Travel Fuels Life Podcast and Show Notes
Miles and Points 101 (Ep.28a)
UPDATE: COVID-19 has played havoc with travel and this has left many of you with cards and points you haven't been able to use - and now the annual renewal fees are hitting. Thanks to Raul for turning me on to this article in MONEY magazine, talking about some of the strategies you might consider with those cards...
Now on to the episode:
This week is our opportunity to take a deep dive into the subject of credit card and loyalty program miles and points! If you want to fly as much as you can for as little cash as you can, this is the episode for you.
My guest is Brandon Neth, social media and audience growth guru for FinanceBuzz.com. I first heard Brandon on Danielle Desir's "The Thought Card" podcast and thought he was absolutely brilliant. Then I discovered his powerful Facebook Group called FBZ Elite - Travel and Points (private Facebook Group) and I was hooked on learning about this miles and points game. You'll find some valuable information here.
We'll talk about foundational information, how to get started, how to protect your credit, and maximize your points and benefits. And this is just part one. Next week, we'll talk airlines, hotels, car rentals, and other loyalty opportunities.
Subjects covered include:
- Humble beginnings (doesn't require tons of money, just spending habits)
- Brandon's journey: using a miles and points for a nomadic lifestyle through 76 countries
- International works really well for the miles and points
- How U.S. residents have a greater advantage in the miles and points game.
- What is Neth-class?
- Roughing it, the luxury class, or mid-level?
- Could you never pay for a flight again?
- Dave Ramsey, baby steps and getting out of debt
- Developing good financial habits - only buy what you buy and don't carry a balance
- Blowing through $100,000 before discovering financial literacy
- The right way to open up credit accounts. Understanding minimum points.
- The 5/24 rule (FinanceBuzz.com Beginner's Guide)
- Points aren't all created equal: Transferable, Co-branded, Fixed Value
- Business class transfered points could be up to 25 cents per point
- Look at your situation and which work for you
- Maxing out benefits of Chase for business owners
- Justification for high annual fees
- Added benefits of cards include savings on TSA PreCheck, Global Entry, travel insurance, baggage protection, airport lounges (Priority Pass), free food and drinks.
- American Express and Delta SkyMiles companion fare vs Southwest companion pass
- Which card to use where
- Making sure you don't make a mistake.
Brandon's Full Explanation of Point Values
- FBZ Elite - Travel and Points (private Facebook Group)
- FinanceBuzz YouTube (highly recommended)
- Danielle Desir's Interview with Brandon (includes talk about his real estate investing)
Hello everybody and welcome to Travel Fuel's Life, the show we share stories, tips, and inspiration to help you live a travel lifestyle. I'm your host, drew Hanish. What comes to mind when you think of the words miles and points? Is it excitement? Is it excitement for all the potential that you could get out of miles and points? Is it confusion due to the varying values and multiple ways you can cash 'em in? Is it concern about how much credit card debt you could potentially be taking on? Or is it just plain frustration that the lack of clarity and how miles and points actually work? Well, if you fall into any of these categories, you're going to get a lot out of the next two episodes of Travel Fuel's Life. I'm bringing in guest Brandon Neff of finance buzz.com to cut through all of this and help us get some clarity on the subject.
Now, I first heard Brandon on Danielle DER's the Thought Card Finance podcast, and you'll remember Danielle from way back in episode number seven, where we talked about her being a financially savvy traveler. Well, they got into more than just miles and points. And what they did talk about in terms of miles and points I found very, very interesting and helpful, but I still was feeling a little bit overwhelmed. So I invited Brandon in and I wanted him to join us and break all of this down into foundational information that can help us get over those concerns that we have and start utilizing the great benefits and the cost savings and even some free flights simply by understanding how these programs work. So in this first episode, we'll focus on how Brandon got into this world of low cost and even free travel, and then talk about credit cards and credit card debt and how to work our way into what credit cards are going to do the best for us, which ones we should get first because there are some that take priority over others and how to leverage these credit cards to enhance our travel lifestyle.
And then when we go to episode two, we'll talk more on loyalty programs. So lots of great stuff coming your way. And so from my home here in Greenville, South Carolina, it's time to jump on the internet and listen to Brandon Neff drop some miles and points knowledge on us. Brandon, thanks for being on the show this week.
Thank you. Super excited to be here.
Well, I got to tell you, I've been absorbing your F BZ Elite Facebook group. There's so much great information in there, but there's so much stuff to learn. It's a bit overwhelming at times. So I thought it'd be really cool get you on the show, have you do kind of a foundational miles and points 1 0 1 lesson so that people could kind of develop a strategy and make their way through this world of credit cards and loyalty programs and not make all those crazy mistakes that could be made from the start. So I appreciate you being on the show today.
