Wednesday, January 06, 2016

Flying for free

You know those fake Facebook pages that your friends keep sharing? The ones that promise stuff like free first class return airfares to London or a free luxury Pacific cruise? They're obvious scams, because I'm pretty sure Qantas' Facebook page has more than 3,000 likes (not to mention the absence of the blue tick verifying authenticity). But I can understand why people fall for them. Who wouldn't love a free holiday?

Look for the blue tick - and 774,632 likes is more what you'd expect for a big brand.
Well, the Facebook contests might be bogus, but sit tight and let me show you how easy it really is to accumulate enough frequent flyer points to make your dreams come true.

When we returned from our trip to Europe in July 2014, I had 8,800 Qantas points from our flights. In April 2015, I still had 8,800 Qantas points. Then I started pursuing points in earnest, with the result that my balance is about to tick over to a smidge over 100,000 next week.

First of all, I have to give credit to Point Hacks for teaching me some of the finer details of maximising my accruals. I highly recommend signing up for their email course to make sure you're not missing out on some great bonus point earns. And they're quick to notify subscribers of new deals that you might have otherwise missed.

Personally, I enjoy hunting down the best deals and am happy to read all the fine print to figure out what works best for me. But you don't have to join every airline or hotel loyalty scheme or obsessively search out new ways to earn. If all you want is to earn enough points to get yourself on a free return flight somewhere, or take advantage of a free upgrade from economy to business class, this is my best tip: Make your credit card work for you.

Assuming that you're a credit-worthy applicant and that you spend at least a couple of thousand a month on groceries, fuel and utilities*, this is your best bet. You could be earning between 0.5 and 2.0 points per dollar spent. First, pick your preferred airline - in Australia, that's going to be Qantas or Virgin (unless you do a lot of overseas travel), so I'm using that as an assumption here. Join their Frequent Flyer program and then start researching which credit card is going to give you the best return.

Start with the Point Hacks credit card guide to see what's on offer. Also go to your airline Frequent Flyer site and check out what they have listed. Qantas has a handy comparison tool on theirs now.

How do you choose the right card? It will depend on your personal circumstances, but here are my criteria:

1. The sign-on bonus has to be at least 20,000 points. The more, the better (obviously). I've just been credited a handy 50,000 points from my last credit card swap and I'm now eyeing off 80,000 on another.

2. The earn rate on purchases needs to be a decent amount. I spent ages getting a lousy 0.5 point per dollar on my old Mastercard, before I twigged that I could get an American Express card issued on the same account, which earns me 1.25 points per dollar. Not everywhere accepts Amex, and some places add a surcharge, so in those cases, I still use the Mastercard, but that one little tweak has greatly increased my points earn. Some cards have an earn rate of up to 2 points per dollar.

3. The annual fee needs to be waived or at least seriously reduced for the first year. Since I'm not planning on keeping the card for a whole year, I won't be paying a cent. Sometimes it may be worth paying a fee if the earn rate and the sign-on bonus are high enough. This current Amex deal is actually pretty good, in spite of the $249 annual fee. That's a personal call, of course.

4. There has to be an interest-free period (usually between 45 and 55 days, depending on the bank's billing cycle). We put all our supermarket and fuel purchases on the card, plus gifts and anything else that we know we will pay for before the interest-free period is up. Then on the due date - and not a day sooner, because it's our money, Ralph - we pay the total amount off. The aim is to pay zero interest, of course. This is about getting FREE stuff, not being charged interest and fees along the way.

5. The minimum spend to get the sign-on bonus needs to be achievable. The one that I took advantage of recently required a spend of $5,000 in three months, which we might have managed under normal circumstances. Maybe. But with Christmas shopping added in, I knew I'd hit that target with no problem at all. I spotted a deal last year offering a handy 40,000 points with only a $500 spend though. It pays to keep an eye out and read all the fine print.

