Mapping Out the First Three Years of Applications, Year 1
The other day I was dreaming about the good old days of no rules and millions of miles! I was daydreaming about how easy things used to be. Then I started thinking about what it would be like to enter the hobby today. I decided to give it a try!
This won’t be a 100% starter guide since I will be using the knowledge I already have to maximize my return. But I am not planning on going as hard with the applications as I normally would.
I think of this as a fun, thought provoking exercise that may help out new people in the hobby as well. Join in on the fun with me in the comments section and let me know how you would lay out your first year if you were starting from scratch.
Ground Rules
I am making some assumptions here. There is the assumption that I have some kind of small business, reselling on eBay etc. I am also going to base my decisions somewhat on my personal situation. Another assumption is that I have a good credit score in the 700’s and I am able to properly manage my credit and pay off my statements in full. Lastly, I am going to assume that I have had 0 credit inquiries in the past 24 months.
This will not be a one size fits all answer, since everyone has different situations and needs. The decisions I make will be determined by the goals I set forth.
Every year you should lay out your goals for the next 18-24 months so you have an idea of what kind of miles and points you need to collect. There is no point in getting 75,000 Delta Skymiles because it is an all time high offer if you can not use them.
Goals
My goals for this exercise will be as follows:
- Earn a Companion Pass – this is the most valuable perk in the travel industry in my opinion.
- Focus on staying under Chase’s 5/24 rule for 2 years.
- Maintain the Companion Pass for 4 years.
- Get a mix of other airline miles for a trip to Europe since Southwest is limited with international travel.
- Stockpile points for Hyatt and SPG/Marriott hotel stays. These are two of the better hotel programs and with the addition of Marriott they cover almost anywhere you go.
First Year of Applications
THESE OFFERS MAY HAVE ENDED
Now that I have laid out the ground rules and goals let’s get to the good stuff! Here is a list of the cards I would get in the first year with their sign up bonus info. I will list the card name and the time of year I would apply for it:
- Southwest Plus – January 2018
- This card currently comes with a signup bonus of 50,000 Rapid Rewards points after $2000 in spend within the first 3 months. It has an annual fee of $69.
- Southwest Business Card – April 2018
- The card currently comes with a signup bonus of 60,000 Rapid Rewards points after $3,000 in spend within the first 3 months. It comes with a $99 annual fee.
- SPG Personal Card – July 2018
- Earn 25,000 SPG points after $3,000 in spend within 3 months. The $95 annual fee is waived the first year.
- American Express Personal Platinum – October 2018
- I would only get this card if the 100,000 Membership Rewards point offer was available. I am slotting it here but it is a take it whenever you can get it type of offer. The annual fee is $695. For that annual fee I would get $400 in airline incidentals the first cardmember year and $200 in Uber credits.
This would put my 5/24 count at 3 for the year. It would be 3 instead of 4 because most business cards do not count towards 5/24 status, including Chase’s own business cards. With 3 personal cards and 1 business cards in 2018 I use up 3 valuable slots.
Why I Chose These Cards & In This Order
Southwest Plus
To get the Companion Pass (CP) from Southwest you need to earn 110,000 Rapid Rewards points in the same calendar year. Once that is achieved you get the CP for the remainder of that calendar year and for the following calendar year. Sign up bonuses happen to count towards the 110,000 point threshold. This would net me 52,000 miles when the minimum spend is complete, or 47% of the way to my goal.
I started with the personal card instead of the business card because I wanted to get the clock started on the 5/24 countdown. This will allow me to get the card again in early 2020 when it drops off of the 5/24 count. This wouldn’t occur if I went with the business version first. And I chose the Plus version over the Premier version because they have the same bonus but the Plus comes with a lower annual fee.
Southwest Business Card
The Southwest Business card would get me the rest of the way to my companion pass. After completing the $3,000 in minimum spend I would earn a total of 63,000 Rapid Rewards miles. This would put my total at 115,000 Rapids Rewards points worth over $1700. The sign up bonus would also earn me a companion pass for the rest of 2018 and all of 2019!
I could combine this application with the personal Southwest card, in January, with the hope that Chase would combine the hard pull. I decided not to because Chase has been cracking down some on double applications, so it wasn’t worth it to me.
SPG Personal Card
I went with the personal version of the SPG card because the rumor is that it will be phased out sometime in 2018. The business version is rumored to be sticking around longer so I would put that off until 2019.
SPG points are valuable for hotel stays or airline transfers. Many believe that it is the most valuable Hotel Card offered.