No, I'm excited to be here. I appreciate it. And just quickly, I wanted to touch on that. The first thing you said it, I completely understand you're not alone in feeling a little bit overwhelmed because there's a lot to it, but it's just like anything, I know you're a web designer. I look at people like you, that code and I get super overwhelmed. It's a process. So I'm happy to help where I can, and I'm glad that you find value in the group because for me, I see that as one of the most valuable benefits and one of the most valuable ways to learn is to have a community because anything and there's no one person that knows everything. So that's why it's so valuable because it's not just me, it's not just my moderators. There's 20 other thousand people helping each other out. So I I'm really glad that you see value in it because I'm excited that it has become what it's become.
Well, I bumped into you via Danielle Deser, who's been on the show before and she's got her show the thought card. And you guys were getting into some of this miles and points discussion, but your story is actually very interesting as well, where you've come from and how you got all of this started. And so kind of take us back to 2008 and where you were at because you're now living a nomadic lifestyle and using these miles and points, but you kind of had a humble beginning on how this all got started. Could you share some of that?
Yeah, absolutely. So 2008, here's the thing, my background, like you said, I come from this really kind of humble beginning. My family didn't travel, we just couldn't afford it. We couldn't, wasn't a priority. It was more about the food on the table and if we had a roof over our head, travel was the furthest thing from our mind. And that was just the mentality I grew up with. I graduated college in 2006, 2008 come, I went into corporate America. I was with my girlfriend now my wife. She went into nonprofit 2008, rolled around. The economy got bad and we both got let go within about a week of one another. Again, I had no idea what I was going to do. I was freaking out. And she had been a nonprofit and just been around a different type of people that were just travel, go see the world do something different.
And they pushed us into going abroad. We looked online, looks like you can teach English in Thailand relatively easy. We found a cheap enough flight week in Hatley. It was like two weeks later we were on a flight to Thailand and we were moving there. We had $2,000 in the bank and we were just going to figure it out. Landed in Thailand, started. We did a teel teaching English as a foreign language course. And I ran into somebody and I was talking to him about how we paid for our flight, and he just kind of said, have you ever heard of points, miles? And I said, well, I know credit cards really well. I got good credit. I do cash back. And he just kind of opened my eyes and I ran into it and I just went full steam at it. I realized that this was the way I could learn to travel for significantly less because as soon as I hit Thailand, I caught this travel bug.
I was on the road for two straight years. And anyway, so like I said, we were on the road for two years. We lived in Thailand, we lived in China and ran on English school. We did time in India, we lived in Australia. We bounced all over. And if it wasn't for the points of milestone, I don't know if we would've been able to do it because I'm not a high earner. One thing that a lot of people come into this and think, I can't get into points of miles because I don't make enough money or I don't spend enough money. Well guys, I've never made a lot of money. I've never been anywhere near a six figure earner, but I am able to utilize this because I know how to optimize. So it was just incredibly valuable and it has led me to where I'm at in my life where I'm now living a full-time digital. I actually own multiple properties. I'm in real estate, but I have a digital life where I bounce around, I go where I want. I'm on the road six months out of the year, and I've been doing that every year for the last 11 years because of this program.
And so on her show, you said you'd been to 64 countries, but I just saw you were in Bosnia. So where are you at now in terms of how many?
Yeah, so we just got back three days ago from a trip through the Balkans. So we flew into Croatia, worked our way on all the way to Greece and flew up and did some time in Romania, in Slovakia and Ro in Budapest. So we're now at 76 countries and no plans to stop anytime soon. We've got another trip this year. We've got two trips planned to Europe again, this year we're going to Australia, and then we're going to spend some time in Central and South America again.
All right. Which one's been your favorite so far? That's always a fun question.
Yeah, it's always a good one. It's hard. I always like to give my top five. I love India, I love Japan, I love New Zealand, I love Spain. And I would probably number five's always so hard. It always comes. It's always, oh, what am I going to say? But I would say number five's probably just in general to uk, and I love all of 'em for different reasons.
Do you travel around the US at all or are you pretty much just world hopping at this point?
Recently we've spent some time in the US. It was never a real big priority. We've been to like 30 states, but we have fallen in love with the national park system in the US and we've figured out a way to make it really cheap. And so we've just fallen in love. So last year we did this big national park trip. We flew into Utah and worked our way all the way up to Montana and just had a great time. So we do do the us, but we like to focus on international while we can, because we're relatively young, we know we're not getting any younger, and the points and miles just stack up really well internationally if you do it right, because this is a program that's really points and miles is really something that is focused on US consumers. It does exist in Australia and Canada and the uk, but not to the same level it does in the us. So because we have so many options here in the US when we go abroad, our points and miles go so much further.