Take me awaayyy! (image source)

I also did some of my Christmas shopping online. The Qantas Points online mall is a portal to numerous retailers (David Jones, Oroton, Lorna Jane, JB Hifi, to name a few), that allows you to earn Qantas points on your purchases. In the lead-up to Christmas they were offering some mad deals with up to 10 points per dollar spent, which I took advantage of. I paid with my points-earning credit card, and earned even more. Total win.

There are lots of other ways to earn, but having the right credit card is by far the easiest way to earn without spending anything outside your normal expenses. I'll be swapping mine again shortly to grab the next big bonus deal.

Before you do anything at all though, check your current credit card and see whether you can earn frequent flyer points with it. If not, see if your bank offers a product that you can switch to, however you may not be eligible for sign-on bonuses with your existing bank - they usually restrict them to new customers.

My grand scheme is to earn enough Qantas points to get me a premium economy (196,000 points) or preferably business class (256,000 points) return fare to Europe. Relying on clocking up points from actual flights is not the greatest idea. My return flight to Jordan on Qatar, a Qantas partner, earned me exactly ZERO points. Why? Because I bought a sale fare, which didn't qualify for any Qantas points (sometimes the price is so good, it's worth taking a hit on the points front). Our cheap-arse Jetstar sale flights to Proserpine earned me a measly 1,600 points. It would take me approximately forever to accrue enough the old-fashioned way, by flying.

I'm also a Virgin Velocity member, and I take advantage of their bonus deals from time to time too, but Qantas is my main airline. It pays to focus mainly on one loyalty scheme, if you want to cash in sooner rather than later. We're not especially fans of Qantas, but we do love Emirates, and luckily heaps of codeshare Qantas flights are available with them. Plus, Emirates fly to just about everywhere from Dubai, so there's plenty of choice of destinations.

If you can't trust yourself not to run up big credit card bills, or you don't have a solid enough credit rating to apply for new cards, don't despair. Hotel stays can earn you airline points too, as can car hire, wine purchases, movie tickets and online shopping, as mentioned above. There's even a bank account that earns Qantas points. Spend some time reading the info on your airline's website on all the ways you can earn points; you might be surprised.

I seriously encourage you to sign up for the Point Hacks email course (just type your email address in the box near the top of the home page) to make sure you're not missing out on something super-simple that won't cost you a cent. It breaks the whole thing down into small chunks, that will take you 10-30 minutes at a time to read and understand, delivered to your inbox daily. Then just start earning.

You could be sitting next to me in that business class seat on the way to Rome. Or San Francisco. Or Santiago. Or Tokyo. :)

*Check the card T&Cs, because some cards don't award points on BPay transactions. 



Liz N said...

Thank you Kekky, this is simply awesome. Thank you ~

Kek said...

You're most welcome, Liz. 😊
It seems crazy that banks give away these huge chunks of frequent flyer points, but they're relying on people not paying off the balance owing on their card each month. If you're savvy and quarantine the money you spend in a separate savings account until the payment due date, you really are getting something for nothing.

Sara said...

Brilliant! I have to re-sort my Airpoints gathering as my credit card just STOPPED their relationship with Air NZ! Now they give some sort of boring old cashback bonus system. People were really upset and they clearly lost a lot of customers because I got a personal call from my apparent personal banker just to apologise and to fully explain the new system. I'm still considering changing, just because of the Airpoints.

Kek said...

Definitely look into it, Sara. The funny thing about "loyalty" schemes is that you don't actually get rewarded for being loyal, at least in Oz. Swap credit cards regularly and you'll be cashing in. It's nuts.

Michelle said...

So the trick is to kill the card before the 1yr period?

keith said...

Thanks for the extensive linking to Point Hacks and your support!
-- Keith

Kek said...

Yep. Close it and apply for the next good deal wit a sign-on bonus. :) I keep one credit card with my main bank but these are basically secondary accounts that I only use for the points, then get rid of. Read the T&Cs, you may have to keep the account open for a period after receiving the bonus points (often 2-3 months), but I just cut the card up and go back to using my main account as soon as I get the bonus points.

Kek said...

No worries, Keith - I've earned more Qantas points in the past three months, thanks to your tips, than in the entire previous year. And I'm happy to share my "secrets".

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