planning an international vacation
 

hello everyone, i am new to this forum and just signed up today and i am really excited that i found you guys. if i am posting in the wrong section please excuse me and kindly direct me to the appropriate sections.
i am a business owner for the past 9 years. i don't really own credit cards because i don't believe in carrying a lot of debt. i have been using checks and a Unionbank mastercard debit card. about a month ago one of my customers told me about how he used his Amex points to pay for his entire vacation to Bali. the more he was talking the more interested i became. now i just want to know if this is even possible. heres what i want to do
in december of 2013 i am planning a trip to vietnam for my wife and son. i want to fly business class because economy is aweful on a 17 hour flight.
my question is which card would give me the best chance of making my dream of a getting 3 business class tickets for an international flight using airlines points.
also does anyone know which bank's debit card offers airlines rewards? also i charge about $400,000 worth of supplies using checks and my debit card every year. is it even possible to earn enough points between now and dec. 2013 to get those business class tickets?

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Welcome to FT!

First, let me disabuse you of the idea that everyone who has lots of credit cards has lots of debt. I expect that there are many people here on FT who hold several credit cards, but always pay their bills in full every month to avoid paying interest.

It is impossible to predict whether you will be able to secure three Business Class award seats for travel to Vietnam in December, 2013. But you can certainly accrue the miles necessary to obtain those tickets, should they in fact become available. Obtaining credit cards with large sign-up bonuses, and then charging a lot on those cards is one way. Another way is to put $200K in a BankDirect "Mileage Checking" account, which would net you 240K AA miles in one year. (Note: BankDirect is imposing a $12/month service fee on this account beginning in January, 2012; but if you can keep $200K on deposit, the fee may be worthwhile.)

From which city will you be departing? To which Vietnamese city will you be flying?

thanks for the quick reponse. i am here in so cal so i wil be flying out of lax and headed to saigon. is been a while since i've been back to my homeland. i want my 2 year old to meet his grandparents before they pass away. the grandparents are pretty old and i really don't know how much time we have left with them. and i have a long 2 1/2 week vacation during dec. of 2013. being a business owner its almost impossible to get vacation so i need to make this as meaningful as possible. which cards do you recommend?

If you want to use credit cards, such as SPG AMEX, Citibank AA card, UA Visa, etc., and put $400,000 worth of items on them, you will be able to earn hundreds of thousands of miles. If you want to use a debit card, I don't believe any debit cards still earn miles (anyone can correct me). If you can pay off your credit card every month, then the only difference between a credit card and debit card is the grace period before paying (unless you lack self-control), maybe you just need to change your view towards credit cards.

thank you but, pardon my ingorance. i'm not too familiar with credit cards. whats a spg card?

SPG stands for Starwood preferred Guest. This Hotel group has an American express card which is generally considered one of the best cards for racking up miles. This is because the points you earn from using this card can be turned into airline miles with many different airlines (usually for a discounted amount of points) and/or it could be used for hotel stays with in the family of hotels.

American Express might also be a good choice for you as usually you are expected to pay off the entire balance each month which fits well with your outlook on debt. While you may pay a higher annual fee to American express to carry this card if you pay on time you don't have to pay finance charges (interest).

I am also a small business owner and I spent roughly what you do per year or maybe more. I can assure you I always fly business class or better and I travel a lot. Once you start earning this perk for what you are already spending anyway you will be kicking yourself for not doing it sooner!

great advice, the more i talk to you guys the more sense it makes to get a cc. i mean i'm already spending the money on day to day expenses. why not get rewarded. since i don't use a lot of cc, my credit score is very weak or young. i usually pay everything with cash. i mean i'm asian and we have a joke here that asians only deal with cash. someone told me that amex wont give me a cc without a long credit history. is this true?

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Don't know how likely you are to be approved for any particular credit card, but the SPG Amex would give you the most bang for your (spending) buck.

Other cards to consider are the Citi/AA personal Visa and Amex, as well as the Citi/AA business card (I forget if it's a Visa or an Amex). Although these cards only earn one AA mile per dollar charged, they often have substantial bonus-point offers for signing up, with waiver of the first year's annual fee. Note that this Amex card is actually issued by Citibank, not by American Express.

Look for threads here in the MilesBuzz! forum for information about current sign-up bonuses for the Citi/AA cards, as well as the SPG Amex card.