Well, and is it true because somebody told me this, they don't really have this anywhere, but in the United States, miles and points aren't really something that other countries can do. Is that true?
So yes and no. Like I said, not to the extent that we have it here. For example, there are cards in the US when you sign up for 'em, the signup bonus, which is the amount of points you get when you first sign up for meeting a minimum spend, the signup bonus can be worth anywhere from a thousand to $1,500. Something of that value in other countries is unheard of. You might get $200 on the high end. Okay, so from that perspective, it doesn't exist. But the loyalty program, so let's just pick an airline, let's say Delta Airlines, they're international. Well, if you live in Australia and you fly on Delta, you can get Delta miles or you can't get Hilton Honors points in Australia. But just not the same way we get it in the US and be again, because of that, we in the US are able to leverage that and really kind of take advantage of it and get maximum value.
And you strike me as somebody who wants to get as many trips out of your points as you can rather than upgrading to luxury. Is that true?
Yeah, absolutely. It's kind of funny you mention it. So you mentioned the Facebook group. I post in there, I'm really, really active and it's become kind of this running joke. My last name is Neff and people call it net class when you fly economy or you stay at maybe the lower end hotels. Because yeah, I would rather take two trips with my points than one trip with first class. And I'm not saying my ways the right way, everybody can do their own thing, but for me, because they go so much and I'm not a big earner and I'm not a big spender, that's how I optimize and how I like to do it.
Well, this is great because this shows that you can mix and match and kind of do things either your way or you can go for the luxury way of handling it. And I saw your video where you were making, you were walking into the Four Seasons in Budapest. The next thing we know, you're climbing 250 stairs to the top of this hostel in Budapest. So you see for me, the hostile thing, I haven't gotten that yet. I like to fly cheap. I like to get as many flights as I possibly can, but I joke that I like to have the mint on the pillow, even though I'm not really staying at the Four Seasons, but I will stay at someplace that's probably equivalent to something like a Hampton Inn would here in the United States. So it's just funny to see. So you don't mind roughing it when you go from place to place.
As I've gotten older, I've gotten a little bit more, I got my wife and I should say both of us, we've gotten a little bit more picky. Back in the day we would stay in hotel dorms with 30 people and you know, have an 18 year old kid above you with the girl he just met at the bar doing whatever they're doing at two o'clock in the morning. But the room is two, three, $4 for the night. We've gotten beyond that. So we do stay at hostels if we do it, we stay in private rooms or like a Hampton Inn or a Hilton Garden in things like that, if I can use it on points of miles. So I'm okay with roughing it. But yes, as I get older, I appreciate some of the finer things in life, but I'm still not, I tell you, I don't care if I'm a multimillionaire and I'm just got all this money, I don't think I'll ever stay to Four Seasons because a Hilton or a Hyatt or a Marriott, their mid-level is enough for me.
So I've heard somebody say before that you could run this game well enough that you would never have to pay for a flight again. Have you ever gotten close to that?
In all honesty, I'm pretty much there. I've been there for the last, well, like I said, almost 11 years coming up on 12 years. Yes, if you do this and you maximize optimize, you can get it to the point where you just don't pay for flights and pretty much you don't pay for hotels. As I mentioned, mentioned, I just got back from a month long trip. I covered every flight, I covered every night accommodation, and I covered my rental car the entire time on points of miles. And I don't want to mislead people and tell you, this is completely free because you are going to pay taxes and fees and you are going to pay baggage fees at times if you don't have status or the right credit card. So there are expenses that go into it, but I think out of pocket total with all those things added up, for my last trip, I took about 12 flights total and out of pocket I spent less than $300 for my wife and I. Wow. So it's impossible.
It's money in your pocket.
And that's the other thing. There is an actual side of this where you can make money, but for me, I look at it as a real world savings because this is money I would spend no matter what. These are places I'd be going no matter what. So it's a real savings. Absolutely.
Well, good. Okay, so I want to get into loyalty programs and that sort of thing in just a few minutes. But the first thing to talk about, because I think they're the most obvious to everybody are credit cards and how you can sign up for credit cards and do all of that. But you and I think are very close on. In 2008 for a little backstory on me, I was in a rut. I had just bought a brand new house. I went through a divorce almost immediately after that. My debt was $90,000 and I didn't know how I was going to pay it off. And I went on the Dave Ramsey plan, and for the people who don't know Dave Ramsey, he gives financial advice and he is big about cutting up your credit cards, doing baby steps and getting out of debt. And so it was fantastic because I paid off my $90,000 worth of debt and came out the other side of that saying, Nope, not doing credit cards, not doing them.
