How I Amassed 1.3 Million Hotel and Airline Points in Less Than a Year

In early 2015 I decided to seriously work on collecting as many airline and hotel reward points as possible. When I looked at my total point balance at the end of 2015 and saw that I had accumulated 1.3 million points in less than a year, I even surprised myself at how successful I had been. When redeemed, the value of a point can vary according to where you spend the points, but in general if you figured that each point is worth roughly one cent, 1.3 million points equates to about $13,000 worth of hotel and airline rewards. See my post http://ournomadicexperience.com/introduction-to-points-hacking/ for a basic explanation of point values.

Recently I did an in depth review of all my loyalty account statements to find out where all those points I acquired in 2015 actually came from. It might surprise you to know that only about 10% of the points I accumulated in 2015 actually came from base points for travel. Most of the points came related to loyalty credit cards and the rest came from having elite status or taking advantage of special promotions and programs that hotel chains offered. This goes to show that you don’t have to fly or stay in hotels a lot to accumulate a lot of points.

Here is where my points came from in 2015

Seventy-seven percent of my 1.3 million points came from credit card signing bonuses, credit card spending threshold bonuses and credit card spending. Since this is by far the highest driver of points I will break this down even further and explain how I got these points. Before I do this, let me give my warning and disclaimer.

CAUTIONARY WARNING, DISCLAIMER – I am a huge proponent of living life without debt. We are totally debt free and pay off our credit cards in full every single month. A number of financial advisors that I highly respect strongly believe that you should use cash for everything and not even have a credit card. If you already carry significant credit card debt or feel that you might be tempted to not pay off your credit card “just this once” I strongly recommend not using credit cards to accumulate points.

Here is how I obtained the credit card based hotel and airline points. These points come from what are called “loyalty credit cards.” These are offered by airline and hotel companies. For example, I have a Delta Airlines, American Airlines and a United Airlines credit card. I also have cards branded from Starwood Hotels, Marriott, Hilton, Holiday Inn and a few others. There are three major ways to get points from these loyalty cards.

Signing bonus – to entice you to use their card, companies will offer a signing incentive to get their card. For example, “Earn 30,000 Delta Sky Miles when you sign up for a Delta Gold American Express.” Or “Earn 80,000 Marriott Points when you sign up for a Marriott Rewards Premier VISA card.” These signing bonuses typically come with a spending requirement in the first three months in order to get the bonus points, usually from $1000 – $3000.

Another aspect of signing bonuses is that you often can get additional bonuses when you add an authorized user to your account, for example, your spouse. These bonuses are typically smaller – 3000 to 5000 points. In 2015 we signed up for quite a few cards, one for me and one for my wife for the same airline or hotel and then added the other as an authorized user. Double the pleasure, double the fun!

Threshold bonus – as an added incentive to use their card, many companies will give you a bonus once you spend a certain amount in a year. For example, United Mileage Plus Explorer card gives you 10,000 bonus points when you spend $25,000 on their card in a year. Hilton gives you 10,000 bonus points if you spend $1000 at Hilton Hotels on their card in a year.

Spend – these are points that are awarded for using your card. At a minimum you will typically get one point for every dollar you spend. All cards usually give more points when you use their card to buy their product. For example, Hilton gives you six points for every dollar you spend at a Hilton property. Delta gives you 2 points for every dollar you spend on Delta products. Some cards will give you additional points for certain categories like restaurants, gas, etc.

We use our cards for everything we can; rent, charitable giving, cell phone, groceries, restaurants, etc. For us we had no trouble meeting the three month spending requirement for the signing bonuses. Paying our rent by credit card, our largest single monthly expense, certainly helped us do that.

What does getting so many cards do to your credit rating? One of my concerns before embarking on intense points acquisition was that it could potentially harm my credit score. The opposite actually happened, our credit score skyrocketed! Remember, we are debt free and have a spotless payment record, but still our score went up significantly.

Here is why our score went up. One of the items that credit scoring companies like TransUnion and Equifax use to determine credit worthiness is “Credit Utilization” this has a very high impact on your credit score. Credit utilization is the available credit limit on all your cards divided by the average balance on your cards. If you use your cards, even if you pay off the balance in full every month like us, at any point in time you will show a balance on your cards. Getting more cards with more available credit actually helps this factor. Let’s look at a quick hypothetical example.

E.g. In January if I have one credit card with a $1000 limit and charge an average of $500 per month that I pay off, my credit utilization is $500/$1000 = 50% not a very good ratio.

I apply for and get 9 more cards all with a $1000 limit but still only charge $500 per month total between all the cards that I pay in full. My credit utilization is now $500/$10,000 = 5% a very good utilization ratio. I am charging the same amount each month, but because I have many cards my utilization ratio goes down significantly.

The other 23% of my points

Seventy-seven percent of my points accumulated were related directly to loyalty credit card spend. The other 23% of my points came from:

Programs – in 2015 the points I got from programs accounted for almost 8% of the 1.3 million points I earned. Throughout the year hotel chains will offer special programs that award more points than usual for stays. Typically, you must sign-up for the program, however, it doesn’t cost anything. For example, at the time of writing this post, Starwood is offering triple points on stays at Sheraton hotels for at least two nights from May 9^th through July 31^st plus an extra 1000 points if the stay includes a Friday or Saturday night. In 2015 I earned over 50,000 bonus points for completing a single program with IHG (Holiday Inn). If you keep up on these programs and use them strategically, they can generate significant points.

Elite Bonus – almost 5% of my 1.3 million points came from having some sort of status with the airline or hotel. All hotels and airlines have programs that reward people that use their product frequently. This is called “gaining status”. The programs vary by hotel chain or airline but there are usually at least three levels with names like, Silver, Gold, Platinum, Diamond, Spire, etc. You get perks like expedited check-in, first choice on seats on the plane, late check-out, etc.

Another benefit of status is that you get more points for using their product than someone without status. For example, at the time of writing this post, Hilton gives you 10 points for every dollar you spend at a Hilton hotel. If you have Silver status, you get a 15% bonus above and beyond the 10 points per dollar. With Gold status you get a 25% bonus, Platinum status gives you a 50% bonus.

Here is another benefit of signing up for many loyalty credit cards, some cards will give you status just for having the card. For example, having a Hilton VISA Signature card will give you Silver status automatically, a Hilton AMEX Surpass card will give you Gold status automatically. Not all give you a status bump, but many do.

Business travel – I worked for a large company for the entire year in 2015. I had what I would describe as a moderate travel schedule. I travelled for business and was an officer in a couple of industry organizations that required me to travel as well. The company I worked for required that we use a corporate credit card, so I did not collect any points for what I spent on travel with my company. However, I did get points for airline and hotels where I was registered in their particular loyalty program. These points accounted for about 6% of my 1.3 million points earned in 2015.

Personal travel – travel for vacations, occasional weekend trips and the like accounted for a little over 4% of the total points I accumulated in 2015.

There are a few take-always from my experience in accumulating 1.3 million points in less than a year.

• You can generate significant points with airline and hotel companies without actually flying on airplanes or staying in a hotel
• Being aware of and strategically using hotel promotions can yield benefits
• Gaining status with an airline or a hotel chain can accelerate your points earning capability.

Stay tuned for future posts where I will address the following topics:

• How to evaluate and prioritize credit card sign-ups to maximize points
• Short-cuts to airline and hotel status (I achieved Delta Platinum Status in 2015 and yet only flew 36,000 qualifying miles, I was United Platinum at the end of 2015 and only flew 15,000 qualifying miles)
• How to get maximum value for the points you have earned