Rewards credit cards and gaming the systemWithin 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.