Most importantly this would give me a break from Chase. Chase is starting to crack down on multiple applications over a short period of time.
Hopefully the offer would be increased to 30 or 35,000 SPG points by this time too.
You can compare this to other hotel cards here!
American Express Personal Platinum
The 100,000 Membership Rewards American Express Platinum offer is a take it whenever you can get it type of offer. I slotted it here but if it became available earlier I would jump on it then. If I was unable to get the 100k offer during the first year I would slot one of the cards from year two here instead.
100,000 point sign up bonus offers are very rare these days. That amount of Membership Rewards points would be very valuable for international travel. These points would get me to places Southwest Airlines does not go.
The flexibility of MR points, along with the large bonus, make this a no brainer. The perks you get with the card are valuable and plentiful too.
Results
After completing the minimum spend on these particular cards I would have earned the following:
- 115,000 Rapid Rewards points worth $1725
- The Companion Pass
- 30,000 SPG points worth $600
- 103,000 Membership Rewards points worth $1650
- $400 in airline incidentals
- $200 in Uber credits
- Priority Pass membership
- Centurion lounge access
- Delta lounge access
I would have paid the following annual fees:
- $69 Southwest Plus card
- $99 Southwest Business card
- $695 American Express Platinum Card
That is a pretty substantial discount on your travel for the first year.
Conclusion
After the first year I gathered a large amount of valuable points, kept my 5/24 count manageable, and gained a lot of the best perks in the travel industry. I am still on pace to accomplish all of my goals over the final 2 years of the exercise.
Let me know in the comments section what you would do differently. What would your first year look like? Would you burn up your Chase 5/24 spots right away or would you try to double down on the Companion Pass?
Hope you enjoyed the article and I hope to see you next week for Year 2!
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At the end of the first year would you close any of the cards? Why or why not?
Thanks
I would definitely close the SW cards since I want to get them again in year 3 and I don’t think they are worth putting spend on since they only earn 1 point per dollar.
The Personal Platinum I may consider keeping if I was getting enough value out of it or if they offered me a retention offer. But most likely I would close it and get another version (Mercedes Benz, Ameriprise etc.) of the Platinum card down the road.
I would also close the personal SPG since I would be getting the SPG business version in year 2 and that is the better card worth keeping since it comes with lounge access too.
To be transparent, I’m a credit card noob. I’ve never had one. I found your blog, trying to figure out how to game the system. Based off what I’ve learned thus far, it’s very difficult. What prompted me to comment was your presentation on how to get the Companion Pass. Have you read the fine print on how to get the CP? I’m not sure where you read that “Sign up bonuses happen to count towards the 110,000 point threshold.” I wasn’t able to verify that on Southwest’s site. What I kept getting stuck on was where Southwest said you needed 110,000 “QUALIFYING” points. So my question was, “What is a QUALIFYING point, Southwest?”
After reading the fine print here, I’m wondering if there’s a hole in your plan. It says “Purchased points, points transferred between Members, points converted from hotel and car loyalty programs, and e-Rewards, e-Miles, Valued Opinions, and Diners Club, points earned from Rapid Rewards program enrollment, tier bonus points, flight bonus points, and Partner bonus points (excluding bonus points earned on the Rapid Rewards Credit Cards from Chase) do not qualify as Companion Pass qualifying points.” So according to that, points earned from program enrollment don’t count toward the 110,000 points you need to get a CP.
https://www.southwest.com/rapidrewards/tiers-more-companion-pass
Mikayla credit card bonuses, as well as credit card spend, counts towards the companion pass. I have done it myself personally as well as hundreds of thousands of others. You don’t need to worry about that. Points earned from their shopping portal and dining program also count towards the companion pass. Hotel transfers used to work but they ended that at the beginning of 2017.
Welcome to the hobby and let me know if you have any other questions.
Sorry for my delayed reply. I’m sorry, I’m still a bit unclear. Can you elaborate a bit on this? Reading the fine print, it sounds to me like the 50k points I would receive for enrolling in SW Plus and the 60k points I would receive for enrolling in SW Business wouldn’t count. I would think both amounts (50k & 60k) would be considered points earned from Rapid Rewards program enrollment. If you are saying it has worked for others, I’m would definitely like to apply. But was hoping you could provide clarity before I do so.
Also if I close my card to avoid the annual fee, would I somehow forfeit the CP? I would think SW would want you to keep your account open to take advantage of the benefit. Thanks.