By 2013, AA's partner carriers to SGN should be Cathay Pacific, Japan Airlines, and Malaysian. AA currently requires 55,000 miles one way for a Business Class award between LAX and SGN. AA partner Finnair also provides seasonal service between Helsinki and SGN, but because of award-routing rules, going via HEL would require more miles than going via the Pacific.

i must admit, i am fascinated with the idea of having something like an all expense paid vacation just for doing everyday things like paying my vendors. i mean i had heard about it in the past, but it was almost like catching bigfoot. you heard about it but not actually knowing anyone who's seen one. so it is amazing to hear all the stories from you guys who have actually done it. please keep the advice coming. i'm like a sponge right now and i'm absorbing everything you guys have to say. does anyone know if amex or spg has check writing capabilities, since i pay my vendors with checks

With the SPG Amex card every 20,000 points (for spending $20,000 on the card) can be converted into 25,000 AA miles. Plus you get a 25,000 bonus points after opening this card (and spending $5,000 in 6 months)
Thus if you spend $400,000 on your SPG card it will convert into 500,000 AA miles (plus 25,000 opening bonus) - one round trip with Cathay to SGN in business is 110,000 AA miles - thus it would take 330,000 AA miles for 3 round trip business class tickets from LA to SGN. You could accomplish this well under one year. If you want to fly in Cathay business in Dec 2013, you should have enough points by Feb of 2013 (you should book these awards 330 days before travel to have best chance of getting award seats) - should be very easy with your spending.
Caveat, I am not sure if you must pay full amount of miles for a 2 year old - others will know better.
You have a lot to learn and should start reading here and educating yourself.
What's better than getting 3 business or first class round trip tickets to SGN for free? (i.e. for money you would spend on your business anyway) and have enough points left over for hotels as well.
PS You should open a business SPG card as you can document your business expenses easily.

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The only way you are going to earn substantial amounts of miles from spending is by putting the spend on credit cards. The credit-card companies charge vendors who accept credit cards substantial fees for the privilege of doing so; from those fees, the credit-card companies buy the miles/points that they award to their cardholders.

If your vendors will not accept payment by credit card, you're not going to earn a lot of miles (except for the sign-up bonuses) from those cards.

Do you currently have any credit cards which would show some sort of credit history? What about your wife? Before you get too involved in picking the right card(s) to use, you should try to figure out if you can qualify for them.

Next is looking at where you are spending your money. You say that you spend $400k per year through checks and your debit card. Most likely the spending you put on your debit card would be able to be shifted to being spent on a credit card. Expenses paid by check may or may not be able to be charged to the credit card, and it will depend on if the vendor accepts them or not. Vendors who accept credit cards pay a couple % in fees, which in turn is what pays for you earning the points. So they won't be thrilled at accepting a CC payment over a check.

Realistically, $400k in annual business spend doesn't necessarily mean you will be able to charge $400k to a points credit card. There are various cards that will give bonus points for spending in certain categories (i.e. the AMEX Business Gold gives double points for gas, advertising, and shipping) or cards that will give bonus for spending a certain amount in a year (i.e. Chase Ink Bold gives 47.5k bonus points for spending $100k on the card). Those can help build points faster when you can't put all your spending on the card(s)

As for not wanting to carry a lot of debt, there's no need to. If it makes you feel better, you could pay off your credit card balance at the end of each day. But there's no need to do this really, and as long as you pay off each statement in full by the due date, you will not be charged interest. With $400k in annual spend, you will probably have to pay it off more frequently than that in order to keep from maxing out the credit limit. With limited credit history, it's unlikely you would get the $40k credit limit needed. But with a $10k credit limit you could pay off the balance each week and be able to handle your spending. For single purchases over $10k, you could always call the CC company and pre-pay.

The good thing is that December 2013 is a long ways away and you have plenty of time to accumulate points/miles. The best advice I can give you is to NOT jump into anything right now, but take some time to browse these forums and maybe read up on a few of the blogs out there. The Points Guy has some great guides on earning points/miles and how to use them. He even has a whole beginner's guide section here: http://thepointsguy.com/beginners-guide/

At first there is so much information on these boards and it is a little overwhelming. But just read a little each day and things will really start to make sense. If you're willing to put a little time into learning more, after a couple weeks you'll be a pro with most of the answers yourself, and if you don't know the answer you will know exactly how/where to ask for it.

