If you are new to the wonderful, crazy world of miles and points you may have been intimidated with all the information that is out there.  You’ve probably read blogs and seen photos of people in first class cabins going to exotic places all over the world.  You may have seen my albums on Facebook and wished you could go see some of those stunningly beautiful birds in person.  Everyone has to start somewhere and you can do it too!

Although this is a “newbie guide” by my definition, I am not going to spoon feed anyone!  I have designed a set of steps to follow with an example included so you can set your own goals, determine which credit cards will get you those goals and learn how to find the best offers on those credit cards!

Once again, this page is of more use to USA based readers simply because that is where all the best credit card offers are.  I will be doing a series for Australians afterwards.

GET OUT SOME PAPER AND A PEN.  YOU NEED TO DO ALL THE STEPS BEFORE YOU APPLY FOR A CREDIT CARD

STEP 1 – EVALUATE YOUR CREDIT WORTHINESS

Evaluate your personal finances, credit card scores and ability to pay your cards off each month to avoid interest.  There’s not much point to getting free miles if you spend $100’s in interest!  Some people are adept at personal finance, others may wish to consult a professional financial manager.  Sign up for Credit Karma & Credit Sesame to get an approximation of your credit scores.  You’ll need at least a score over 700 to get most travel credit cards.  If you don’t have at least a 700, this probably won’t work for you.

STEP 2 – WORK TOWARDS A SPECIFIC GOAL

Set your travel goal.  Don’t just start applying for cards willy-nilly, you want to make sure you have the right points in the right programs.  If you have never done any independent travel and want to get your feet wet, I highly recommend Costa Rica for your first birding adventure.  The bird list is amazing, it’s easily accessible from the USA, it’s cheap to travel in, you can book most things online and they have a strong tourism infrastructure.

STEP 3 – WHICH AIRLINES CAN GET YOU THERE?

Find out which airlines fly there and how much it costs in both miles & taxes which you have to pay in cash.  Using our example of Costa Rica, let’s check the 3 major airlines who have credit cards available in the USA.  I used my own accounts to do a dummy booking for Chicago (but could be anywhere in the USA the airline flies to) to San Jose, Costa Rica.

UNITED AIRLINES

AMERICAN AIRLINES

US AIRWAYS

OK we now have the following figures to play with:

United Airlines – 35,000 miles + $49.26

American Airlines – 35,000 miles + $50.51

US Airways – 30,000 miles (for a credit card hold which you would be) + $86

STEP 4 – MAKE A SHORT LIST OF SUITABLE CREDIT CARDS

Find out which credit cards can get you miles in those 3 airlines.  Use my handy credit card reference page to see which banks offer which cards.  The figures I listed are from the bank’s own page and represent the minimum they offer, so use only as a guide.  In step 5, I will show you how to look for better offers.  Write down the bank, name of credit card and bank’s offer.  Don’t forget to check credit cards with transferable points to your airlines such as Chase Ultimate Rewards, Amex SPG & Amex Membership Rewards.  I will save you a bit of time and tell you that Amex MR don’t transfer to American, United or US Airways so let’s leave those cards for the time being.  They can wait until you are a bit more advanced.  Also leave business cards for next time unless you are already using them as a small business owner.  For a first time, try to keep it simple.

Here is what the list will look like for the Costa Rica trip and the airlines we are considering:

UNITED AIRLINES (Ultimate Rewards transfer to United at 1:1)

• United Mileage Plus Explorer – 30,000 sign up – $1000 minimum spend – Annual fee $95, waived first year.
• Chase Freedom – 10,000 sign up – $500 minimum spend, No annual fee.
• Chase Sapphire – 10,000 sign up – $500 minimum spend, No annual fee.
• Chase Sapphire Preferred – 40,000 sign up – $3000 minimum spend, $95, waived first year.

Do not use SPG for United as they only give half the rate they give for AA & US.

