Best Frequent Flier Card Strategy For Light Spenders

I came across an exceptionally well worded question about reward cards over at Flyertalk. I thought I would take a moment to answer it it detail. The question is:

I am trying to decide on the best frequent flyer / credit card strategy to meet my goals and travel / spending habits. There are so many choices it’s dizzying!

Goals:

I would like to earn enough rewards to pay for vacations for myself and my wife. We usually like to go for about one week per year, usually in the United States (especially to national parks). We would also like to visit Israel at some point.

I would like to be able to earn enough to pay for the whole vacation – flights, rental car, hotels. For the Israel vacation this is not necessary because we can stay at relatives, so I just need to earn enough for the flight.

I do not care about getting upgraded seating on flights or getting other amenities.

Travel / Spending Habits:

My wife and I travel 2 or 3 times per year roundtrip from BWI to LAX (~ 4,650 miles direct, up to 200-300 more miles with stopovers). We usually use United, US Airways, Northwest, or Southwest.

We do not frequently stay at hotels or rent cars except on our yearly vacations.

We are not big spenders. We currently spend about $1,500/month on living expenses, with any extra money we make going towards investments.

The approximate monthly breakdown is as follows:
$850 rent & utilities
$230 insurance
$70 gas
$350 groceries

My wife has 32,750 miles with Continental, 11,000 with United, and 10,000 with American. I have 4,800 miles with Northwest and 2,500 with United.

I have excellent credit so I can usually qualify for the best credit card deals.

I’ve looked at the following credit cards: Individual airlines cards, Starwood Preferred Guest, CapitalOne No Hassle Miles Ultra for Professionals, and a combination of Citi Premier Pass Elite and Citi Dividend cards.

What would you suggest as the best strategy for me?

I am Glad You Asked

First, as someone who regularly visits Israel and stays with family, I know exactly what you looking at. First, take a minute to read the answer I gave regarding a similar query about using reward cards to travel to Israel. It sounds like you are based near Baltimore Washington International airport (BWI), therefore, you really don’t have any non-stop flight options to Israel in your area since El-Al ended it’s service to Dulles a few years ago.

That said, you have several domestic loyalty programs that will get you to Israel either directly or through their partners. Since, as you say, you are not a big spender, there is not a whole lot of miles to be gained with a reward card, so you want to choose it and use it very wisely. At this point, I would stay away from Delta/Northwest. Sadly, their frequent flier miles are loosing value nearly as fast as the Zimbabwean Dollar. Just last night, I booked a ticket for travel to Israel for 230,000 in business class, yet even their coach tickets were 190,000 SkyMiles. Most airlines are offering them for half the price. Delta claims to offer a lower tier for rewards to Israel, but it is rarely available. When I went to Israel last year, my wife and I used, with great difficulty, 230,000 United miles for two business class tickets to Israel on United’s partner Lufthansa.

What we learned was that United miles are very difficult to use on their partners due to Starnet blocking. A better strategy would be to fly US Airways and accumulate points in their program. If you have to fly United, simply ask for your mileage to be credited to your US Airways Dividend Miles account. Since they are both members of the Star Alliance, United will credit your US Airways account. Even better, that trick will work with Continental, they will soon be joining the Star Alliance.

Work For Those Miles

If you are going to travel very infrequently, you can take a less direct route to your destination in order to earn more miles. Perhaps your next trip to LAX on US Airways can go through Charlotte, for example. Obviously, both you and your wife will want to get the US Airways credit cards with their considerable sign up bonuses. You may also consider getting her a Continental Airlines reward card as well, if only for the sign up bonus.

I would recommend the American Express Starwood card as well. Starpoints can be easily converted to miles with dozens of airlines, including both US Airways or Continental, with 5,000 point bonus for every 20,000 points transferred, making it an effective 1-1.25 exchange rate. In addition, it is also an awesome hotel rewards card as well.

Use Every Trick In The Book

Once you commit to a strategy focused on a single program, like US Airways, leverage every opportunity to earn rewards. Charge every expense possible, no matter how small, so long as you always pay your balance in full. Look for dining, hotel, shopping, and rental car offers everywhere. Often you can get miles simply by getting an insurance quote, or signing up for an email list. I’ve seen car dealers hand out coupons for miles when you have service done, and there is even the famous story of the Pudding Guy.

With your limited travel and spending, getting a free vacation will take some work, but if you are clever and persistent, you can make it happen. Take it from me, your wife’s uncle’s fold out couch in their Tel Aviv apartment is much more comfortable when you flew there for free.