Advanced Travel Hacking: The Credit Card Blitzkrieg

When it comes to earning frequent flyer miles, there are lots of small things you can do almost every day that add up over time. Last week, I showed you a few simple things I do that bring in around 25,000 miles every year.

But the real fortunes—the big paydays—take a little more careful planning. They’re more work, but they pay off handsomely when they’re well executed.

100,000 new miles in one of your accounts overnight (4 trips across the Atlantic!) is quite a fun thing to wake up to.

This is Part II of a four-part series on frequent flyer strategies. Be sure to read Part I over here, and sign up to our newsletter so you don’t miss the finale

The strategies you can use to find big paydays like these come and go on a regular basis, usually because achieving them means exploiting an unintended rule that’s quickly changed or operating in some other type of administrative gray area.

To be sure, nothing you’ll learn here is illegal. Instead, these are strategies that most people ignore because they’re perceived to be either too hard, too risky, or they just don’t work.

If you’re resourceful, none of those things are true, and you can enjoy a very large frequent flyer mile balance for a relatively small amount of work.

The Credit Card Blitzkrieg

As the credit card industry gets more and more competitive, most major banks seem to be shelling out tremendous bonuses to sign up for their card. The idea is that they’ll lure you in with a big bonus, and then you stick around for a long time and spend all your money with them.

Banks make a lot of money this way and it’s a fair trade. As a frequent flyer though,  there’s an opportunity to use these offers to bring in some very large bonuses for free.

Most people sign up for one credit card—maybe two—and use them exclusively for a long time. The Credit Blitzkrieg, however, involves signing up for many new cards and bringing in as many bonus offers as possible all at once.

The reason people avoid this strategy is because it can cost a lot of money to have many open cards, they fear for their credit score, or it’s too much hassle to manage to keep track of the cards.

All three of these problems can be avoided by signing up for many cards all at once.

Rather than spreading out your credit applications, compile a list of the cards with the best bonuses, and apply for them all at the same time. Take one evening, and do them all in one sitting.

At the time of this writing, the most I’ve ever completed at once was five applications, but there are many stories of successful runs for 10, 12, even 14 cards.

Here are some of the FAQs about this strategy.

There aren’t that many cards available; how do you find them all?

Almost every special credit card promotion applies to both personal cards and business cards, so if you find five good cards, you can usually apply to both and end up with 10 new cards. It can take a little digging to find the matching business card offer, but it’s almost always available.

And no, you don’t usually have to have a real business to apply for a business card.

In most cases, you can use your own name as the business name and everything goes through without a problem.

Only once have I ever had to prove that I had a real business. Luckily, I actually do have one, so there was no problem, but to be asked is rather uncommon.

How can you possibly get approved for so many cards?

Good question! If you apply for credit cards like a normal person would—slowly over time—there’s an automated system that does a good job of screening you. But if you apply all at once, you can effectively jam the system.

The way most application systems work is by looking for a few key pieces of information like gross income (income before taxes, fees, etc.) and whether you’ve recently applied for other cards with that specific bank, and then either approve your application or send it to manual review.

If you meet the “bypass requirements” on each application, you’re typically approved instantly, and little else takes place. And even if you’re denied for a card, a phone call to the issuing bank seems to end up in a reversal about 50% of the time.

Sidenote: Through a little personal experimentation and data gathering from friends, I’ve found the annual income required to trigger an automatic approval is most likely somewhere around $45,000.

To be clear, I don’t endorse lying to get credit—that’s illegal (I think?). But knowledge is power. Use it wisely.

What about all the annual fees?

This one is actually very simple. Most new credit card offers are great: big bonuses, no fee for the first year, and no commitment!

After collecting the bonus, I usually keep the card around for the year—just in case—and then call to either convert it to a free card or cancel the account.

This is actually simpler when you blitzkrieg than when you accumulate cards over time because all of your card “anniversaries”—the time when the annual fee comes due—fall near the same date.

Just pick a date that’s a week or two before the first fee comes due, and call them all at once. I keep a spreadsheet for all of my currently active cards and use Google Calendar to set up reminders so that I don’t forget to call to cancel.

Fair warning: You may need a stiff drink after talking to credit card customer service agents all afternoon.

Won’t my credit score take a plunge?

Full disclosure: I am not a credit score expert—no one really is—and I do not claim to fully grasp how each little thing you do affects your credit score. Also, everyone’s credit profile is a little different, so certain things may affect some differently than others.

What I can say with certainty though, is that after two credit blitzkriegs and about 10 new credit cards, my score has actually increased around 20 points (I watch it closely). This story is similar to most people I’ve talked to who prefer to blitzkrieg over slowly accumulating cards.

A 20 point jump isn’t normal, but I’ve yet to meet anyone who’s score has been affected negatively.

When you do a credit blitzkrieg, you’re basically affecting four pieces of your credit score. Here’s what they are so that you can consider them for your own situation.

• Number of accounts: When you sign up, this number goes up. As far as I can tell, number of accounts doesn’t mean much unless you have too few or far, far too many. 10-15 revolving accounts (credit cards) don’t seem to cause any concern.

