How to fly around the world for next to nothing!
Also, if you have any interest in getting any kind of significant loan within the next 1-2 year period, I would recommend not doing this. This is great for RTW travelers because we certainly aren't going to be taking out loans anytime soon.
This thread is referring to the accrual of airline miles through various means. The main method is through the churning of Citi American Airlines AAdvantage cards, both Mastercard and AMEX.
For those not familiar with credit card churning, this is signing up for credit cards simply for the signup bonus and then canceling them once said bonus posts to your miles account. Currently, nearly all cards that offer these sorts of bonuses have something in their terms where you can only get the bonus once per person or once per year. Citibank, for whatever reason, does not have this stipulation and allows you to get 2 personal cards every 60-65 days. (the official limit is 2 every 60 days, but most wait 65 from signup dates just to be sure)
The current offer that is going on is 30,000 miles per card for spending $750 within 4 months of account opening. The 30k offer is set to expire on August 31st and if it is not extended then it will revert back to the standard 25k miles per card. From past experience, others have said that as long as the link is still valid then you can still sign up past the expiration date and receive the full bonus.
Ok, so if you aren't doing the math yet let me do it for you. If you can sign up for 2 cards at 30,750 miles each (it's at least 750 miles more because you also get 1 point for every dollar spent!) every 60 days, that comes out to over 300,000 miles per year per person...and this is just using churning of Citi cards!
For my RTW trip, I was planning on setting aside at least $4000 dollars for all the main flights. When I worked out all these flights using American Airlines miles, it added up to around 120,000 miles. This could be attained in only 120 days, and I'm already past that point as we speak.
Also, there is no need to worry about your credit, because all of these inquiries will drop off your report automatically after 2 years, but most of the impact of them is removed after only 6 months. I've done extensive research on this, and this will have either absolutely no impact in the longrun or it could actually cause your score go up as long as you pay everything on time and don't max out the cards. Basically you just have to be responsible.
So what you do to begin is go to the American Airlines website and sign up for their frequent flyer account that they call AAdvantage.
Next, you go to this site:
There you will sign up for both the Mastercard and the Citi card, preferably one right after the other. Hopefully you are instantly approved. Usually when signing up for one right after the other, your credit report will only have 1 inquiry reported instead of 2.
Ok, so you've signed up and now you are thinking, man how am I going to spend $1500 in the next 60 days so that I can sign up for more cards and get more miles? This is where the US Mint comes into play. Due to the fact that they are trying to phase out the paper dollar and replace it with the dollar coin, the US Mint is currently offering to directly ship you $1 coins in increments of $250 with absolutely NO FEES and FREE SHIPPING. So you go to this site:
http://catalog.usmint.gov/webapp/wcs/st ... ifier=8100
From there you order 3 boxes of the Native American Coins (these have a limit of 99 boxes per order currently) per card. The mint ships you your coins free of charge and now you have $1500 worth of coins that you can take directly to your bank for deposit. Pay off the card with your balance and you've just earned 60k miles for nothing but a small temporary hit to your credit report.
Also, it just so happens that American Airlines recently began offering one way fares for half the price of a roudtrip. Pretty much no other airline does this, and this is pretty amazing for people wanting to take a trip RTW. So you have fares like 20k one way to Europe from the US, 20k to Central America from the US, 20k to South America from the US, 20-25k to Tokyo from the US and so on. These are the cheapest fares, but American has very good award availability, and our trips aren't bound to flying on specific days or even specific weeks, so these fares will be much easier for us to find. American also has extensive partner airlines that cover most major destinations in the world.
Another way to earn miles is through opening an account with Fidelity Investments. You can get 25k for depositing 50,000 dollars. The trick is, you can deposit, withdraw, deposit, withdraw using the same money to add up to $50,000 and still earn your 25k miles. You just have to do it within 90 days from account opening. You'll need to sign up using this link:
https://scs.fidelity.com/other/offers/r ... _aa2.shtml
There are also numerous other checking accounts you can sign up for that will give you miles for signing up and using direct deposit, or for just letting money sit in the acct.
