Adulting

Broke Traveling: Churning and Burning

The struggle is real, fam
Unless your name is Shane Missler and you won the $450 million lottery jackpot earlier this month, your financial situation probably hasn’t drastically improved in the last week. If you are Shane, your boys here would love a bit of seed money.  

In last week’s Broke Traveling: Airline Miles, we enlightened you to the concept of using airline miles for more affordable travel. This week we’re dropping some knowledge on how to leverage bonuses offered by credit card companies to receive “free” airline miles, so you can visit Demi, 22 “wanderlust festival blogger” whom you met on Bumble during your last layover in Denver.

Credit cards are great until they aren’t
95% of the time credit cards fuck you. Hard. Like, years of debt and bad credit, hard. But, if you’re smart, you can shift the paradigm, returning the favor and carefully playing the system to your benefit.

The Millennial wet dream; a big “fuck you” to the machine
How is it done, you ask? Churning and burning. Simply put, churning and burning is the method of applying for a credit card to earn a special bonus and then closing the account after a specific time. This is your chance to reverse the roles and take advantage of the corporations that took advantage of you when you were too broke to get a line of credit over $500.  

Most major credit cards offer lucrative sign-up bonuses to entice the general moron coming in off the street. The bonuses generally offer a lump sum of miles or points in exchange for a minimum spend in a specified time interval. If you’re in control of your finances and know how to manage a credit card these are, essentially free value.

If you’re not good with your finances, do yourself a favor and stop reading. This is not good advice if you’ve already dug yourself an inescapable hole of debt and collections. We will not be held responsible for your shitty choices.

Now that is over with
Right now, Chase is offering a sign-up bonus on their Sapphire Preferred (CSP) Card where you earn 50,000 Ultimate Reward (UR) points after spending $4,000 in the first three months. In reality, this is a minimum of 54,0000 UR points after meeting the minimum spend. Even better, the annual fee is waived for the first year.

Why you care
For those unfamiliar with UR points, they are among the industry’s most valuable for a couple reasons. First, you can use your UR points to book travel directly through Chase’s travel portal. The portal essentially acts as an Expedia-like search engine where points can be used in place of money for transactions. As a CSP cardholder, when you use UR points through the travel portal your points are worth more; 1.25x when redeemed for travel, which means your initial 50,000 points equate to $625 in travel.  This is primarily useful if you’re interested in a cheap economy ticket.

Treat yo self
Another reason UR points are the best in the game is because of Chase’s corporate partnerships with various airlines and hotels. These partnerships allow you to transfer and use your UR points at a rate of 1:1 with partners like United Airlines, British Airways, Korean Air, Southwest Airlines, Hyatt Hotels, and Marriott Hotels. So, if you’re tired of being a plebeian, stuck in economy, this is  your chance to start experiencing the luxuries of flying business or first class. Fancy AF.

Here are a few of examples of places you can go with the CSP sign-up bonus on United Airlines (all one-way from the Continental US):

  • Business Class or First Class to Hawaii for 45,000 miles or 50,000 miles, respectively
  • Business Class to Mexico, the Caribbean or Central America for 30,000 miles
  • Business Class to Northern South America for 35,000 miles

Keep in mind the examples above are only if you transfer your UR points to United’s MileagePlus program, and as each travel program is unique, you should do your homework before transferring miles. As mentioned earlier, transferring is best when you really want to maximize the value of your points and experience luxury flying. The more you use your travel credit cards, the more points you earn, and the faster you make your way to the front of the plane.

Extra Credit
With the CSP, there are opportunities to accumulate points faster when you spend on certain activities. For example, you can earn 2x points per dollar spent on travel (including Ubers, Lyft, subways, metros, planes and more) and dining (typically includes bars, fast food, and restaurants worldwide). So, when you discover Demi has killed all her brain cells with bath salts, at least you got some extra miles to put towards your next adventure.

Sign up benefits, heard. But why close the account?
Two words; annual fees. The CSP we examined earlier comes with a $95 annual fee, which is waived for the first year. So, if you were to open the card, spend $4,000 in the first 90 days, then never use the card again, you would have netted a minimum of $625 in value without spending any of your own money, except for the minimum spend.

The responsibility disclaimer
You are all big girls and boys, but I’m required to remind you that credit cards should be used responsibly. Monitor your credit with tools like Credit Karma or Credit Sesame. If your credit score needs help, work on improving your profile before getting into the world of churning and burning. Churning and burning will influence your credit scores. However, if you maintain good financial habits, the impact will be minimal. 

And, for the last time, this is not intended as financial or legal advice. In simpleton terms:

WE ARE NOT LIABLE FOR YOU BEING AN IDIOT WITH YOUR MONEY AND GETTING INTO DEBT!

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