And then all of a sudden I got this travel bug and said, I want to go, go, go. And I have one credit card, and it was for my business, it was an American Express Gold card. And in 2016 I had my first miles and points experience because I had to build out a brand new office and I decided to put the money that I was going to be spending on supplies onto that credit card, got the signup bonus, and had enough points to get me to Paris for free. So that was starting to hook me, but I still didn't have any personal credit cards at that point. And I started thinking, okay, wait a second. How do I jump in and start doing this? And you have probably heard this from other people as well. When you get to the point of handling credit cards, there's a certain responsibility that comes with it and there's a loss of benefit if you start taking on finance charges. So how did you handle credit cards coming out of debt and trying to figure out how to not stick yourself back in that hole again?
So first of all, kudos. That's an incredible story that you just told. You are honestly where so many people are where you were. And so many people are struggling with that. So the fact that you did it, it's like an absolute inspiration. It's amazing that people can really buckle down and make things happen. So awesome it I'm like smiling. I wish this one's on camera. I'm smiling, nodding my eggs. I'm so impressed. But I think what you did, you hit the nail on the head with a couple things. So let's first cycle back the Dave Ramsey, right? So again, like you said, Dave Ramsey is kind of this financial guru personality influencer, and he is, yeah, cut up credit cards, debt is worthless, get out of debt, and he's created these two approaches. There's a snowball approach and there's an avalanche approach, and they both have different benefits, but it's they're ways to get out of debt and they're damn effective, if I'm honest.
And he's good at what he does. I'm not saying he's not, but I am a believer that not everybody is right about everything and we can learn from one another. And I don't agree with him when it comes to the credit card things. However, I honestly think people that have gone through the Dave Ramsey process and gone through his baby steps, like you mentioned, are the perfect people for points and miles. And the reason I say that is because these people have gone through the process, they understand what it's like to be in debt, they understand what it's like to get out of debt, and they've since put good financial habits in place because like you mentioned is if you start buying extra things with your credit card to earn points, if you're carrying a balance and paying interest, absolutely do not do this. That is the key to this.
You only buy what you would buy anyway. You never carry a balance because it's going to eat into the benefits you get. So if you've got that mentality and those good financial habits in place from somebody like Dave Ramsey or there's a bunch of other people that do this as well, you are in very, very good shape because you can get these cards, you can utilize them, you can sign up with them, you make your payments, and then this essentially becomes free points and miles, free travel, free money, however you decide to use your points because exactly like you were saying, you use them to buy something, you're going to buy anyway. You get that big signup bonus or you get the points that you earned from that spend and you use 'em to travel. And that's exactly what I did. So I've kind of got a story as well.
I got this big family inheritance. So I said they come from this humble beginnings and I, I've got a kind of wealthy family on one side, and my father and grandfather passed away within about a year of one another. My grandfather is really wealthy, he left me money. I had no idea it was coming. I was 18 years old, it was over a hundred thousand bucks. Oh wow. It was a lot of money, but I had absolutely zero financial literacy. I didn't know what to do with money. I was in college and what I managed to do within four years, I blew through the a hundred thousand dollars that ended up in pretty significant debt. That's how bad I was. So instead of investing it and being smart, I blew through it, ended up in debt. So I kind of went through the same process you did.
And I actually didn't know about Dave Ramsey at the time. I wasn't a super tech savvy or internet guy at the time. It was my wife. She kicked me in the butt. She just kind of said, Hey, here's how it is. She kind of looked, we had a heart to heart, and she's like, if you want this to work at, meaning her and I, she's like, you got to get out of debt, you got to get your stuff together. So I told all my, I had cars and fancy clothes and TV and electronics. I was the epitome of what is wrong with people today that aren't doing things right, I guess. So I was just in bad shape, sold all that off, got out of debt, did exactly. Sounds like I did exactly what you did. I started following just this step by step process and in that I started to realize the way I used a 0% credit card actually at one point.
So instead of signup bonuses, I moved some of my debt to a 0% card for 18 months. And it saved me, I had done the math at one point, but it was well over 1500 bucks, which was a lot of money to me. And I used it to get out of debt. And because of that, I was like, this is working. I'm seeing how points and miles and cards and cash back is working. And then, like I said, I went to Thailand and everything just lined up just perfect for me, and I am where I am.
Well, it sounds like you got a good woman behind you too, which that support system I think helps a whole lot.
