Developing a secondary strategy for Credit Card Rewards Points

In previous posts about credit rewards strategies, I’ve talked about how to develop a rewards strategy, discussed why I use the Starwoods American Express and Schwab Visa as my primary cards, and talked a little bit about how I’ve earned extra SPG points buyingcoins from the U.S. Mint. Now it’s time to talk about secondary strategies for earning rewards points.

So you understand your goals and spend profile and you’ve picked a card that matches these two things, but you are thinking, “There are so many rewards programs”, you begin to wonder if you can take advantage of a few more programs. The answer is a resounding Yes! Let’s talk about secondary strategies for a minute. The way I view secondary rewards programs where it can either help contribute to an overall goal such as travel or you obtain one time bonus for things like gift cards or cash back. In other words, the credit cards that are part of your secondary strategy should include those cards with sign up bonuses. Let’s discuss a couple of examples.

I recently signed up for the American Express Rewards Plus Gold card and the Business Gold Delta Skymiles card. Both of these cards had sign up bonuses if I spend a certain amount of $ within the first 3 months of getting the card. My intentions are to fulfill the spend requirements for the sign up bonuses by ordering coins from the U.S. Mint. This way I do not have to divert any of my real spending away from my Starwords American Express card to earn those valuable SPG points.

The specific bonuses offered by the two American express cards were 30,000 skymiles and 15,000 membership rewards points. Now, in prior posts, I have alluded to the fact I am in the process of dumping all my NWA/Delta frequent flyer miles due to the massive devaluing of the program. These 30,000 miles will help me get close to having a 120,000 remaining miles to use on award travel. If I am lucky and search diligently enough, I will be able to find a perk saver business class award ticket to Asia.

In regards to the gold card and the reason for getting that, I currently have about 135,000 membership rewards points. Amex membership rewards points are similar to SPG points in that they can be converted to miles in frequent flyer programs. Additionally, if I so choose, I could convert the points to SPG points at a 3 Amex points to 1 SPG point redemption ratio. So with these 15,000 membership rewards points, I have the possibility of another 5,000 SPG points. I’m still in the process of determining if a conversion is the right way to go on this. I’ve also read that converting to Air Canda miles is another step in the right direction because of their generous award ticket policies of 2 stop-overs with one going across the Atlantic Ocean and the other going in the direction of the Pacific Ocean. My decision on which program to convert to will depend on how many SPG points I have at the end when I am trying to book my round-the-world trip and how I decide to book the travel (a bunch of one way award flights or one massive ticket).

If you can not tell, my primary goal for rewards points is travel. These two cards help me towards that goal even though after I fulfill the spend requirements for the bonus points, I will not use them again. In fact, I will probably cancel the Delta Gold Card. Additionally, I will my business Amex gold card. The reason I hold on to an Amex gold card is because I want to keep the membership rewards points and not have to spend them. So on a yearly basis, I find another Amex gold card with a sign up bonus and free annual fee the first year and I can continue to keep my membership rewards points.

Your primary goal may be cash back or you may come across an offer for an amazon giftcard or just a random $250 cashback that may have nothing to do with your primary goal at all! Maybe you have planned a big purchase at Amazon.com and could use that amazon giftcard or cashback. My suggestion is do not shy away from those opportunities. I recently applied for a chase sapphire preferred card. The bonus points being offered was 25,000 after the first purchase. I don’t even have any ties to any chase reward program, but I figured I could make use of those 25,000 points some how! This is what I mean by take advantage the opportunities. Of course if Chase approves me, I will get the bonus points, figure out the best use for them and close the card 3-11 months later. You can do a similar thing with Citi thank you points – apply for those cards that offer thank you point bonuses, cancel them in 3-6 months, apply for a different card with a thank you point bonus, and continue this process. I have even read of people applying for the same card a year or so later and getting the sign up bonus again!