AMERICAN AIRLINES

• AAdvantage Citi Gold – 25,000 sign up – $750 minimum spend, $50, waived first year.
• AAdvantage Platinum – 30,000 sign up – $1000 minimum spend, $95, waived first year.
• SPG (transfers to AA) 25,000 sign up – $5000 minimum spend – Annual fee $65, waived first year.

US AIRWAYS

• Barclays – 30,000 miles – awarded on first purchase, $89 fee not waived
• SPG (transfers to US) – 25,000 sign up – $5000 minimum spend – Annual fee $65, waived first year.

STEP 5 – RESEARCH FOR BETTER OFFERS

Now that you have the names of the credit cards and which banks issue them, you now need to look for better offers on these cards.  There are several sources you will need to check before you finally pull the trigger on your application for the card.  Yes, this all takes time so set aside a weekend to do your homework and be very thorough.

• Targeted emails and snail mail which may have been sent to you inviting you to apply for a card.
• The airline’s website, they may be running a campaign for new sign ups which will beat the bank’s offer.
• FlyerTalk (my favourite resource).  Usually the credit card offers threads are so popular, they will be on the first page so just scroll down.  If you don’t see them, you can do a search, you don’t have to be a member or logged in to search.

Once you find the thread which deals with the credit card, then read the thread’s first few pages, the wiki at the top (if there is one) and always read the last few pages for the latest information.  I tend to trust FlyerTalk as a resource because they do not allow affiliate links. Since no one has anything to gain financially by sharing information, it tends to be more reliable and trustworthy.  I will show you how to evaluate the Citibank AAdvantage cards, then you will need to go through the same process with each card you short-listed in Step 4.

This thread has a wiki with a summary of the latest offers so read it thoroughly including the FAQ at the bottom.  Check out all the offers and links.  Expired links will be crossed out but left on the wiki for people who used them when they were active.

Also read the last few pages of each credit card’s master thread (go back at least a couple weeks) to see what people’s recent experiences are.  Are they getting instant approvals (indicating a bank is in a generous mood)?  Are they having to call the reconsideration department and beg for the card?  Are they being denied and why?

Now we can easily see that there are better offers here than what the bank is offering on their page.  Instead of 30,000 AA miles for a $1000 spend in 3 months, we can get 50,000 miles for a $3000 spend in 3 months.  Most people have enough everyday expenses they can put on a credit card such as food, gas, utilities, internet, car repairs, home renovations, etc to make this target.  There are ways to boost spending but those are advanced techniques better for when you are more experienced.  For the first time, go with a card where you can make the minimum spend with normal expenses.

You will need to repeat this procedure with each credit card you listed in Step 4.  Write down all the best offers, you will need them for the next step.  If you do this step, then wait a couple weeks, you need to do it again as offers come and go all the time without warning and you need to be current.

Also be sure to read the T&Cs of each credit card on the application and make note of any extras included such as anniversary bonuses, club passes, elite status, free checked bags, priority boarding, etc.

STEP 6 – EVALUATING THE OFFERS

You should now have a list of your short-listed credit cards from Step 4 but with the best possible offer you can get.  To continue with the example, I will complete the list as of this date, 12 Jan 2014.  I am going to assume that the average American can manage a monthly spend of at least $1000 to meet a minimum spend.  If you can’t do this, then go for a card with a lesser minimum spend.  I am going to put the better offers in italics.

LIST ADJUSTED WITH BETTER OFFERS

UNITED AIRLINES (Ultimate Rewards transfer to United at 1:1)

• United Mileage Plus Explorer – 50,000 sign up – $2000 minimum spend – Annual fee $95, waived first year.
• Chase Freedom – 10,000 sign up – $500 minimum spend, No annual fee.
• Chase Sapphire – 10,000 sign up – $500 minimum spend, No annual fee.
• Chase Sapphire Preferred – 40,000 sign up, 5000 extra for adding authorized user – $3000 minimum spend, $95, waived first year.
• Do not use SPG for United as they only give half the rate they give for AA & US.