• Average age of accounts: A credit blitzkrieg brings the average age of your accounts way down. This is supposed to be very bad for your score, but I’ve never experienced a dip caused by it. This may be because I have several very old cards that are effectively “anchoring” my account, and keeping any new ones from lowering the age too much to cause a dip.

• Credit utilization ratio: The more credit you have available to you and the less of it you use, the better you appear to be at managing temptation, so your score goes up. When you get a lot new credit cards, but don’t spend any more than usual, your credit utilization goes way down. This is good! Of course, when you cancel the cards, it goes back up. Easy come, easy go. Most “experts” agree, though, that once your utilization ratio is under 10%, it won’t improve your score any more. So if you have a good ratio already, it doesn’t really matter.

• Hard credit pulls: This is where the big hits are really supposed to come. Supposedly, each time you apply for credit, the bank will pull a full copy of your credit report. Each time this happens, it’s supposed to lower your score about 5 points for around 6 months, and a hard pull stays on your report for 2 years. That said, in the last two years, I’ve applied for around 15 cards, received 14, and only had two hard pulls made on my credit report—the same number of applications that were reviewed manually. My deductive reasoning skills tell me that if you’re instantly approved, most banks never bother to do a hard pull.

By this point, you’re either convinced or you aren’t. Keep reading to learn how to jump over the final hurdle before raking in giant piles of frequent flyer miles.

Meeting the Troublesome “Minimum Spending Requirements”

Once you’ve finished your big credit blitzkrieg, and there’s a pile of new cards sitting in front of you, the next thing you realize is that you’re not quite done yet.

The final hurdle between you and your miles is typically a big “minimum-spending requirement.” Before you’ll be awarded the miles you signed up for, you have to spend a certain amount of money—$2,000 over 3 months is typical, but rules vary greatly.

If you’re a big spender anyway, then this is no problem—continue about your business. But for the rest of us who struggle to meet the requirements—I rarely spend more than $1,000 per month regardless of what I earn—we need a strategy to make sure we didn’t get those cards for nothing.

This used to be easy—you’d buy a bunch of coins from the U.S. Mint, deposit them back into your checking account, and be done with it. But that gravy train is gone, so it’s a little more complicated now.

Luckily, there are still a few low or no cost things you can do to temporarily pump up your spending to meet these requirements.

First, though, it’s best to sit down and look at just how much you need to spend, how fast, and on which cards. This will let you know which cards to prioritize so that you don’t miss a deadline.

Strategy #1: Purchasing Gift Cards/ Pre-Payments

One way to quickly meet a big spending requirement is to look at where you already spend money, and attempt to lock in future spending by purchasing gift cards to the stores you shop at regularly, or making pre-payments for any services you receive.

Common places to look for these opportunities are:

• Utility bills like water or electricity
• Fuel for your car
• Groceries
• Any other pre-paid service

When you pre-pay for something or buy a gift card to a store you shop at regularly you’re basically trading the utility of your money for frequent flyer miles. You’ll have to spend the gift cards in those places, but you won’t pay anything extra or have to do any extra work.

On the other hand, if you’re not keen on paying in advance, there are ways to buy gift cards and convert them back into cash via gift card marketplaces like Big Crumbs, but this requires more work, sometimes a lot.

Important note: There are no credit cards I know of that will allow you to buy cash-equivalent gift cards like Visa or American Express pre-paid cards, and earn points for them.

Strategy #2: Creative and Slightly Questionable Money Laundering

If you’re creative and don’t mind living a little on the edge, there are some ways to essentially use your credit card to pay yourself. This usually involves setting up multiple payment accounts (there are many of them. Think Paypal, Amazon, Square), and partnering with a trusted friend, or better, a group of friends (can you say cartel?) to send payments around in circles that eventually end up back to you.

The trick is in finding a processor that won’t charge a fee for credit transactions.

It’s not illegal (unless you’re a drug dealer), but it is against every programs terms of service. So if you get caught or even look overly suspicious, your account will be closed and you’ll probably never be invited back to the party.

Unfortunately, I can’t give very detailed instructions here because the rules and tactics are constantly changing—it’s a game of cat and mouse between frequent flyers and internet security teams—and I have accounts with many of these processors that I use to run my business, so I’d prefer to stay on their good side!

Hopefully you understand. What I can say is that if you spend an hour on Google refining your search, you’ll find something that works.

The best advice I can give is to pursue this carefully, separate transactions as much as possible, and fly well beneath the radar with small transactions. Or, just don’t do it!

The Bottom Line: Sometimes the Adventure is in Pursuing the Adventure

I love traveling and getting to know new places, but the reason I’m drawn to frequent flyer miles for getting there is that pursuing them requires its own fun challenge.

You can take the easy way and save up a few miles here or there. In a few years, you can go somewhere really fun. If you want to go sooner than that, you have to find workarounds like these credit blitkriegs.

And massive bonuses usually require a massive action. It’s never truly free; your effort is required.

The good news is that the more difficult a task becomes, the less competition to achieve it. If you find this kind of problem solving fun, then it can be a great adventure in and of itself.

Happy mile hunting!

Have a question about these strategies? Ask in the comments below, and I’ll answer the best I can.

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Image by: Josh Kenzer