Well, I honest anybody listen to this, honestly, I owe everything to her because I just didn't have an understanding. And if it wasn't for her kind of saying, Hey, if you want this marriage to work out, who knows where I'd be, but I definitely want to be where I'm at today.
Yeah, well, I mean, the plus to this whole thing, and I think you'll agree with this, is that after you've gone through it and you've seen how deep a hole you can dig for yourself and you finally get out of it, you want to do anything but get back into that hole again.
Yeah. Preach. Yeah. Seriously. It is heartbreaking. If you've been there and you're going to end up back there. I mean it, it's so stressful. It takes a toll on you that you don't understand.
Yeah. So now what was the first card that you got once you started thinking towards travel and wanting to be successful with using miles and points? Did you have a favorite or were you using a loyalty program, or how did you get started on it?
Yeah, so when I jumped into it, again, I was living in Thailand at the time and I made mistakes to be honest. I learned about it and I just jumped in and started doing it. The number one thing I have to preach to everybody is to have a plan. Don't just jump in, understand things, utilize communities. Ask people that have been doing it for a longer time than you, because I didn't do that. And I started opening random cards. I opened a Bank of America card, I opened an American Express card. These cards aren't around anymore, so I'm not telling you exactly what they are. But I opened Bank of America and I opened an American Express card. I made such a mistake on American Express card. When I opened it, the way they had advertised, it was, you know, open this card and you get essentially a ticket to anywhere in the world.
Well, what I didn't understand is that you had to meet a minimum spend when a minimum spend means you have to spend X amount of dollars in the first three months, and then you have to use those points in a specific way. Well, I didn't know that. Again, I made a mistake. I didn't research it. So I opened this card and I let it sit in my pocket for, I don't know, eight months. And then we decided, all right, well, we're going to try to use this card. And we were going to fly from, I think we were flying to India, and they're like, well, you have no points. And I went through this whole process, sign up bonus. They said, I got this and if I signed up, I get a flu. And they're like, and they explained it to me and I was like, oh man, I really, really screwed up.
So I'd opened two cards, missed the signup bonus, got hit. So anyways, I didn't have a program. So that's what I did at first. And then I really buckled down and started learning. And I got into primarily Chase cards. And most people will tell you, you want to start with Chase cards. The reason for that, so we've got a whole beginner's guide on this, on our site. There's a lot more to this than I can go into right here. But quickly, they have a rule called 5 24. And it just essentially means you can only open five credit cards in the last 24 months before Chase starts denying you. And the reason it's important that you want to make Chase your first cards is because those rules only apply to their cards. So you can only get Chase at the beginning. And because they have some of the best cards, they have the some of the best signup bonuses, some of the best perks, you really don't want to miss 'em. Literally, if you do this wrong and you don't utilize those five spots correctly, if you just went out and went somewhere else and completely missed Chase, you could cost yourself about, depending on how you travel, seven to $10,000 in free flights by doing it wrong.
Wow. Okay. So Chase is one of my favorites. They use the Chase Sapphire Reserve card and
The thing about that card for me is that the point system seems very straightforward. I mean, when you take those points, they seem to have a specific value. I could go on Google Flights and find a discounted flight and buy the tickets through Chase's website and get the equivalent to those discounted dollars. And my points used. And that was great. That was a great experience. And then not so long after that, I saw an offer come from Barclays. I was on an American Airlines flight and they were offering 60,000 miles for a signup bonus. And I thought, well, fantastic. I mean, I know how it's worked with Chase. So then I signed up, and the first time I tried to book a flight, it was taking all 60,000 of my miles, and I wasn't taking that long of a trip through the us. So I mean, the point seemed to work a bit differently on these cards. And is that really one of the advantages of the Chase card?
Absolutely. Okay. You're very knowledgeable. You learn by feet to the fires, what I like to call it. Yeah. So yeah, the thing is, points aren't all created equal. You have to understand there's primarily three different types of points. And it's funny, cause I literally just finished recording a video on this today. We're in the middle of editing it because I get asked this so often. So it's not necessarily that Chase points are so much better than American Express or American Airline points. It's how you use them and how you utilize them. And this can be a lot. I'm sure there's a lot of people right now going, oh man, this is too difficult. But I promise you I'm not a super smart guy. If I can figure it out, anybody can. So just stick with me. Three main types of points, transferable points, co-branded points, and fixed value points.
