THE POINTS GURU: Drew
WHY YOU SHOULD TRUST HIM: Drew is an Emergency Nurse Practitioner who resides in Denver Colorado, with his wife and two furry children. When he’s not at the hospital working, he’s typically one of four places- on a trip, coming back from a trip, with friends or on the golf course. Drew has been traveling internationally since the age of three and has had visited over 40 countries on six continents.
Have you always loved traveling?
In short, yes. The long story: Growing up, my parents instilled in me the importance of travel. Birthday and Christmas gifts were not the norm… instead of getting a new bike or a video game, our family would travel to places like Morocco, Zanzibar and Nepal. I learned the importance of expanding your worldview and realized that getting out of your comfort zone, eating different things, smelling different smells and interacting with different people and cultures is one of the most important things that you can do as an individual. Taking a deliberate approach to explore the way that someone else lives, eats and works on the opposite side of the world really enriches your life. As an adult, I’ve made a point to travel with my wife often as we can. At the end of the day, we’re all on borrowed time, so I feel it’s important to travel when you can instead of putting it off for a later date.
People are always skeptical when it comes to applying for multiple credit cards. I can tell you that when I started the “points game”, my credit score was around 712, and now I’m consistently in the 760-816 range.
So, tell us, how did you get into the “points game”?
My parents were pretty savvy and created an American AAdvantage account for me when I was three. By the time I was in college, I had accumulated close to 275,000 Aadvantage miles. I had heard about people using miles to travel for free, so I started doing research to see how I could use my points for a cool trip. I was able to secure two First Class tickets on a combination of Cathay Pacific and American Airlines from Oklahoma City to Thailand, Thailand to New York City and then New York City back to Oklahoma City for $23.50 (taxes and fees included). The total cost of airfare, if paid for out of pocket, would have been around $40,000.
From that point on, I was hooked. Since the initial trip to Thailand, my wife and I have traveled to Bali, Komodo, South Africa, Hong Kong and Bermuda and have redeemed over a million miles/points to cover almost 90% of our airfare and hotel costs.
If someone is just starting out in the “points game”, what are the first steps they should take?
The first thing I try to impress upon people is to do what you want. You may prefer to use your points for two trips flying Economy versus taking one trip in Business Class. There are hundreds of ways to utilize your points, so figure out what you value and work backwards from there.
There are a few things I recommend before you start applying for credit cards. First, you need to understand your credit score and learn about credit utilization, length of credit history and what makes your credit go up and down. You need to protect you credit throughout the course of your life, so understanding it is key. There are several websites which offer a free credit report, including Credit Karma and Credit Sesame. I suggest not signing up for credit cards if any of the below apply to you:
1. You have a credit score below 690
2. You have an extremely high degree of debt in relation to your current income
3. You are planning a large purchase in the next 6 months to one year (house, car, school, loans, etc.)
4. You carry a balance on your credit card and do not pay them off in full each month
5. You are disorganized and not capable of juggling multiple accounts.
6. You can’t meet the required minimum spend on a credit card to acquire the bonus
7. You spend more money than you can afford
But won’t opening a bunch of credit cards negatively affect my credit score?
People are always skeptical when it comes to applying for multiple credit cards. I can tell you that when I started the “points game”, my credit score was around 712, and now I’m consistently in the 760-816 range. For each credit card application, you will suffer a 7-12 point drop in your credit score, however this “hard inquiry” will drop off within 6-12 months and if managed appropriately, your score will actually increase. Nerd Wallet explains “Credit utilization ration” this concept nicely.
Do you ever use your points to get cash back?
I wouldn’t… but it’s entirely up to the individual. If you prefer receiving $500 cash back over the course of the year, then get a credit card which offers cash back. But if you would rather redeem 50,000 miles for a Business Class trip to Europe, then do that!
In my opinion, the biggest mistake you can make is to make purchases with debit cards. Yes, it helps you budget, but you get nothing in return for the money that you’re spending! If I use a debit card to buy a $1,000 TV at Best Buy, then I get a TV. BUT, if I do a bit of research and use my Chase Ink credit card (which offers 5x points per dollar at office supply stores) I can buy that same TV and earn 5,000 points. That’s enough for a free night at several Hyatt hotels!
The other mistake is not doing research on how to use your points. For example, Chase Ultimate Rewards points will transfer to multiple hotels and airlines. If you need to get from Dallas to Cancun, you can either transfer 17,500 points to United and book that way, OR transfer 7,500 points to British Airways for a similar flight itinerary. Knowing the ins and outs of a company’s loyalty program is key.
What’s your current credit card(s) of choice?
In my wallet now, I have the Citi Prestige Card which offers 50k Thank You points after you spend $3,000 in three months. It offers 3 points per dollar for airfare and hotel, 2 points per dollar on dining and entertainment and 1 point per dollar spent on everything else. I also have the Chase Freedom and American Express EveryDay Preferred Card which I use for their various categories including dining, gas and groceries. I’ve managed to accrue a sleeve of cards so that I’m obtaining at least 2 points/dollar on most purchases.
One other nugget of wisdom is to acquire points in flexible currencies such as American Express points, Chase Ultimate Rewards or Citi Thank You points. Those points can then transfer to specific partners so that if a program devalues, (which is inevitable) then the the value of your points doesn’t take a big hit. Remember, points are just like currency, so it’s best to earn and burn them. Don’t keep putting off your trip for five years, because eventually those points will be devalued.
What was your favorite hotel stay?
What’s the craziest thing you’ve done to earn points?
Haha. Probably the time I stayed at a hotel 20 minutes away from my house just to earn enough points within a certain time period. My wife thinks I’m crazy.