What if I told you that you could go on a three and a half week vacation for less than $100 a day?
That you'd visit three continents, stay in the most luxurious hotels, fly in premium seats, and pay less than a first class ticket from JFK to Tokyo*?
Too good to be true? Not at all.
My friend Michael and his wife did just that.
For about $3,400, they visited Hawaii, Tokyo, the Philippines, and even slipped in a safari in South Africa and time in Cape Town.
I didn't believe it either… until he told me what he was up to.
This was 7 months ago and my life looked a lot different than it does today.
I was living in Hong Kong, working as an accountant in the finance department for an engine manufacturing company.
While I liked my job, what I really relished was one major bonus it offered — the opportunity to travel the world.
On a fairly regular basis, I'd jet off to Australia, the USA and Mexico to do internal audits at our overseas locations — and I always made sure to extend my stay in order to explore new cities. Although I was bringing in about $50,000, who was I to turn down a free trip?
So when I decided to go back to school full-time to get my M.B.A. a couple months later, I was sad to give up these travel perks, and decided to reach out to my friend Mike to inquire everything he's be up to.
That's when I stumbled on a blog about the creative ways you can redeem credit card rewards for amazing travel experiences.
Through what he told me, I learned that racking up credit card points to score free airfare and hotel stays was actually quite easy, thanks to a strategy called "churning."
Put simply, churning is when you apply for multiple credit cards in order to capitalize on their lucrative sign-up incentives, which issuers give you in return for meeting a certain spending requirement.
When done right, you can bank hundreds of thousands in rewards points — but there's a catch.
Churning is only a financially sound strategy if you're able to meet the spending minimums without blowing your budget, and you can pay off your balance in full every month. Otherwise, the interest you'll pay will overshadow any benefits.
This was the first I'd ever heard of churning, but the concept didn't seem so outlandish. After all, I was no stranger to using credit cards for unconventional purposes.
When it came to churning, however, the question mark was how the process would affect my FICO score. But when I investigated further, and couldn't find information to suggest it would endanger my good standing — my score was in the high 600s, and I didn't have any debt — I decided to start slowly and keep close tabs on my credit. If I dinged my score in any way, however, I'd stop.
It was around that time that I started dating my future wife, Emily, a project manager at a cleaning supplies company. She'd grown up in a middle-class family, and road-tripping to amusement parks passed as a vacation — so I knew travel was a priority for her too.
But Emily was hesitant when I first explained the idea to her. She didn't want her new boyfriend's crazy idea to tank her credit, which was also in the high 600s.
So I embarked on the process myself, at first just aiming to earn enough points to cash in for a short, weekend trip to Bangkok— which I was able to do quickly.
That's all it took for Emily to decide she wanted to try her hand at churning, so we could pool our resources and go on even bigger trips. We were excited to see where the journey would take us.
My approach was to open three or four credit cards at a time, every three months. The theory was that if I spaced out the credit inquiries, I'd further mitigate any potential hits to my credit.
When I first started accumulating travel rewards points, a typical offer was that you'd get 25,000 points in exchange for charging $500 to $1,000 within three months. These days it's not uncommon to get 50,000 points for spending $3,000 within that same window of time.
Some cards gave me specific airline miles — for instance, I eventually accumulated enough to earn Singapore Airlines' gold status, which gives me priority boarding and check-in, better seats, and more miles on paid flights — while others just gave me generic points to redeem at a variety of hotels and airlines.
I also regularly browsed for information on how to score extra points for dining and shopping, which you can do by making purchases through credit card issuers' online shopping portals. And Emily and I made sure to charge every expense possible — from groceries to utility bills — to rack up more rewards.
I typically kept each card open for a minimum of 10 months before I called up the credit issuer to ask for a retention bonus. If I got it — or some other benefit that was worth more than the annual fee — I'd hang onto the card.
For instance, one of my cards gives me a free one-night stay at a specific hotel chain anywhere in the world each year — which is definitely worth the $49 annual fee!
Of course, we were extremely careful to pay off our balances in full, and I diligently tracked both Emily's and my credit score, using a free identify-theft monitoring service. Our scores actually climbed into the 700s, thanks to our diligence in remaining consumer-debt-free and making on-time payments.
After a couple years of building up our balances, we finally put our points to good use — in a big way.
After Emily quit her job in anticipation of our move to Kansas for my new, post-grad-school gig as a brand manager at Colgate-Palmolive, we redeemed about 150,000 points and miles to take a monthlong trip across Europe.
We flew coach into Portugal, working our way east through nine other countries. We spent nothing on airfare and very little on accommodations, which included a stay at a high-end hotel right next to the opera house in Bristol, England. The only money we had to shell out was less than $100 in airline fees, plus train tickets and meals.
As we watched our points balances grow, we started plotting even more trips. We took a lavish, $32,000 honeymoon to Paris — for just $2,000 cash. That got us first-class airfare, plus a week's stay at the Park Hyatt in the center of the city.
Just a few years later, we decided to take a second honeymoon to Bora Bora. The cost if we didn't have points and miles? $30,000. What we shelled out: $2,000.
We loved hearing this story so much and thank the Como family for all their advice, we decided to send his wife Nicole a gift from us!