And that's kind of the hierarchy of them. Transferable points are Chase points, chase ultimate rewards, American Express membership rewards, Citi, thank you Points. And the reason these are called transferrable is because you can use them to book exactly like you did. Like you said, you go to Google and then you go into the Chase portal and you find a great deal. That's one way, it's way, I love to do it because I'm a cheap Charlie. The next one, you can transfer them directly to an airline. And at times, if you are a premium class flyer, so if you're flying business or first class, you can get superior value out of these points. So me, I don't do this, but you can literally, so you and we book in the, it's called the Chase Travel portal. So if we book directly with Chase, with the Chase Sapphire Reserve, each point is worth essentially one and a 5 cents, 1.5 x.
But if you transfer to an airline partner and you're booking a premium redemption, there's times you can get 25 cents per point. Oh wow. Because those flight, those flights are so expensive. If you're flying Singapore suites to Singapore, there's times those flights from let's say New York, right, to their, they're $10,000 flights, but they're going to cost you a hundred thousand points. Well, you just got 10 cents per point. That's just an example. So because there's so many ways to use 'em and you can transfer, can utilize 'em in so many ways, transferrable points tend to be the most valuable. The next one, co-branded points, which is what you were talking about with American Airlines. They are a point that you earn. They're more like the loyalty programs that you mentioned earlier. So each airline, each hotel chain has their own loyalty program. And when you earn those points, those points are typically locked into that program.
So I can't use my Hilton Honors points to book a Marriott Hotel, for example. So you're locked into one. And because of that, there's not as much flexibility and not as many ways to use 'em. They tend to be a little less valuable, which is what exactly what you ran into. You can't use 'em in any other way except for exactly what you showed. So you use up that signup bonus pretty quickly. So yes, not all points are created equal. And again, this is just a matter of spending time or talking to somebody or talking to a community that can help you out and answer these things because it's constantly in flux and it's something you got to learn. But if you learn it, I'm telling you, there's tens, hundreds of thousands of dollars here. So
Making a decision, like for instance, today, Southwest Airlines saw they had an amazing offer, tons and tons of points. I have Southwest, they are in my airport, so I could take advantage of that. But then I think about my American Airlines experience and I think, well, maybe I should just pass this up and get a Chase Ink card for my business instead because they've got a great signup bonus also. I mean, I know those points are transferrable.
Yeah. So I assume you're probably talking about the new Southwest Southwest business card that's got 80,000 points on it. Yep. Is that right? Yep. Yeah. Okay. So yeah, that just came out yesterday or the day before. So first they are co-branded points. So exactly the situation I was talking about where you don't get quite as much value at times. There are a couple caveats to that where you can really maximize with Southwest specifically because they have a specific program called Companion Pass where you get buy one, get one free flights for up to two years. So there is really a way to maximize this, but for me, and for the vast majority of people in this hobby, the way to do it and the way to maximize is to get that Chase Ink card right now because you want those transferrable points. What's really, really cool, this is a great example that you brought up.
You get that Southwest card, you get 80,000 points. There's also a Chase Ink card right now that also offers 80,000 points. So which one do you get? Well, here's here the Southwest card, you can only use your points on Southwest for the most part. There's a couple other ways you can use it, but not good valuation. But if you get the Chase Ink card and you get those 80,000 points, you can move those points directly to Southwest if you want, and they're worth the exact same thing. Or you can move them to Hyatt or you can move them to United and so on and so forth. So because you can transfer those Chase points, their 80,000 points are worth significantly more than the Southwest in this example. So that's why, again, transferable currency and understand the program. So you could have picked a better example.
Perfect. Well, and you mentioned the 5 24 rule, and I think this all plays into that because you have to figure out which card is going to give you the maximum benefit and the easiest usage. And then, I mean, if these are the Chase cards first, then that's why you would want to have that strategy of make sure that you're not wasting the five that you can sign up for by getting cards with much less value to them.
Absolutely. And the other thing is, I should say, these aren't hard rules and my way isn't the way, it's not the right way. It's a way that I and many people have maximized. So I'm not telling you my way's the best, but everybody needs to stop and look. So what I'm saying is everybody needs to stop and look at their situation on what works, what five cards makes the most sense to you. Luckily though, we're talking about business cards. Business cards don't count towards 5 24. So that's a really nice little way to kind of maximize. So if you're a small business owner like myself, you, you're 5 24, you can put 10, 15, 20 cards in those five spots because you can get business cards and if you have multiple businesses, you can get multiple of the same card, multiple of the same business card. So again, it's just these little things that you learn as you go and really maximize. And it makes Chase happy as well because they want your business. They make money every time you swipe the card. So it's really kind of a symbiotic relationship where everybody's happy.
So one of the things that happens with these cards, especially the ones that have a lot of value to them, is that they tend to have annual fees. And sometimes those annual fees are pretty high. I think the American Express was like $550 a year for the platinum chase. I forget what I paid, but I think it was like four 50, something like that. How do you justify the spending of that money on an annual fee on a card? And does that restrict you from how many cards you want to have in your wallet?