Here is a link that explains many of these:
That's all I can think of at the moment. Both my girlfriend and I are currently doing this, and we will both soon have over the amount predicted we will need for every major flight on our RTW trip. By the time we leave early next year, we'll have almost double what I think we'll need. Hopefully some of you find this helpful, I was personally blown away when I started putting all this together and adding everything up and just had to share it with fellow travelers.
I'd rather just save my money and fund my RTW trip the conventional way without tampering with my credit score and trying to backdoor the system.
Sounds like you put a lot of thought into it; best of luck pulling this off.
As to the credit issues, again as I've said above, this will have absolutely NO IMPACT in the long term on my credit score except for possibly bumping it a bit higher. A credit score is an analysis of your risk to the creditor, meaning the likelihood that you will default on what you owe. I already have a well established history of paying back everything that I receive, and these new credit cards will only serve as further proof of this. I know it sounds counter-intuitive, but none of this will effect me in the long term. I've done hours of reading on credit forums and flyer-talk where people have been doing this for years with no ill effect. It's all good if you don't want to do it though, I just don't want people to think it will hurt them later on, because it won't.
In general, people overestimate the impact of hard pulls on their credit score. As the original poster points out, the effect will disappear entirely after 2 years, and won't have much effect in as little as 6 months. They're a factor in determining your credit score, but not as big as whether you consistently pay bills on time. (People also obsess too much about credit scores...generally you'll get more mileage by being a good negotiator with decent credit than a poor negotiator with perfect credit).The mere fact of applying to a superfluous amount of credit cards (not necessarily being approved) damages your score in itself and I hope you will be able to get a decent interest rate on a car/house loan should you desire one in the future.
You do have to be an American resident - or at least have an American mailing address and credit report - to participate in these particular schemes, but there's similar opportunities in other countries. If you're interested, the flyertalk boards are known for their discussions of bonus mile opportunities. Some people have stories of spending the weekend flying to Singapore and back just because the flight was cheap enough that the points were worth more than the cost of the flight...sad but true.
The coin purchase thing seems a bit over the top - most people have more than $1500 in two months of spending just on ordinary purchases.
As to the coins, I was just throwing that in there if you can't fulfill the minimum spend. I knew that many people saving for a RTW might not have too many expenses if they can't put their rent or something like that on the card.
Some people on flyer-talk are going nuts with the coins. Apparently you can order nearly 25k per order right now and people are banking some serious miles solely off of that. Seems like WAY too much hassle for me, but to each their own.
highgear wrote:There's alot of misconceptions about credit scores out there.
Yes there are and you are repeating them on this message board. Where are you getting your information from if i may ask?
Taken from the Federal Trade Comission website.
What can I do to improve my score?
Have you paid your bills on time? You can count on payment history to be a significant factor. If your credit report indicates that you have paid bills late, had an account referred to collections, or declared bankruptcy, it is likely to affect your score negatively.
Are you maxed out? Many scoring systems evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, it’s likely to have a negative effect on your score.
How long have you had credit? Generally, scoring systems consider the length of your credit track record. An insufficient credit history may affect your score negatively, but factors like timely payments and low balances can offset that.
Have you applied for new credit lately? Many scoring systems consider whether you have applied for credit recently by looking at “inquiries” on your credit report. If you have applied for too many new accounts recently, it could have a negative effect on your score.Every inquiry isn’t counted: for example, inquiries by creditors who are monitoring your account or looking at credit reports to make “prescreened” credit offers are not considered liabilities.
How many credit accounts do you have and what kinds of accounts are they? Although it is generally considered a plus to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many scoring systems consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies may have a negative effect on your credit score.
Once again, the mere fact of APPLYING to a superfluous amount of credit cards irreperably damages your score for years to come despite you having closed them shortly after them being opened.
Accurate Negative Information
When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you've applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.
I'm not here to argue but I'm just raising your awareness of the facts regarding your credit score and should you want to get a decent interest rate on a loan down the road maybe you should rethink applying for too many credits.
