Travel for Free - Maximize Travel Rewards with Credit Card Strategy: A Step-by-Step Guide Part 2.

Unlocking the world of (nearly) free travel through travel rewards credit cards can be overwhelming at first. However, by mastering the best travel credit card strategy and leveraging the power of airline miles rewards, you can make your trips significantly more affordable.

In this post, I'll keep walking you through a simple but powerful plan to form your credit card points strategy for travel and share the details of how our family of four maximizes our plan in hopes that we can give you a simple to follow blueprint that doesn't need to be altered too much for your specific needs.

You should now be equipped with three essential mindsets—viewing your credit cards as means that enable more travel and as "convenience" tools instead of credit cards plus committing to funneling all your payments through them. For more on this see the first part of my guide here. Now it’s time to move forward on your journey to maximize travel through the best credit card airline rewards and travel miles.

In this follow-up, as we move forward I also want to revisit a few basics and address common concerns, particularly the worry that using multiple credit cards could hurt your credit score.

Credit Score Concerns and Reassurance

For many, diving into the travel credit card game brings hesitation, largely due to fears about their credit score. It’s a common misconception that applying for multiple cards will cause lasting damage to your credit. While each credit application does cause a minor dip in your score, this effect is short-lived. As long as you continue to practice sound credit habits—paying off balances in full and on time, keeping your credit utilization low—your score will quickly recover, and in many cases, it can even improve over time.

Another way to look at it is that you’ve worked hard to build good credit, and that credit should benefit you beyond traditional uses. Not only can good credit help you with loans or mortgages, but it can also unlock a world of travel opportunities. Think of your credit as a tool that, when managed wisely, can take you further—literally—by allowing you to access lucrative travel rewards and miles to fund your next adventure. Think of it also as a way to save more money for earlier retirement instead of spending it on travel since we could be talking about tens of thousands of dollars saved annually.

Step 1: Understand Credit Score and Its Impact on Your Strategy

Before diving into the credit card travel rewards game, it’s essential to understand how your credit score plays a role.

- A score above 730 will qualify you for most best travel rewards credit cards.

- Even with a score in the low 700s, you can start earning credit card miles and points for free flights.

- Again, think of your credit score as a tool to unlock free travel, manage it wisely to reap the benefits and don't worry about the small and temporary credit score dip.

Step 2: Set a Clear Travel Goal

A vital part of your strategy is having a clear travel goal. Whether it’s a domestic trip every quarter or an annual international vacation to Europe, this will shape how you use your airline miles and credit card points.

For example, our goal is to travel overseas at least once a year and make multiple domestic (or closer, nearby international trips) totaling at least four airfare trips annually. That's not a small feat for a family of four. Your goal may differ, but keeping it in mind will help you stay focused on maximizing credit card travel points and perks.

Step 3: Be Loyal to Specific Airlines

While some suggest signing up for as many airlines as possible, we've found that focusing on a couple of airlines is the best way to maximize airline miles. This approach not only keeps things simple but also allows you to build loyalty, which means:

- Accumulating frequent flyer miles faster for free flights.

- Getting familiar with and mastering their loyalty programs and elite status benefits like priority boarding and free upgrades.

If you plan to follow our exact blueprint look at United Airlines for international travel and Southwest for domestic. United Airlines is a great choice for international travel to Europe, especially if you transfer Blue Bank (Chase) Sapphire points for a 1:1 ratio but also because they offer great options on their multiple destination flights (more on that in another post) which allow to see even more on your long, international trips.

Southwest Airlines offers excellent value for domestic trips with its Southwest Rapid Rewards program but we also love its unmatched flexibility which allows us to pivot and change thigs often literally on the fly, no pun intended. That flexibility is also a topic for another, dedicated blog post. So again, if you want to take a lot of guessing out of this game follow our plan (especially if you have a family of four) and we hope to save you alot of research and frustration with all the info that's out there. This also means that, if you haven't already you will need to sign up for Southwest's Rapid Rewards and United's Mileage Plus programs.

Step 4: The Double the Benefits Rule

One common mistake people make is adding their spouse or partner as an authorized user on their card. Instead, the smart move is to have your partner apply for the same or similar cards separately. This way, you double your sign-up bonuses and can even earn a referral bonus.

How We Maximize Points:

1. One of us applies for a card, earns the sign-up bonus, and refers the other person to the same card ( not necessarily immediately, but at some point).

2. We alternate roles with each new card, earning referral bonuses and the sign-up points from both cards.

3. This simple strategy lets us rack up double the points as opposed to if we were to go for authorized users plus extra referral points, making it easier to reach our travel goals—especially when you need points for the whole family (since your kids can’t apply for credit cards...yet!).

While I'm not a huge fan of the terms commonly referring to this particular aspect of our strategy you will find it often labeled as player 1 and player 2 approach and I guess to keep things less confusing I'll adopt this terminology as well going forward.

Step 5: Strategic Credit Card Applications

The key to building a solid foundation in credit card travel hacking is timing your applications. By spreading applications for each card by 2-3 months, you avoid overspending and approval denials while meeting the minimum spends for sign-up bonuses.

Below is a breakdown of some details of our recommended application strategy. Don't worry if not all of it makes sense right away but it should slowly start sinking in as you dive into our posts and gradually start your journey yourself:

- Month 1 & 3: Apply for the United Personal Credit Card. Earn 60,000 miles after spending $3,000 in three months. With referrals and two people applying, you’ll earn 130,000 United miles.

- Month 5 & 7: Apply for the Blue Bank Sapphire Card. Earn 60,000 points after spending $4,000. Transfer those points to United for what will now be a total of 240,000 + more (including referral and miles earned for the minimum spend) points, enough for four round-trip flights to Europe. The Blue Bank points will transfer at a 1:1 ratio.