I'll echo the last comment about not jumping into anything too quickly. I think you should do the following:

1) Break down your spending. How much do you put on a debit card vs. checks?

2) Assume that nothing you pay by check can be shifted to a credit card. (As noted above, the vendor might not accept credit cards.)

3) Of the $_____ you spend on your debit card, are there any frequent categories? Shipping, advertising, gas, etc.?

4) Probably your best bet for flights, as others have noted, is to take Cathay Pacific. That means you're looking at 330,000 miles (110,000 per person x 3 people).

5) Also as noted above, you want to accumulate these miles by about February 2013. Just because Cathay offers tickets at 110k doesn't mean those seats will actually be available on the flights you want. Airlines release their inventory 330 days in advance, so you want to check immediately (the date you want to leave minus 330 days) after the seats are released.

6) NOW think of a plan of attack. One thing you could do is sign up for personal and business Citibank American Airlines cards. You can get two personal cards for yourself, and a business card for the business. This will net you about 150k AA miles right off the bat, because each card comes with a 50k sign up bonus. (Note, though, that to get the bonus, you have to spend a certain amount of money, either $1500 or $4000, within the first six months of holding the card. That means you would have to shift some expenses onto the personal credit cards.) If you got the sign up bonuses, then you need to accumulate 160,000 miles within the next 15 months. (Approx. $170,000 in spending -- 160k for the miles, plus about 10k to meet the minimum spending requirements to get the bonuses.)

Alternatively, you could get the Starwood Card. One downside to this card is that it is an Amex, and I've seen vendors who don't accept Amex. But you get a 25,000 signup bonus, and the starwood points can transfer to AA at a 1:1.2 ratio -- meaning 100k starwood points would get you 120k AA miles. I think the Citibank AA cards are a better deal for miles, but Starwood has the added bonus that the points can be used for (very nice) hotels.

By the way, the reason we keep talking about American Airlines is because AA miles can be used on Cathay Pacific. So you would rack up AA miles (via Citibank, the Starwood card, or elsewhere) first. Then in February 2013, go online and see what flights Cathay has from LAX to SGN. Finally, call AA in to say you want to book these particular flights.

Good luck!

Excellent advice from both you and roknroll.
A small correction - SPG transfer is at 1:1.25 ratio (20K pointsgives you 25K miles). Thus 100K points gives you 125K miles.
Addendum - you might have noticed that AA is in Chapt 11. This should not prove to be a problem (hopefully) as all other major US airlines went through Chapt 11 and came out stronger.

Oops!
 

Thanks for the correction -- yes, it's a 1 to 1.25 ratio.

To run the numbers a bit more. If you get three Citi/AA cards, you'll have 150k in bonuses and 160k in spend for 330k miles. You will have to pay for your own hotels, though.

If you get the Starwood, you'll have 25k in bonuses. To get 330k in miles, you'll need about 255k in spending (255k + 25k bonus = 280k, times 1.25 = 350k). Someone else can clarify if there's a minimum amount to transfer.

So Starwood will require more spending, but as noted before, will also allow you the flexibility of getting hotel points. It is also "cleaner", with just one credit card. If you are new to all of this, you may not want three different cards (Citi Personal Visa, Citi Personal Amex, Citi Business Amex) and you may not want, or be able, to put a small amount ($5500) of business expenses on the personal cards.

On the other hand, if you really want to go for it, you could get all four cards. Spend about $160k on the Citi cards for your miles by February 2013. Then, get a Starwood card and spend on it for the rest of 2013. By the time you get to December, you should have enough points for a nice hotel stay somewhere.

Also: if your relatives are anything like mine, they will insist that you stay with them and not stay in a hotel. If that's the case, you might save your Starwood points for a future vacation.

*Note: if you really want to get advanced, check out the routing rules on Cathay. You will get a stopover in Hong Kong for "free" (that is to say, for the same 110k miles per person). [This used to be the case, and I think it still is. Can someone confirm?] So you could visit family in Saigon (stay with relatives) and then spend a few days vacationing in Hong Kong for free (free stopover, free hotel with Starwood points). The possibilities are endless!