort to claw that back would result in the exact opposite effect. If you’re ever in doubt, call and ask first.
Why do credit card companies offer such great bonuses?
Loyalty. That’s what it all comes down to. The issuers are jockeying market share and they’ll happily provide incentives to you if they feel like it’s worth it. They buy these points in volume at a fraction of their value. They make a percentage of every purchase you make, so they want you to be a committed customer. Co-branded marketing with airlines and hotels also makes it cheaper for them to do as well. It’s a big business and don’t think they’re not making money. It will help you feel better about being a credit-card polygamist.
What’s the catch?
We’re still waiting to see what the catch is. Obviously the moment you fall into the trap of using credit cards as credit, you no longer benefit from the relationship. Please, steer clear of that one. Aside from that, we can’t really say where the drawback comes in. Having been able to take my family to some amazing places at a fraction of a fraction of what it would otherwise cost, I can’t tell you there’s a hint of regret.
What’s in it for you?
We are building an army of WorldWanderlusters. More than anything, what we want is a following of adventure-hungry zealots who are going to seize the opportunities, make immortal memories, and tell their friends. We have an LLC, which we’ve set up because we do make money when you apply for cards through some of the links we have on this blog. Almost all of that revenue gets rolled into trying to get our reach broader and deeper. At some point, we hope we could earn at least a supplemental income from the advertising on the blog, but in the meantime, we’ll take followers over dollars.
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Is there something we missed? Any remaining curiosities we can satisfy for you? What’s holding you back. Don’t be shy. We love questions. Comment below and let us know what you’re thinking. We would love to help plan a trip for you. Wanderlust with us!