The terms you are reading are probably the points you get for signing up for the Rapid Rewards frequent flyer account.
Yes the card earnings will count towards the Companion Pass – 100% certain. Will it change in a year or two? Maybe but it works now and has for years.
If you closed the card you would keep your points and your CP. You just need to earn or redeem some before their expiration date to keep them going.
The CP is issued by Southwest….Chase has nothing to do with it.
If you were going to apply and wanted to use our links for the card you can find them under travel rewards cards here….https://milestomemories.boardingarea.com/resources/
Just click chase on the lower left side after you click Travel Rewards cards.
Thanks in advance if you decide to use them. Let me know if you have any more questions.
[…] In order to get a better idea of how I set up this thought exercise, the ground rules I set forth, as well as my goals you should read the Year 1 Entry. […]
[…] taking a look back at how I would handle applications if I was just starting out now with my Clean Slate Series. And while thinking about that I started thinking about other things I wish I would have done […]
[…] excellent thought exercise, which I am a huge fan of, but probably not the most practical. A great read non the […]
I am following a similar strategy with my wife’s cards. I am way over 5/24 but she is not. She picked up the southwest cards last spring and we are enjoying the companion pass for the second year. We are getting so much value from it. We adjusted our travel plans to maximize its use for the 2 years, Southwest has plenty of great destinations. I am looking forward to your strategy for retaining the companion pass.
I had her get the Amex Business Gold instead of a platinum even though it has a smaller bonus but also a much smaller fee. It also keeps a slot open in her 5/24 count. The spend is hefty to earn the bonus. She owns a small business but she does not have a lot of big expenses other than taxes as it is a service business.
We also prefer Hilton over the Marriot program and are excited about the new cards coming that way this week.
Sounds like you have a solid strategy going forward. The new Hilton cards will be very interesting. I am especially excited that they will finally be adding a business card to the lineup! Thanks for the comment.
[…] Clean Slate Series: Year 1, What Would I Do if I Were Starting Out Now? […]
My thoughts. I disagree with the Companion Pass suggestion as this only works well if you have a significant other/children. For single folks like me it is of no value. The AmEx Platinum is less valuable if the person does not live in a large city (NY, LA, SF) so one is more likely to drive a car and not Uber as often to make the credit worthwhile.
As a single person, any thoughts on which offers to go after? Thanks.
Cynthia – that depends on your goals mainly and which airline is most convenient for. Once you figure those things out then you can take a look at what is best for earning those types of points.
But the Chase Sapphire Reserve and a Chase Freedom are a pretty good combo for most to have and start out with. The Amex Everyday Preferred is also a great card that covers a lot of high spend areas if you wanted to earn Membership Rewards instead. A lot will depend on your spending habits as well. Do you spend more on groceries or more on dining out etc.
Hope this helps some – thanks
Carol if you travel with friends or family much then it is still of use. Only wouldn’t be useful if you are mostly traveling alone. Remember you can change the Companion 3 times per YEAR…so 6 times while you have it. It still has value but something else may be of better use.
For Uber if you have Uber Eats in your area you can use the credit very easily that way. Even if you only use the credit for $50 for the year when you travel etc. you still get $400 in airline incidentals (worth a cash value of $360). So that $410 in rebates for a $550 annual fee. Plus you get $1500 plus in points and all of the other perks that come along with it. $1500 in travel for a cost of $140 out of pocket plus multiple lounges available to you – a win in my book every time! The 100k offer is probably the most lucrative personal card offer on the market.
[…] Clean Slate Series: Year 1, What Would I Do if I Were Starting Out Now? by Miles to Memories – A good post for those starting out now with a road map on what to watch out for and which credit cards to get first. There’s definitely no set path here that will the be the absolute best for everyone. […]
I would say that the most important thing to do first is to get some base cards that you can and will continue to use for regular spend indefinitely. Get a 3x travel card – either the ThankYou Premier or the Sapphire Reserve, or better yet, get both since they each have good other benefits. Get a grocery card – perhaps the Amex Everyday Preferred (4.5x assuming 30 charges a month). Get a card that treats you well on non-bonused spend, such as the Amex Everyday Preferred, the Freedom Unlimited, that Blue card offering 2 points on all spend, the Barclay Arrival Plus, etc. You probably got a 3x gas card by default (Everyday Preferred or ThankYou Premier both do this), but if not, get one of those.