The US Mint $1 coins seems more plausible but just remember NOT to max-out your card(s) too often because that also damages your score. Having a low credit balance is advantageous.
The people on credit boards are especially knowledgeable about these topics. Some of the frequent posters on that site have even worked for credit bureaus or worked in mortgage depts of major banks (basically analyzing credit reports and handing out loans based on them).
You have pulled the rules that are written by the FTC, which are in the most generic terms as possible. They do not get into the intricacies of what effect certain things may or may not have on your credit report. Yes, applying for numerous cards at a time WILL have a negative effect on your score (a minor one at that), but this is TEMPORARY. The key here is temporary. I have gleaned this knowledge from people who have actual experience with these exact things, not people who can pull the generic rules from the FTC site which is written for the lowest common denominator. If you want to keep going about this, take it to PM.
Also please stop warning me about what I'm doing. I've been monitoring my credit score closely during this whole process so I know what's happening. I am 100% positive I'll still be in the excellent credit category (above 750) a year or two from now.
The FTC website is the authority with regard to consumer protection; not the subjective, unvalidated posts you see on public message boards that you or I could have posted. The facts are also reflected on MyFico.com. Applying for too many credit cards and closing the account shortly after just for the introductory and conditional offer is detrimental to your credit score; this is unquestionable advice.
Best of luck on your RTW trip. See you on the road.
Applying for too many credit cards and closing the account shortly after just for the introductory and conditional offer is TEMPORARILY detrimental to your credit score; this is unquestionable advice.
I'll see you out there buddy.
One other thing to consider is that for every new credit card number created in your name is one that can be stolen. While you can usually recoup the $, it's a major PITA and one I would want to avoid dealing when I'm in a somewhere remote. Yes I know, they can be cancelled as soon as possible, but it's one more agency or company having access to your vital info, and can mismanage it. I had my debit card number stolen once here in the US and it was a lengthy and annoying process to deal with.
Will be interesting to hear how this goes.
If you are responsible, good with keeping track of payments, credit cards, etc, this is ABSOLUTELY TRUE and worth it. I have been doing this for the past year, and I will be flying my brother and his girlfriend round-trip international for spending money on Citi-Bank Credit cards that I would have spent ANYWAY.
Thank you to whoever started this post. It makes me happy to know that I am not the only one.
As to the risk of someone stealing your card number, I suppose there is some risk of that but these accounts only stay open 2 months at the most so there really isn't much chance of that at all. Also you should be managing them closely so you would notice any charges and these are easy to get removed by the credit card issuer. Debit cards are TONS more hassle than credit cards as far as getting the money back.
Dove, as I said in the original post I wouldn't recommend doing this if you are planning on applying for any major loan in the next year or so. That's why I was saying this works great for RTW travelers, because we are more than likely going to be gone for a while and not needing any sort of loans. Prospective employers are looking for things like bankruptcy or high amounts of debt depending on your job. Like a discussed earlier though, these activities won't really hurt your score in the long run much if at all.
Alright heromachine! Glad to see someone else out there doing this! Thanks for replying and letting us know about your experience with this.
Anyways, for those who care my girlfriend and I now have around 130,000 miles with American! That number will be close to doubled by the time we leave. We are planning on booking our first flight soon when we hammer down the exact departure date! So basically to all concerned this is going as well as I could have imagined and we will indeed be flying around the world for little more than taxes and fees.
1. How much does Yodlee cost? Or is it a free App?
2. I have only been able to apply for 1 CC per 2 months, no 2. Is there a reason for this?
3. Also, are you canceling the credit cards right before the 1 year mark so that you don't have to pay for the second year (the first year is obviously waved)?
I was just approved for another card yesterday.
I'm not sure why you haven't been able to get 2 cards per 2 months. What I do is apply for both cards back to back on the same day. This has resulted in only 1 hard pull for both apps for me. I know the Citi policy is 2 apps in a 60 day period, but they are really inconsistent so some people report different results than others. The general rule is 2 per 60 days though.
I've been canceling the cards right before I apply for the next set of cards. You can actually do it online by submitting a secure message. It's super easy and you don't have to talk to the retention department.
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