Now, I will add a couple of caveats here. I caution you against applying for a large number of cards if you’re looking to get approved for a loan in the near future. Also, make sure you understand the terms for getting bonus points and if there are any annual fees involved. Typically, it is best to look for cards that are at least fee free the first year. Additionally, you do a need a decent credit score of 720+ to fully execute this strategy. These are just a couple of additional points to keep in mind.

There are many rewards points programs and credit card offers out there. Developing a secondary strategy that is geared towards your primary goal can help you realize your goal even quicker. Additionally, if you find one of those really good offers like $250 cash back or a $250 giftcard, jump on it! Sometimes it doesn’t matter if the offer helps you towards your primary goal or not if it is really good!

Feel free to leave your suggestions in the comments for your primary and secondary rewards earning strategies.

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Game Changing News for those who collect miles and points – American Airlines One-Way Mileage Awards!!!

According to Dansdeal.com (a site I frequent for deals and news), American Airlines has just launched one-way awards. I’ve been waiting for US-airlines to allow their frequent flyer members to redeem one-way awards. Previously and on all other US airlines, if you wanted a one-way award, you would have to book the roundtrip award ticket, plan on losing half the ticket, and half the miles paid for that award. Now with American, you can get a one-way award for half the cost of the round trip. This opens up new possibilities and flexibility for me as I plan my around the world trip. Basically if I wanted to fly somewhere to Asia and Europe and do a bunch of overland travel, I could book a one-way award with American and do it without being locked into a schedule whereas with other airlines, I would have to set a return date and keep paying fees to change the return date or lose the return portion of the trip. I’m also glad to see American participates in the Starwoods Preferred Guest (SPG) program. This further validates my plan to continue to earn SPG points in an effort to maintain flexibility as far as airline partners are concerned. I might even apply for American Airlines credit cards now.

DansDeals.com » Blog Archive » AA Launches One-Way Mileage Awards!!!.

My latest credit card arbritrage

Boxes of Coins
Boxes of Coins

I need to provide an update on my latest credit card arbitrage. About 25 days ago, one of the sites I subscribe to in my google reader showed a deal with US Mint $1 coins. Long story short, you can use your credit card to order the $1 coins at face value. So the 5,000 coins that I ordered costed me exactly $5,000. As a kicker, shipping on these coins was free! I was surprised to learn that they were delivered via next day air (Thank you uncle Sam!). Before I address the detractors, I must say there are some limitations with this deal. First, there is an order limit. For this specific series, the mint always a maximum order of 5,000 coins.  Additionally, the presidential dollar coins are limited to quantities of 500 per order. Second, my order took around 20 days to process. I actually thought the mint canceled my order. I tried calling them but the automated system always disconnected me. Third, if you want to do this, it’s probably best to have a local bank. When I went to the bank to deposit these coins, I had them count it and they asked me why I ordered such a large quantity of coins. I was completely honest with them and said that I did it for the credit card points. Fourth, I was relatively surprised at the size of the boxes. I was expecting 1 very large box. The combined shipping weight of the boxes was 46 pounds. Needless to say, not very light!

Some people might be shaking their heads in disgust or wondering who would be crazy enough to order 5,000 coins from the US Mint with their credit card. Well there are a couple of unique strategies that you can use to make some extra $ of this deal. First, you can order the coins with a cash back card. This will give you a certain percentage of $ back based on the purchase price. Second, after you make the deposit at your bank, you can move the deposited amount into a high yield savings account. This will give you 30 or so days of interest on the deposited amount. Probably anywhere from 10-20$. Essentially, these coins are an interest free cash advance.

I am actually using the points I get to collect Starwoods Preferred Guest (SPG) points. I am definitely going to execute this deal again. I will do it with the Presidential coins next and possibly order another round of the native american coins. My local bank is somewhat small and hadn’t even received any of these 2009 Native American coins from the Mint. I am a little bit leary about dropping another $5,000 off in coins right away so I will do the presidential coins first.