Fantastic question. And it's one I get asked all the time, and I want to start off by letting everybody listening know that I am as frugal as anybody you've ever talked to. I cut mold off a cheese, I drive a 1995 Toyota Corolla. I wear clothes with holes in them. This has been my strategy to get to fire financial independence, retire early for years. So I am crazy, crazy budget minded, but I still pay thousands of dollars a year in annual fees. And the reason I'm willing to pay that thousand, I would have to sit down and do the math. I don't have it in front of me, but it's well over $3,000 I spent out of pocket on annual fees. The reason I'm willing to do that is because I get more money back out of my cards. I get more value from them talking about Chase.
Let's keep it easy. Let's talk about the Chase Sapphire Reserve $450 a year. Okay. Most people see that and they're like, no way I'm touching that. I'm going to go get the Chase Freedom card. That is $0 annual fee. Well, let's break that down. So you get 450 bucks. The first thing is you get a $300 a year travel credit and that travel credit, it comes off automatically anytime you use your card for something travel related. So if it's flights, hotels, Ubers, taxis, it's so easy to use, automatically $300 comes off the top. So you're now at $150. Also, when you sign up for the card, you get a signup bonus. Typically it's about 50,000 points that's worth $750. So obviously we're already above and beyond that $150 you paid out of pocket, you're net $600 positive right now. But there's more to it. You get TSA pre-check or global entry, which for those of you that don't know, it's when you see people walk by you when you're waiting in the TSA line and they go straight to the front, it's because they've got this benefit.
It's not because they're fancy, it's because they've got one of these benefits. So it's something that it's typically cost you money to do that. These cards cover that fee for you for up to five years. So there's another a hundred dollars savings. And then you get, when you're talking about how to redeem points, there's extra ways to get value out of redeeming these points of the csr. You get lounge access, which has been okay, people listening, if you've never been in an airport lounge, do it. It will change your life when you've flown 24 hours on a flight and you can walk into a lounge and eat and drink all you want and get in a shower completely for free heaven.
Yeah, I was going to say, I have utilized that a bit and sometimes I forget I have it. I was in Dublin and I was thinking, oh, I got this long layover before my flight, and then I was looking at a restaurant and I'm thinking, geez, I'm going to spend 25 bucks there and if I want a beer and all of that. And then I thought, wait a second, all I need to do is go up to the lounge. And then I had a couple of beers and I had a meal. I mean, it's picking off the buffet, but still, I mean, how much did I save right there? So you do that four times a year. You've already paid another a hundred bucks on this card
Easily. So those people listening, when you have these premium cards, a lot of times they give you lounge access. That's what we're talking about through Priority Pass. And one overlooked benefit of this is sometimes they get you into a restaurant. So you mentioned you want to get some food. Sometimes you can literally take this card that you have, you run it for $28 at a restaurant and you just get $28 worth of free food. You get it and up to two people with you get it every single time you go to this restaurant. So there's all these different ways that you get value. And with, as often as I travel right now, I'm keeping a running total of my lounge access. Every time I walk into a lounge, I assign it a $5 value. I like to be very, very conservative with my numbers. And then when I go to one of the restaurants, if I get $28, I give it a $28 valuation. So far this year alone, I've gotten $2,659 in value just from my lounge access.
Just from up till July or June. I mean up to,
Yeah, exactly. Wow. So that's what I'm saying. So when I look at these annual fees, yes, it's a lot, but because they're saving me money that I would spend, they're making my life better, they're giving me all these perks. It absolutely is justifiable. And then you get other things that we're, we haven't even touched on. You get baggage protection, you get trip protection, you get price protection, you get buying protection. There's so many things that come with these cards that really make the annual fee justifiable.
Well, let's talk about one that's I think sort of falls in between. I'm not sure whether this is a co-branded or this is a transferrable, I'm thinking it's a transferrable though, is the Delta American Express card, because that comes with an interesting perk, which is the companion fair that can actually, somebody can ride for free when you buy a ticket.
So there are actually a few Delta cards. I think you're probably talking about the Delta Platinum, if I'm not mistaken. Well, there's four variations of it. They're all issued by American Express. And this is actually a co-branded because it's issued by American Express, but the points work with Delta so that they co-brand together. But the way these cards work is when the companion called the companion fair that you're talking about specifically is it's kind of a really neat and cool value where you pay X amount of dollars for your flight, whatever it is. I think you do have to spend $250. So I go to the airport, I'm deciding I'm going to fly to from Portland down to Orlando, and it's going to cost me 300 bucks. Well then I can pay a hundred dollars for my companion to jump on with me. And they jump on.