- Month 10 & 12: You both apply for the Southwest Personal Credit Card (again one of you first then 2-3 months later referring the other ) which offers 50,000 points after a $2,000 spend, giving you a total of 110,000 (including referral and minimum spend) points for domestic travel.

- Month 14 & 16: Apply for the Southwest Business Credit Card, which offers 75,000 points after a $5,000 spend, resulting in a total of 150,000 plus points.

The reason I suggest applying for the United and Sapphire cards first is assuming your first goal is an international trip and if you're flying with three other family members you will need the 240k points at the least, however if there's only two or one of you stop at 120k or 60k respectively, unless you want to rack some miles up for another trip right away as well.

However the strategy also depends on when during the year you plan to start. If your initial goal is domestic travel then even more so you should start with months 10 and 12 (think of them as October and December) and complete the loop from that starting point. The reason for doing this is also because our strategy takes into account obtaining the highly coveted Southwest Airlines companion pass allowing you to bring someone with you to fly for free which is a game changer for families.

You may also ask why is there a business card in the mix, well that SWA Companion Pass is also the reason for this and as I mentioned above I will expand on this in my next blog post.

Step 6: Track Annual Fees and Strategy Timelines

While these cards offer significant rewards, be mindful of the annual fees. It’s important to track not only the fees but also when you need to cancel or downgrade cards to avoid the fees outweighing the benefits.

Most cards offer great value in the first year due to sign-up bonuses, but keeping them for more than a year can eat into your earnings. Here’s what to keep in mind:

- United Personal Credit Card: $95/year for each card.

- Blue Bank Sapphire Card: $95/year for each card.

- Southwest Personal Card: $69/year for each card.

- Southwest Business Card: $99/year for each card.

So keep a log of the annual fees and their impact on the overall value you get from each card in a similar way as you'll find below.

Cost-Benefit Analysis (Including Annual Fees)

After factoring in annual fees and sign-up bonuses, let’s break down the total value of your rewards:

-2 United Personal Credit Cards: 130,000 (+) miles valued at $3,250 – $190 fees = $3,060 net value.

- 2 Blue Bank Sapphire Cards: 120,000 (+) points transferred to United = $3,000 – $190 fees = $2,810 net value.

- 2 Southwest Personal Credit Cards: 110,000 (+) points valued at $1,467 – $138 fees = $1,329 net value.

- 2 Southwest Business Credit Cards: 150,000 (+) points valued at $2,000 – $198 fees = $1,802 net value.

The value of the points is based on our particular experiences and needs. You can read a bit more about the way we value United points for instance here.

Total Net Value After 16 Months: $8,999

Long-Term Considerations: Holding Cards for 3 Additional Years

If you keep these cards for an additional three years with minimal or even regular spending, the total fees will amount to $2,148. To continue maximizing rewards, you may want to apply for new cards more frequently than every two or three years like in the strategy laid out above to take advantage of fresh sign-up bonuses.

Final Total Costs:

- Total Fees for 3 Additional Years: $2,148.

- Recommendation: Consider canceling some cards after the first year or two to maintain high net rewards.

The 5/24 Rule from Blue Bank

One important consideration when structuring your strategy around Blue Bank (Chase) credit cards is the 5/24 Rule. This rule means that Blue Bank will only approve you for a new credit card if you’ve applied for fewer than five credit cards from any issuer in the last 24 months. This limit applies to each individual, so you’ll need to keep track of how many cards you’ve applied for within that window.

When planning your strategy, it’s crucial to base your credit card applications around this rule, especially if you aim to apply for high-value cards like the Chase Sapphire or Chase United cards. A well-timed approach will help you maximize your sign-up bonuses while staying within the 5/24 limit. For example, both you and your spouse can each apply for five cards in a 24-month period, strategically earning rewards while taking full advantage of the 5/24 rule. As a matter of fact the 24-month rule is a good one to keep in mind as one cycle and time boxing yourself. Let's assume that in addition to the credit cards I mentioned above you also obtain a couple of travel credit cards that are more closely catered for Hotel stays ( more on those in another post but click here four our favorites) and complete your 2-year cycle with enough reward miles to cover one overseas trip every two years and multiple domestic trips within that 24 month period plus a good chunk of rewards to cover your accommodations as well. Of course you can turn some of your Southwest Airlines travel miles for hotel stays as well and depending on how many trips you take within that 24 months fully cover both airfare and accommodations. Then prepare to repeat this process for the following 24 months with some nuances and exceptions of course that I will have to write about more in the future.

By following this strategy, you’ll be able to accumulate airline miles and travel rewards that will allow you to travel internationally and domestically for a fraction of the usual cost. Use these tips to take your credit card travel hacking to the next level. Keep in mind that some of the numbers and ideas I propose are approximations. For instance while 3 months are usually a good general rule for minimum wait between credit card applications (per each person) you will need to find out for yourself whether applies to you personally and work for you well. Also some of the numbers like annual fees and sign up bonus amounts may change so keep in mind that the example I've included here are approximations based on our experiences and that you may want to customize them to fit your needs better.

I will continue to share more on all of these topics very soon, so I hope you'll stay tuned, consider subscribing to my blog via email (see form below) and following me on Instagram and Facebook.

If you enjoyed this post be sure to check out other topics on the rest of my blog at www.maxyourtravel.com and the above mentioned Insta account for other write ups, visuals, travel tips and reviews especially for travel crazy or starved families but also for anyone who wants to max their travel!

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Opinions expressed herein are the author's alone and not those of any credit card issuer, bank, hotel, airline, any financial institution or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities mentioned within the post and should not be considered professional advice of any sort.