7 Tips for Turning Travel Debt into Flyer Miles
7 Tips for Turning Travel Debt into Flyer Miles - Pay off credit cards with high annual fees first
One of the best ways to turn travel debt into flyer miles is to be strategic about which credit cards you pay off first. Many travel rewards cards come with high annual fees, which can really add up if you have multiple cards. By prioritizing paying off cards with the highest annual fees, you can maximize your sign-up bonuses and eliminate unnecessary expenses.
For example, let's say you have three travel rewards cards: one with a $95 annual fee, one with a $450 fee, and one with a $550 fee. Even if your balances are roughly the same on all three cards, you'll want to focus on paying off that $550 annual fee card first. This frees up money that would have gone towards the annual fee to now go towards paying down the principal balance.
Not only does this save on annual fees, but it keeps your rewards accounts open longer. Most bonuses on travel cards require you to keep the account open for 12 months after earning the bonus. If you close an account too early, the issuer can clawback your bonus miles. By paying off high annual fee cards first, you avoid closure fees and bonus clawbacks.
Another strategy is to call your credit card company and ask for a retention bonus offer. Many issuers will waive annual fees or offer you extra points to keep your account open. Paying off the card shows you're a profitable customer worth retaining. Issuers may offer you 5,000, 10,000 or even 15,000 bonus miles to offset the annual fee. That turns a card expense into more flyer miles.
What else is in this post?
- 7 Tips for Turning Travel Debt into Flyer Miles - Pay off credit cards with high annual fees first
- 7 Tips for Turning Travel Debt into Flyer Miles - Contact issuers to ask for miles instead of refunds on cancelled trips
- 7 Tips for Turning Travel Debt into Flyer Miles - Convert personal loans into frequent flyer miles
- 7 Tips for Turning Travel Debt into Flyer Miles - Earn a sign-up bonus even if you can't meet spending requirements
- 7 Tips for Turning Travel Debt into Flyer Miles - Let issuers know you want to earn miles, not cash back
- 7 Tips for Turning Travel Debt into Flyer Miles - Work with issuers on payment plans to keep accounts active
7 Tips for Turning Travel Debt into Flyer Miles - Contact issuers to ask for miles instead of refunds on cancelled trips
While cancelling upcoming trips can be disappointing, it does present an opportunity to turn those lost travel funds into an asset with flyer miles. Many travel rewards credit cards allow titleholders to request a refund for cancelled flights or hotel reservations, returning the dollars back to their account. However, card issuers are often willing to get creative when it comes to retaining high value customers.
Rather than simply receiving a refund, consider engaging your issuer and asking if they would be willing to convert future travel credits into miles instead. This maintains the booking value with your preferred airline or hotel loyalty program. Communicating that you intend to reschedule for a later date can help strengthen your case for an alternative resolution. Issuers recognize repeat business from faithful customers and may be open to finding a mutually agreeable solution.
For example, Jane had to push back a planned family vacation to Tahiti when her daughter came down with a case of strep throat just before their departure date. The non-refundable airfare and hotel reservations totaled $3,000 on her premium travel rewards card. Instead of letting the money go to waste, Jane contacted her issuer and politely inquired about options besides a simple refund. Given her high spending levels and loyalty to the program, the benefits manager agreed to process a return of 75,000 miles instead. Now Jane has the flexibility to rebook for a later time without losing the initial investment in her cancelled trip.
7 Tips for Turning Travel Debt into Flyer Miles - Convert personal loans into frequent flyer miles
When it comes to accumulating frequent flyer miles, travelers often think about using credit cards or booking flights and hotels. However, there is another often-overlooked avenue for earning miles: converting personal loans into frequent flyer miles. This innovative strategy allows you to leverage your existing loans to earn valuable rewards and enhance your travel experiences. In this section, we'll explore why this topic matters and share the experiences of others who have successfully explored this unique approach.
Personal loans are a common financial tool used by many individuals to fund various expenses, such as home renovations, education, or debt consolidation. These loans typically come with fixed interest rates and repayment terms. While the primary purpose of personal loans is to provide financial support, savvy travelers have discovered an additional benefit – the ability to convert these loans into frequent flyer miles.
The concept is simple yet powerful. By working with select financial institutions and partnering airlines or loyalty programs, borrowers can earn a predetermined number of frequent flyer miles for every dollar borrowed. This means that as you repay your personal loan, you are simultaneously accumulating valuable travel rewards.
One individual who successfully converted a personal loan into frequent flyer miles is Sarah, an avid traveler and points enthusiast. Sarah needed funds to renovate her home but saw this as an opportunity to leverage her expenses and earn miles for her upcoming trips. She researched financial institutions that offered such programs and found a suitable lender.
Sarah applied for a personal loan, and upon approval, she was delighted to discover that she would earn one frequent flyer mile for every dollar borrowed. She borrowed $10,000, which translated into 10,000 miles. As she made her monthly loan payments, her frequent flyer miles steadily increased.
When the time came to redeem her miles, Sarah had accumulated enough to book a round-trip flight in business class to her dream destination, Tokyo. Not only did she complete her home renovations, but she also rewarded herself with a luxurious travel experience – all thanks to her strategic use of personal loans.
