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I tend to collect credit card points with travel credit cards because, as someone who travels often, they're worth more to me than cash back. Even with the pandemic putting a hold on travel for now, I still find value in stockpiling these points for future trips.
Knowing that travel is so uncertain at the moment, I decided it would be best to focus on earning travel points that are flexible rather than earning with a specific hotel chain or airline. I chose two of the most popular travel rewards programs: Chase Ultimate Rewards® and American Express Membership Rewards®.
For one, I'd already been earning points with both programs for a couple of years. On top of that, the points are fairly easy to accumulate in both programs thanks to the long list of credit cards (with lucrative sign-up bonuses) that earn them. Both of these programs allow me to redeem my points for a variety of travel purchases or transfer them to a long list of airline and hotel partners.
Even though I slowed down my credit card usage this year, didn't spend as much in bonus categories like travel, and didn't go for the big sign-up bonuses I normally would, I still managed to accumulate 150,000 credit card points in 2020.
The three credit cards I used to earn 150,000 credit card points
I earned a total of 62,000 Ultimate Rewards® points and 88,000 Membership Rewards® points, all with three credit cards. Here's a breakdown of what I earned.
- Chase Sapphire Reserve®: 40,000 Ultimate Rewards® points. These points were all earned through regular spending. This is the primary credit card I use, and the 3x points on dining and DoorDash deliveries helped me earn extra this year.
- Chase Freedom Unlimited®: 22,000 Ultimate Rewards® points. I recently opened this card, and most of the points were earned through a sign-up bonus. You can earn $200 if you spend $500 in the first three months, and because I have the Chase Sapphire Reserve®, I can convert that $200 to 20,000 Ultimate Rewards® points for added value.
- American Express® Business Gold Card: 88,000 Membership Rewards® points. I earned the sign-up bonus on this card at the beginning of the year, which was 50,000 points if you spend $5,000 in the first three months. Then I earned the remaining 38,000 points through my regular spending.
My Ultimate Rewards® points are worth $0.015 each thanks to the 50% bonus on travel redemptions offered by the Chase Sapphire Reserve®, and Membership Rewards® points are worth at least $0.01 each when redeemed for travel.
Altogether, my 150,000 credit card points are worth at least $1,810 in travel spending. If I take advantage of the transfer partners both programs offer, I could easily squeeze more than $2,000 out of these points. I'd say that's a big win, considering the minimal effort I had to put in and the fact that my spending changed so much this year.
How to develop a credit card points strategy for 2021
If you're interested in stockpiling rewards, now's a good time to start developing a credit card strategy for next year.
The first thing you'll want to decide is what type of rewards you want to earn: cash back, generic points, or brand-specific points or miles. I opted for generic points because I like to redeem my rewards for travel but wanted some flexibility in how I use them. If you're loyal to a specific airline or hotel and expect to spend money with them in 2021, you might want to go for an airline credit card or hotel credit card. Finally, if you don't want travel rewards at all, a cash back credit card might be the best option.
Once you choose the type of rewards card you want, you should get a sense of what your major spending categories are. Pick a card that rewards the categories in which you spend the most money. Before the pandemic, I spent a lot on travel and dining, so the Chase Sapphire Reserve® was my mainstay. Just make sure that if the card comes with an annual fee, the rewards and benefits you'll earn outweigh that cost.
It's definitely worth keeping an eye out for the best sign-up bonuses and promotional offers. Rewards credit cards often run promotions that offer a limited-time elevated sign-up bonus, and they might target you with one of these. If you get one, and you think the card's benefits are valuable, it's worth applying. Just make sure you spend enough each month to earn the sign-up bonus.
If you're really hoping to stack rewards, consider applying for multiple credit cards throughout the year -- ideally getting a sign-up bonus each time. You can then rotate those cards depending on which one will earn you the most points on any given purchase.
Just make sure not to apply for too many credit cards at once, because it can affect your credit. I try to space my credit card applications out by at least three months, but most of the time I wait six months between applications.
With the right strategy, you could be earning thousands in credit card points next year.