In an earlier post I briefly touched upon getting miles from credit card bonuses. This has been something that many people have asked about.
Banks make money off credit cards through annual fees, transaction fees they charge to merchants, and off interest they charge to people that keep a balance on their credit cards. This concept is pretty straightforward and easy to grasp. There is nothing too complex about credit cards, however how are banks supposed to win over customers when they’re all basically offering the same product. The is to provide benefits for having a credit card with a certain bank.
Various credit cards offer various benefits ranging from lounge access to primary car insurance. For now we’ll just focus on the miles. For the most part every airline branded card offered by a bank will award you 1 mile for every $1 you spend on the credit card. These cards may also come with benefits such as free checked bags and priority boarding which are always helpful. I generally try to put all my spending on credit cards to maximize my return, even if it’s a $0.50 item whip out that credit card and pay for it to get the miles. (Tip: If you don’t pay off your credit card in full at the end of every month this isn’t for you. The money you pay in interest negates the value of the miles).
Now some of you may be thinking about how you may not be able to spend so much money when some award tickets cost upwards of 30,000 miles each way. That’s why a lot of these cards come with bonuses for signing up and spending a certain amount within a set time frame. Lets say for example you see a credit card offer for American Airlines, it may say that you’ll receive 30,000 bonus miles if you spend $1,000 within 3 months of account opening.
These are usually one time deals, if you miss it or don’t spend enough in the set bonus time frame you’ve missed out on the deal. Also for the most part you can’t cancel a card and reapply for it and get the sign up bonus again. Many banks are enforcing sign up bonus limits to one per person per product. So remember not to miss out on the sign up bonuses!