One of the things people ask about the points & miles game (after wondering whether it’ll destroy their credit score) is whether it’s sustainable. By that they’re rightfully wondering whether they’ll quickly run out of credit cards to sign up for and other ways to earn miles after taking advantage of a few good offers.
It’s a good question to ask because the value in learning about points & miles is a lot higher if it’s something that can fuel many years of travel than a one-time hit.
When I observe people who have navigated this space successfully for a long time I wonder how they do it.
How do they keep racking up enough points & miles to fuel all of their travel needs? I mean, how many credit cards are there out there? Not that many.
If you sign up for 20+ credit cards in a year, you’ll run through the best signup bonuses quickly. Banks are increasingly rolling out anti-churning policies that have significantly throttled the points you can earn through signup bonuses.
Although banks are also introducing new products (that in some cases enable new signup bonuses) they don’t nearly keep pace with the appetites of enthusiastic reward seekers.
So if you want to keep growing your stash of points & miles you’ve got to try harder for credit card signup bonuses.
And if you’ve got the constitution for it, there are other ways to earn points & miles without traveling. That’s where I’m suggesting a “liquidation first” approach. You’ve got to assess what’s available on the liquidation side of the house that best fits into your current station in life.
If it works for you, Visa Gift Cards are hard to beat as a method of manufactured spend. If your daily travels take you past stores that allow you to regularly buy money orders with Visa Gift Cards it’s a fantastic setup. But not all locales are so fortunate. Take stock of your local liquidation channels and assess realistically how much volume you can fit into your schedule.
Gift card reselling can be a good fit if you’re regularly in front of the computer (or perhaps clever at deriving in-store deals) and comfortable navigating the space. Things have changed in the past couple years. You really need to secure bulk seller relationships to get competitive rates that make deals breakeven or better, and it can be hard to get approved as a bulk seller when you’re just starting out. But definitely explore liquidation channels to get a feel for how it works.
Similarly with product and concert ticket reselling. Start small so you can figure out which products are restricted, what limitations are in place to thwart resellers. Establish relationships with the selling avenues to get a feel for the fees and whether the overall work flow suits you.
Some of the best credit cards come with high annual fees. To offset those annual fees you’ll want to figure out how to convert benefits like air travel incidentals into cash. Research those methods so you can get a feel for the net annual fees and be in a position to execute when you get the cards.
Finally, perhaps the greatest liquidation challenge of all is knowing ahead of time how you’re going to use points & miles tied to specific airlines and hotel chains. I favor flexible currencies that allow booking a wide variety of travel but there’s merit in exploring all the options out there. You just have to have a plan in place ahead of time how you’re going to use them.
When racking up credit card rewards, the “buy” side is easier than the “sell” side. Likewise, it’s easier to accrue point & miles than it is to redeem them.
When trying to decide where to focus your energy in this game, I suggest taking a “liquidation first” look at your earning potential. Then, align that potential with your travel goals for ongoing success.
By Milenomics contributor @RobertDwyer