AMERICAN AIRLINES

• AAdvantage Platinum – 50,000 sign up – $3000 minimum spend, $95, waived first year.  You also get 10% rebate of miles you redeem.  So your 35,000 mile ticket to Costa Rica will get a rebate of 3500 miles.
• SPG (transfers to AA) 25,000 sign up – $5000 minimum spend – Annual fee $65, waived first year.

US AIRWAYS

• Barclays – 40,000 miles – awarded on first purchase, $89 fee not waived
• OR  35,000 miles – awarded on first purchase, $89 fee waived, 10,000 miles anniversary bonus.
• SPG (transfers to US) – 25,000 sign up – $5000 minimum spend – Annual fee $65, waived first year.

As you can see, I found better offers on some of the cards.  The other cards do occasionally do better offers but none are active at this time.  Historically, SPG does a 30,000/$5000 minimum spend offer in late summer.  Chase Freedom had a 20,000 offer in Dec 2013.  Sometimes you get lucky and the timing is right!  If you are in no hurry for an SPG Amex, I would leave it until late summer.

WHICH OFFERS GET YOU THE MOST TRAVEL WITH THE LEAST COST?

I am going to now list the offers in order of which ones I would choose and why.

1. Barclays – 40,000 miles – awarded on first purchase, $89 fee not waived  OR  35,000 miles – awarded on first purchase, $89 fee waived, 10,000 miles anniversary bonus.   Choose whether you would rather have 5000 extra miles and pay the $89 or take fewer miles, no fee and hopefully an anniversary bonus if US Airways is still offering this card in a years time.  They are merging with American Airlines but no one knows how long this card will be around.  This card gets top marks for not having a minimum spend.  Barclays is a bit fussy so you should apply for their card first if you are applying for more than one.  As a cardholder, you need 30,000 miles for the trip so you will have 10,000 left over which will eventually become AA miles when the merger is final.
   
2. United Mileage Plus Explorer – 50,000 sign up – $2000 minimum spend – Annual fee $95, waived first year.   This card is giving the 2nd most miles for the least minimum spend.  You only need 35,000 miles for the trip and you will end up with 52,000 after your minimum spend leaving 17,000 miles towards a future trip.
3. Chase Sapphire Preferred – 40,000 sign up, 5000 extra for adding authorized user – $3000 minimum spend, $95, waived first year.  I’m putting this card ahead of the AA card because the Sapphire gives you double miles on spend in the travel & restaurant categories and it has no forex fee if you use it overseas.  Transfer 35,000 miles to United for the trip, leaving 13,000 miles in your Ultimate Rewards account for a future trip.
4.  AAdvantage Platinum – 50,000 sign up – $3000 minimum spend, $95, waived first year.  You also get 10% rebate of miles you redeem.  So your 35,000 mile ticket to Costa Rica will get a rebate of 3500 miles.  I ranked this card last because of the forex fee.  If you are only spending in the USA, then this won’t be an issue.  The rebate means that after you do your spend and end up with 53,000 miles, spend 35,000 for the trip, get your 10% back, you will have 21,500 miles towards a future trip.  There are no category bonuses except for spend on AA.

STEP 7 – TO APP-O-RAMA OR NOT

An app-o-rama is when someone applies for several credit cards all at once to avoid having subsequent issuers see that you have hard inquiries on your report.  I have managed to do up to 5 card app-o-ramas and get approved though I do have to struggle for some.  If this is your first time, I would say go for the US Airways card and make sure you book your flights before they leave Star Alliance on 31 March.  If you get that card with no problem, since there is no minimum spend, then add on one of the 2 Chase cards.  I would go for the Chase Sapphire Preferred to gain access to the Ultimate Rewards Mall where you can earn points by shopping online or spend points on travel (including eco-lodges) by booking through Ultimate Rewards.  You will also get the double points on spend in the travel category so that would include eco-lodges.

These two cards would have a minimum spend of $3000.  If you can afford more minimum spend within 3 months, then by all means, go for another card but do these two cards in this order first.

Once you have completed ALL the steps, you are now ready to apply for the credit cards YOU need using the best offer links YOU found!

If you have any questions, please comment below!  I am not a financial expert but I do have several years experience in the miles & points credit card game!