I've been getting a lot of questions lately from friends and family wondering how I do all this traveling, what miles and points are all about, and how they can do it, too. I firmly believe that subsidizing travel expenses with miles and points earnings is something everyone is capable of doing, but you have to be ready. In this post, I'll discuss how to know if you're ready to jump into the miles and points game.
Do I know how miles and points work?
Luckily, this one is easy, because I've written about exactly this topic in The Miles & Points Primer. I am confident that you'll be ready to move on from this step within half an hour of reading this free guide to miles and points, but it's an absolute must if you want to get it right.
Am I willing to protect my credit by staying organized?
What a headline, right? I know I said you can DO MORE AND LOVE EVERY MINUTE by using miles and points to reduce the cost of travel, but there is some work and discipline involved, too. If you don't stay organized and sort out your finances, you will end up losing this game.
Credit is a means to miles and points, but is not to be taken lightly. Your credit score is insurance against unexpected moments in life and probably the only thing that will allow you to buy a home. More importantly, credit-worthiness is one mark of a person's character. If you decide to enter the miles and points hobby, it's important to protect your credit by paying on-time and in-full. There's no value in earning miles worth between 1-3 cents each if you are paying 15% interest on the money you spent.
It's also important to be organized enough that you don't overextended yourself to reach minimum-spend or get those extra points the card companies will offer you. Start slow and figure out how to manage several credit card accounts, spend-by dates for bonuses, and avoid annual fees. I use a spreadsheet to track these important dates and figures on one page.
Do I have a goal for my miles and point?
Once you know how award travel works and are ready to protect/enhance your credit-worthiness, all that's left to do before wading in is figure out what you hope to achieve. It's easy enough to accumulate a raft of points and miles with various companies, but unless you have a plan to use them, they will be under-utilized.
While it doesn't always go as planned, we try to have a purpose for the points earned from a new card before we get it. This helps us avoid managing rewards and credit card accounts just for the preservation of points, instead of using them to explore the world. Think about what you want to do in the next year or two and go after cards that help you attain that goal.
The Bottom Line
If the desire to travel is there and you can answer all three of these questions, congrats: you're ready to start earning miles and points. Tread cautiously and stay organized to get the most out of your rewards points and, of course, keep an eye on this site for more ideas and tips to produce tremendous value!