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7 Lessons For Credit Card Planning

I’ve been working with a bunch of people lately with my free credit card planning service, and I’m seeing that the same issues keep cropping up when I speak with people who are trying to figure out the best credit cards for their needs. I thought it would be helpful to pass along a few ideas for planning your credit card strategy which will work for those just starting out and those with half a million miles sitting in their accounts.

Lesson 1: Have a specific trip in mind.
I think this is really key to starting out with credit cards – there are a lot of cards out there, and lots of ways to earn miles. It helps tremendously if you have a specific destination so you can build toward a specific goal. I know that may sound obvious, but I hear a lot of “I just want to build up a bunch of miles.” That’s fine, but you’ll get a much better return if you’re focused, say, on a trip for 2 to Paris.

Lesson 2: Get a card that earns Hilton points with every churn.
Unless you’re extremely picky about which hotel you stay in, your best bet for earning hotel points is through the Hilton Hhonors program. I have a handy chart of 9 credit cards that you can get to earn Hilton Hhonors points. You should always include (at least) 1 of these in every churn you do. You’ll find you’re basically printing Hilton points, which, unless you have some sort of massive aversion to Hilton hotels (or need to stay at their highest end hotels, which require an absurd number of points) you’ll be happy you have.

Lesson 3: Don’t even bother with Delta
Yes, Delta Skymiles have a few specific destinations where they can be valuable (Gary lists them out here) but those are few and far between, and if you end up not taking a trip to one of those destinations, you now have a bunch of pretty much useless miles. I’ve had several people come to me with a hunk of Delta miles in their account wondering about how they can get that balance up for an upcoming trip. Invariably I tell them to forget about the Delta miles and focus elsewhere.

Lesson 4: Get the US Airways credit cards.
There is basically no reason NOT to get the US Airways Mastercard (here). 40,000 miles after first purchase, and the first year fee is waived. That’s a free off-peak trip to Europe for doing nothing. Again – there is absolutely no reason why you would not get this card.

Lesson 5: Diversify – It helps with long-haul premium awards
This may sound slightly different than the advice that is typically given around frequent flyer miles, where people suggest you focus on one program. That is true for actual flying (so you can earn Elite status), but when it comes to credit cards you’ll often find that having 40,000 miles here or there will come in handy down the road. For example, there are plenty of occasions where your best bet is to fly, say, to Europe using Air France miles on Delta metal (with points you transferred from Starwood) and back using United miles. Or American. Perhaps you want to go business class to Asia but can’t earn enough miles on United through credit cards for the 120,000 miles you need. Why not go one-way on Star Alliance using 60,000 United miles and back on Cathay using 55,000 American miles? For those with lower spend, it’s easier to earn those bonuses without putting a ton of spend on the card. Breaking up long-haul premium awards into two different one ways can make life easier (perhaps that should’ve been its own lesson.)

Lesson 6: Starwood has lots of uses beyond hotels
I almost never use Starwood points to stay at a Starwood hotel (except for some occasions where I’ll use cash + points for a stay), but those points are incredibly valuable to top off for an award in a program where you’re a bit short. Or to transfer to Air France Flying Blue because it requires only 20,000 Starwood points for a one-way ticket on Delta to Europe (with no fuel surcharge). Get the Starwood Amex — those points will be useful for you at some point.

Lesson 7: If your dream trip is to Europe, focus on Star Alliance carriers
Because American charges fuel surcharges on BA and Iberia flights to Europe, their miles are less valuable for flights to Europe than United miles, as they do not charge fuel surcharges on any of their partners to Europe. If you want to go to Europe, focus on getting points on United and US Airways (that US Airways MC I mentioned above + a US Airways business credit card = 1 free ticket to Europe). They have a bunch of partners and availability (certainly in coach, but even in business especially on Lufthansa) is pretty good all year round.

Obviously, there’s tons of nuance around all of these suggestions (which is why I offer my free service in the first place), but the tips above should be helpful as you think about getting miles for your next trip.

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  1. This post was one day late, Jared…one day late. I applied for some cards yesterday.

    I did okay following your rules except that I did get the Delta Amex but I had a good reason. I’m flying Delta in March with husband and 3 kids (burning our stockpile of Delta miles) so we can get free checked bags and priority boarding.

    Anita

  2. Excellent tips that I’ve learned the hard way over the last few months. Now I have a ton of Delta and BA miles that are useless for my upcoming trips. . .

  3. 7 Lessons For Credit Card Planning - Street Smart Traveler (beta) - pingback on October 23, 2012 at 6:59 pm
  4. Thanks for these awesome tips, Jared. I’ve already got a card for Star Alliance, and was looking into a second card. Although after reading your list, I want 2 or 3 now. Ha ha! Two more airline cards and a Hilton card (or Starwood?)

    A friend recommended the US Airways card to me too. I was skeptical, but your support for it will make me reconsider.

    What do you think of the Alaska Airlines card? It’s not a part of an alliance, so it has an interesting mix of airline partners.

  5. how come us air is making me pay $89 fee to get the 40k miles?

  6. I clicked on the link for the USAir card deal but it says it’s only available for members who are Chairman’s Preferred Status. Do you have a link for that offer that is available to anyone?

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