The 80/20 of credit card rewards: sign-in offers

You ask your favorite airline (or any airline for the practical purposes) how many points you'll need to accrue to receive a free ticket.  They may tell you something along the lines of 40,000 miles for a domestic ticket and 60,000 miles for an international flight (all round-trip.)  You realize that you might earn an average of 4,000 miles per flight that you book normally and receive 1 mile per $1 you spend with their reward credit card.  Needless to say, you'd need to spend a TON of money and/or take numerous flight before you receive your well-deserved reward ticket.

There has to be a better way, right?

If you have reasonably good credit (700+) and don't mind the paperwork in opening and tracking some new credit card accounts, you're in luck!  There are a plethora of credit cards out there that will award you around 20,000 to 50,000 points or miles if you spent $500 to $5000 in the first 3 months!  This is usually referred to as a sign-in offer or minimum-spend offer.

Pop quiz!  If you sign up for a card that awards 1 point per $1 spent AND has a sign-in offer of 50,000 points for spending $5000 in the first 3 months, what's the effective number of points you received per dollar spent if you spend exactly $5000 in the first 3 months?

A. 1 point per dollar
B. 10 points per dollar
C. 11 points per dollar

If you picked C, bingo!  By spending $5000 in the first 3 months, you receive the sign-in bonus of 50,000 points AND another 5000 points from the standard rate of 1 point per dollar.  So that brings your total to 55,000 points.  55000 points / $5000 = 11 points per dollar which is 11 times the standard rate!

Sometimes, the sign-in bonus isn't enough for 1 round-trip ticket What to do now?

You will want to go for multiple sign-in offers by signing up for multiple credit cards.  Also, get some cards from Chase that offer Ultimate Reward points.  These points can be transferred to multiple airlines such as:

• United Airlines
• Southwest
• British Airways
• Korean Airways.

For example, there's a way to amass 184,000 United Airlines miles (as of April 2014).  You'll need the following 4 cards:

Card 1: Chase Sapphire Preferred: 40,000 Ultimate Reward Points for spending $3000 in the first 3 months.

Card 2: Chase Ink Bold Business: 50,000 Ultimate Reward Points for spending $5000 in the first 3 months.

Card 3: Chase Ink Plus Business: Another 50,000 Ultimate Reward for spending $5000 in the first 3 months.

Card 4: United Airlines Explorer: 30,000 United Miles for spending $1000 in the first 3 months.  (Alternatively, if you stop by a Chase branch, you can also get another version that awards 50,000 United Miles for spending $2000 in the first 3 months.)

Note the Ultimate Rewards above can be transferred to United Airlines.  So if you meet the above minimum spending requirements, you can potentially amass 170,000 + 14000 = 184,000 United miles, enough for 2 international round trip tickets for two!

Ending Remarks

Hopefully, I've given you an overview of the low-hanging fruit in earning points for travel or simply to get more rewards on your dollar.  In later posts, I'll explore how to deal with common roadblocks in the process such as prolonging your points (so they don't expire), what to do if you're denied (and how to minimize the chances), what your options are if you don't have a business and want a business card, etc.