Once you have read part 1 of using credit cards for free travel, you should now be ready to start utilizing credit card bonuses to pad your miles and points travel accounts. If you already know that your credit score is in good standing (and are already using and paying off at least one credit card) you are good to go. If not, check out MyFICO's tips for building your credit before jumping into this game. Because it's such an important step to being successful with this game, and because I'd hate for anyone to get in over their heads just from the prospect of traveling for free, I'm posting my Golden Guidelines once again. If these are already burned into your brain, give 'em a quick review anyways and continue reading!
- Your credit and credit history is an extremely important asset, and should never be jeopardized (i.e. buying things you don't need, going into high-interest debt) merely for the sake of free travel.
- Credit cards should be treated like debit cards, paying off balances as you put them on your card (or at least by the end of the month) so that you never incur any interest charges.
- You will not sign up for any credit cards (no matter how tempting the sign-up bonuses are) within 1.5-2 years before making a large purchase, such as a house.
- You will not buy things you normally wouldn't purchase for the sake of racking up miles on your credit card, but instead will shift your normal daily spending (groceries, gas, bills, etc.) to your miles/points credit cards to meet minimum spends, and pay them off as you do so.
Now, let's get to the "fun" part: applying for your first travel rewards card with sign-on bonus. In the miles and points world, a sign-on bonus is generally considered a good deal and "worth it" if it is at least 40,000 to 50,000 points with the first year's fee waived.
What?! There's a fee to use my credit card!? Now this makes me a bit suspicious!