You have now used up from 2 to 4 of your 5/24 slots, so choose wisely here: look at Chase carefully and see if there is anything you want from them that you crave. The Southwest cards are a great example, for the reasons you mentioned. Or perhaps you want the Marriott card, or the Freedom, or one (or both) of the available Chas Ink cards. Whatever it is you want most from Chase, get it. If you want one (or both) Inks or the Southwest Business (or any other business card!), consider getting that first so that you still have slots available to get the personal cards… but, on the other hand, if one of the personal cards is what you want most, then get it now, while you can.
Once you have crossed the 5/24 threshold, or once you have gotten all the Chase cards you think you want for now, then start looking at other banks to see what you want next. Certainly, getting the Starwood card now would be a good idea if you think you will ever want it, as it might disappear. Aside from that, focus first on cards that will enhance your rewards on your regular spending until you have tweaked to your satisfaction and found the best cards for you.
Don’t start chasing the cards whose primary value is the bonus until you’ve got a solid foundation. That’s my advice.
Jenny thank for the comment. I would have to disagree with you some. I would focus on the bonuses first and maximizing Chase because of the Chase 5/24 rules.
Now if you said you would rather get the EDP instead of the SPG, then that would be a personal choice and I can’t argue with you there…it is maybe the best all around card out there. I slotted the SPG there because it won’t be possible to get it in the future. I am going to value something that is a one time only offer over something that is around whenever I want it…but that is me.
The 100k Plat offer is probably the most valuable personal card offer out there. And I think that everyone should be trying to get it non stop until they can actually get it. But if you could not get the offer to show then I could see someone sliding in the CSR there etc.
Thanks for the great comment! I hope to see you next week too.
Interesting post. I have a huge arsenal of cards but my freinds always ask me that they should get card wise. I dont fly Southwest however. I can see some great value in this plan assuming the person can use the SWA flights.
Robert – thanks for the comment. Yeah the first year would be different if you don’t value/fly southwest. It would probably look more like my second year in the exercise would. Hope to see you next week!
Thanks again!
hope you can clarify how I would stay under 5/24? example i open 5 chase in 2017 plus 4 others non chase. does that mean if i want to stsrt over again with Chase i need to wait until my credit is clear for 24 months before i can go again?
Yes for certain cards that is the case. CSR, CSP, the Southwest cards, Ink Preferred Plus and Cash, the Freedom cards etc. you need to be under 5/24 to be able to get them.
The way to stay under it but still get sign up bonuses is to sign up for business cards, many of which Chase does not count towards 5/24.
I see one glaring omission in your assumptions. One needs a decent credit score in order to even apply for credit cards. As a child that is helping two older parents with a lifelong aversion to credit cards, one must build a credit score up if it isn’t sufficient.
Please note this is a go/no go requirement.
That is true. I will add that in – thanks Michael!
Just so I understand this right – if you open up a Southwest card and a business card in the same year – then you have a free companion pass for the rest of that year and all of the next year ? And I reading that right ?
Yes once you earn 110,000 Rapid Rewards points you get the companion pass for the remainder of the year you earned it in plus the next year. So if you got both of those cards at their current bonus levels and completed the minimum spend you would earn it for the rest of 2018 and all of 2019.
I think I have read more than my brain can stand these last few weeks! Ha! I absolutely LOVE it!
I just started 2 weeks ago. I went with the CSR as my first card. I don’t have a solid domestic travel partner and my goals are mostly international. Otherwise, the Southwest deal would have been great!
I applied for the Chase Freedom the day after the Reserve and got a “review” status. :-/
If this doesn’t go through should I hold out for the Amex Platinum or go for the SPG?
I have had the Amex Delta Gold for years but that is the only other card I have.
I will likely dip into manufactured spending too.
I would check and see if you could get the 100K Platinum offer from Amex using incognito mode. If you can’t get it to show up then I would get the SPG personal card before it goes away for good.
How can I do that??
Go into incognito mode on Chrome or Safari etc. and then go to American Express’ website. When you are in incognito mode a lot of the time increased offers will appear. I would try it 5-10 times on each browser you use to see if you can get it to come up.
You can get some more detail here:
https://milestomemories.boardingarea.com/amex-credit-card-offers-incognito-2017/
Did you choose the Amex platinum over the CSR solely for the purpose of keeping Chase app count low?
Also, would you recommend keeping the SPG card long term?
On SPG if you have a lot of non bonused spend I would say it is a long term keeper but I think the business card is better with the Sheraton lounge access that comes with it.
I did it to space out Chase apps. They have been shutting people down for too many apps with them so I thought it better to keep them to around 2 per year.