And you can save yourself $250 sometimes significantly more. And again, that's another way to justify the annual fee. For me, I'm not a hu Delta doesn't work real well my where I'm at, if you are by chance based in Atlanta, right, make sure you have a double card. Cause that's their hub. So again, what this is coming down to is where you're based, but there are different cards that also offer this. Alaska Airlines, the Southwest I mentioned. I want to point out though, for those listening, the Southwest Companion Pass is unlimited. So it is buy one, get one free for up to two years with absolutely no limit. So yes, if you have this card, you've got an annual fee from the credit card. But if you are using this right, and you've got a companion pass, literally buy one, get one free, you pay $11 and 20 cents in taxes and you can fly anywhere Southwest flies for up to two years. So yeah, like you're saying, there's so many different ways to justify and utilize these cards. The annual fee, I usually look at an annual fee and see, oh, that means I'm going to be making money. So the higher the annual fee, the more money I'm making are saving.
Yeah, I think this is why my brain cramps on it every once in a while because I keep thinking it'd be nice if I could put a spreadsheet together and list all of them out and then figure out which one I'm actually going to save more money on. So because that's how my brain works, it's like, okay, let me calculate this in my head to figure out which one is the best value and then I'm going to jump on that. But it really does matter how you like to fly and what flights you can get out of your own airport. And sometimes I can't go into a lounge because it doesn't have the priority pass, but instead it's the only ones they have are Delta or something else. And trying to figure out how to make the best decision on the first couple of cards you get, I think, because the way I think about it is I don't want 600 credit cards in my pocket. Even if they don't have annual fees, it feels like there's a bill that's going to sneak up on me somewhere that I'm not expecting. So how do you manage all of your cards so that you don't miss a payment? Because that's one of the things that'll get you into trouble.
Yeah, absolutely. So for me, I really, I'm a spreadsheet person as well. I have a spreadsheet with every card when I'm paying, when the annual fees due, things like that. So I'm kind of a data geek, so I feel you. I understand. But what I like to do, so there's really two things. One, I always 100% every card I set up automatic minimum payment just in case I miss a payment. I don't think I've missed a payment in 10 and a half years, but you al always automatic, do an automatic payment just in case you mis miss something, you'll end up paying a little bit of interest, but you won't take a credit hit. So that's the first thing. And then the second thing I like to do with almost, I'm trying to think, I don't never want to say definitively, but I think almost every card you can literally just call in and set up your payments for whatever day you'd like.
So I can tell you all my cards, every single one of them, the payment day is, the payment date is due on the first of the month. So I know the night of the 31st, I go in, I check all my cards, I make sure everything's paid off, and that's how I do it. So it's once a month thing and I spend maybe an hour going in, logging in, making sure everything's paid off, making sure there's no fraudulent charges, making sure this, that and the other. So instead of worrying about balancing all these cards and when a payment's due and with one time, one time a month, about an hour, and I have a lot of cards, so most people won't spend an hour, but an hour go in, double check, ba bing, ba boom, and you're set. So it's a lot easier. It's a lot easier if you have a process in place.
So now is the perfect time to take a break in this episode, let you absorb some of that great information that Brandon gave to us. And if you want to follow up on any of the information that we have on this particular episode, then just head out to travel fuels life.com/podcasts. Look for episode 28 A and get the links to the FB Z Elite Facebook group finance buzz.com. And also, I've embedded a great video that Brandon put together. It is a full explanation as to what credit card points are really worth. And I think you're going to understand that video even better now after the conversation that we just had with Brandon. So checked it out, some amazing information, and it's all right here on Travel Fuels Life. It's Travel fuels life.com/podcast episode 28 A. And next week on episode 28 B, we're going to dig even deeper into loyalty programs.
So make sure that you're around and check that out. Subscribe to the show if you haven't subscribed already. And do you love stories? Do you enjoy whiskey? Well, I've got a brand new podcast in the works just for you, and it's called Whiskey Lore, and you'll be able to hear it coming up this holiday season in 2019. So stay tuned for that. It's going to be available on Apple Podcasts and Google Podcasts and everywhere that you download podcasts. And it's also going to email@example.com. You may want to bookmark that right now. That is whiskey-lore.com. And you can also follow my whiskey travels at instagram.com/whiskey lore kashian that particular iteration. So check it out, whiskey stories coming here as part of Travel fuel's life, but a bit separate under the whiskey lore banner. And until next time, have a great week. Safe travels and thanks for listening to Travel Fuel's Life.