In November, blogger Hilary Stockton laid out her plans for earning a million miles in credit card rewards in a year without leaving the ground. As blogs go, it was an extraordinary tour de force, made even more compelling by her opening paragraph, which described her and her family's first- and business-class flights to Bali and Hong Kong aboard Cathay Pacific airplanes.
Rewards credit cards and gaming the system
Within a year, Hilary seemed to imply, you could be enjoying the salmon and caviar in-flight platter pictured on her blog -- if you follow her "mileage running" strategy. And it seems likely you could -- but only if you're an unusual sort of person. Here are some of the characteristics you would need to hit her million-mile target:
- You'd have to have a spare $200,000 lying around, and be prepared to invest it with BankDirect. That's where 240,000 of your miles would come from. In return, Hilary said, you'd get only a modest interest rate, and would be charged $12 a month in account fees. Still, could be worth it.
- You'd need a really great credit score. You're going to be applying for 11 cards, most with with sign-up bonuses, and some of them are very high-end indeed.
- You'd have to be prepared to see that credit score fall. All those card applications are likely to reduce it significantly, so you certainly -- as Hilary warns -- wouldn't want to follow this strategy if there were any possibility of your wanting to make a mortgage, refinancing or any other loan application anytime soon.
- You'd need to spend a total $29,000 across some of the cards within months of acquiring them in order to qualify for your sign-up bonuses.
- You'd have to be willing to pay more than $1,000 in annual and other fees during the year.
- You'd need to be ready to micro-manage your accounts, including transferring some of your rewards onto gift cards.
- You'd have to remember to cancel many of the cards before their annual fees, which are waived for the first 12 months, kick in at the start of year two.
Rewards credit cards without that effort
Now, maybe you are prepared to jump through those hoops, and have the resources to do so. Perhaps you regard following Hilary's strategy as a hobby; one that could provide you with a good return on the time you invest. Good for you.