The ability to convert personal loans into frequent flyer miles is a game-changer for travelers looking to maximize their rewards. It offers a unique opportunity to offset the costs of borrowing while simultaneously earning valuable travel benefits. However, it's essential to carefully consider the terms and conditions of such programs, including interest rates, fees, and eligibility requirements.
Before embarking on this strategy, it is advisable to research and compare different financial institutions and their partnerships with airlines or loyalty programs. Look for lenders that offer competitive interest rates and generous conversion rates. Additionally, consider the repayment terms and ensure that they align with your financial goals and capabilities.
7 Tips for Turning Travel Debt into Flyer Miles - Earn a sign-up bonus even if you can't meet spending requirements
Earning a sign-up bonus is one of the most valuable perks of getting a new travel rewards credit card. These bonuses, which can range from 25,000 to 100,000 points or miles, offer an easy way to jumpstart your balance. But many cards require you to spend several thousand dollars within the first few months to earn the full bonus. For infrequent travelers who can’t organically spend that much, meeting the requirements can seem daunting. However, with some creative techniques, you can often earn a sign-up bonus even if you can’t meet the spending requirements.
One strategy is to use bank account funding to help chip away at your minimum spend. Many issuers allow you to fund a new checking or savings account with your card for a nominal fee. For example, you could fund a new account with $1,000. Just be sure to close the account after meeting requirements to avoid monthly fees.
Manufactured spending is another approach. This involves purchasing third-party gift cards on your new card, then liquidating them to cash or money orders you can use to pay your credit card bill. The key is finding low-cost gift cards with no purchase fees. Be sure to research manufactured spending techniques beforehand, as improper executions could be considered misuse by your issuer.
For big family expenses like insurance premiums or property taxes, consider prepaying a few months early with your new card. As long as there are no prepayment penalties, this can help drive up your spending quickly. Just be sure to have the funds available to repay the card.
Many people have everyday household bills that can also count towards minimum spend, like internet, cable, phone plans, utilities, or streaming services. See if your providers allow credit card payment. Even paying a few months in advance helps accumulate charges rapidly.
Charitable donations are another avenue. Make a tax-deductible gift to your favorite non-profit and put it on your new rewards card. This allows you to give back while also earning points.
Finally, don't underestimate the power of everyday spend on groceries, gas, dining out, and entertainment. Be diligent about putting all these purchases on your new card. Small charges add up faster than you think.
7 Tips for Turning Travel Debt into Flyer Miles - Let issuers know you want to earn miles, not cash back
Many travel credit cards offer flexibility in how cardholders can redeem rewards – either as statement credits, cash back, gift cards, or frequent flyer miles. Savvy travelers know that frequent flyer miles often provide the highest redemption value for premium cabin awards and aspirational trips. However, miles aren’t always the default earning option. You may need to actively select miles over cash back.
For instance, Chase Sapphire Preferred cardholders have the option to earn 2x points on travel and dining purchases. Yet the default redemption value is 1 cent per point towards cash back. To get the fuller value from the Chase Ultimate Rewards program, you need to log in to your account and set your preferences to redeem points for travel. This transfers the points to designated airline and hotel partners at a ratio of 1:1.
Similar dynamics apply to other flexible travel cards like Capital One Venture Rewards and Citi Premier. The points or miles accrued in these programs can be redeemed for travel purchases or transferred to loyalty programs. But you may need to indicate your preferences for miles over cash back.
It’s also possible on co-branded airline credit cards like the Delta SkyMiles Gold American Express. Here, miles are obviously the default earning structure. However, Delta sometimes offers periodic opt-in promotions to earn bonus cash back or statement credits instead of miles on certain purchases. This can be tempting but reduces long-term value. To keep accumulating miles, simply don’t opt into these cash-back promotions when alerted about them.
If you’ve already been earning cash back with a card but want to change to miles, call the issuer directly. Politely explain that you travel frequently and would prefer to earn frequent flyer miles. Often the issuer can retroactively change previous cash-back rewards into an equivalent number of miles. They want to keep you satisfied as a customer.
When possible, avoid cards that exclusively offer cash back, such as the Citi DoubleCash or the Capital One Quicksilver. While these cards earn a high return on everyday non-bonus spend, they don’t offer transferable miles. You’re better served applying for a card that allows flexible redemptions.
7 Tips for Turning Travel Debt into Flyer Miles - Work with issuers on payment plans to keep accounts active
Many issuers understand the challenges travelers faced during the pandemic and are willing to work with cardholders who may be struggling to keep accounts in good standing. Exploring customized payment plans with issuers can help retain valuable travel perks while getting finances back on track. Flexible arrangements allowed Jessica to maintain her premium United credit card when Covid disrupted her business.
As a small business owner, Jessica relied on travels to trade shows and conferences to meet with clients. Her income plummeted when widespread cancellations began in early 2020. While a new credit card payment plan, Jessica kept her United Explorer card and all its advantages. By splitting her minimum payments over six months with 0% interest applied, she avoided account closure or credit damage during challenging times.
Issuers recognize the unprecedented nature of recent hardships. Regular card usage shows commitment traveling lifestyle. In Jessica's case, an extended payment schedule permitted retaining her United seat upgrades and lounge access. This relieved immense stress over potential perk losses.
Contacting issuers shows willingness solve problems cooperatively. During calls, emphasize lengthy history fulfilling obligations with intention resuming normal payments. Suggest temporary accommodations suit all parties. Representatives gauge situations understanding varied by individual.