For over twenty-five years, I’ve had credit cards that earned points or miles. I originally had an American Express Gold travel card that paid me 1.5x points for all travel purchases. Back then, any bonus category was rare, so earning extra Membership Rewards points for my trips was fantastic. I eventually got a Diners Club card because once I was old enough to rent a car (25 years old), the primary renter’s coverage was very important to me (being the son of an insurance claims adjuster helps you set priorities).
I’ve seen travel cards come and go. It was only about fifteen years ago that I started getting serious about points and miles. I cautiously waded into the world of credit card sign-up bonuses.
Each card I signed up for had a specific purpose. The Alaska Airlines card was to get a $99 companion ticket I could use for our anniversary trip to Hawaii. The Starwood AMEX had flexibility with the number of airline transfer partners available. The Sapphire Preferred was our entry into the world of Chase Ultimate Rewards opportunities. When I signed up for each card, spread out over several months, I made sure I’d be able to easily meet the spending requirements without having to spend any extra money over our budget. When I knew I had a large purchase coming, I’d pick out a new card so we could take advantage of an extra sign-up bonus.
I also made sure I was getting extra points where available. Shopping portals. AMEX offers. Bonus categories. Special offers. Retention offers. I looked into them all. When I was examining if I should keep a card, I always looked to see if there was something about it that would make sense for me not to cancel it. I’ve always wanted to have a good relationship with the banks because I need them to finance a car and get a mortgage.
Even with taking several trips that cost a boatload of points, I still have over two million of them spread over all of our accounts. Not too bad. It’s more than enough for whatever trip we’d ever want to take and still lets me redeem 100,000 points for last-minute tickets for a family emergency without batting an eye.
So if I’m the tortoise in this game, who’s the hare?
Doing research for this website, I read plenty of bulletin boards, Facebook posts, Twitter feeds and other websites and have seen many things that make me shake my head.
They usually say something like this:
- I just signed up for ten credit cards; when will I get my miles?
- I bought $10,000 in gift cards; what can I do with them?
- I charged $5000 a week to my card, paid it off, and charged another $5000 every week for 3 months. The bank (Chase, AMEX, take your pick) just shut down my accounts. Why?
- I signed up for a card and got the signup bonus. How soon can I cancel the card?
- Can I sign up my pets as authorized users on my account?
- I signed up for 25 cards over the last eighteen months. What card should I sign up for next?
There are many foolish things that you see every day. People are doing things they have no idea about but may have a long-lasting effect on their financial well-being.
Some people can do all of the above things (well, not signing up your pets) and make them work. I’ve met them. They are brilliant people who know the risks involved with their activities. For example, there’s Greg from Frequent Miler who, in 2015, used multiple credit card bonuses over seven months to earn 1.2 million Virgin Atlantic miles and spent a week on Richard Branson’s Necker Island.
But some people don’t know a good thing when they see it and push things too far. The most recent example is people abusing the Pay Yourself Back feature of the Aeroplan Credit Card. While it was promoted as “unlimited,” some people tested how unlimited the offer actually was and found out when Chase shut down their accounts.
For this offer, I share Nick’s feelings for those who abused this offer.
If you were thinking about redeeming a large quantity of Aeroplan points for Pay Yourself Back, you may want to give it a second thought. I haven’t heard shutdown reports of anyone who only redeemed an amount in the low hundreds of thousands. My guess all long was that 100,000 was probably a safe number, but I’m just not sure where the limit lies or if anyone can know where it would be.
I’m not against those who can push the envelope and see what’s possible. I’m just not one of those people. I want to sail along under the radar, picking up fruit when it’s plentiful and scrambling around to pick up the scraps when pickings are slim, surviving off the stash I’ve saved up over time.
When collecting points and miles, remember these two quotes:
“Pigs get fat. Hogs get slaughtered.”
“The early bird may get the worm, but the second mouse gets the cheese.”
I might miss out on a lucrative back-door offer to earn a ton of miles. That’s OK. I can live with losing out on some extra miles. I’m happy going along slow and steady. Taking my time. Not stretching myself too far. Maybe that’s not your style. That’s OK—Your Mileage May Vary.
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