New to this - a few quick questions
 

Hi everyone. I'm trying to get into this whole thing after reading a lot about it, and hearing about it from some friends. However, the amount of info out there is really daunting, and the more I read, the more I get confused. I just have a few quick questions which would really help me get started :)

1. From what I can gather, 95% of the ways of getting miles and hotel points is through credit card promotions, is this right?
2. There aren't really any great hotel programs, except maybe Starwoods?
3. Most importantly - Mainly, accruing points is done through signing up for credit cards. I've heard both arguments - that it doesn't affect your credit at all, and that it does. Which is it really? I have an Experian service that gives me monthly credit reports, and in their glossary section, they very specifically state that too many hard inquiries (ie, when signing up for a credit card) within 2 years is a bad sign and lowers your credit score. Is this true, not true, what's the real deal?

These 3 questions are really all I need answers on before I move forward. Thanks so much in advance for any answers.

Credit card promos are the best deals going currently, with financial deals in second place. (See the latter on my Finance page on my website below.)

I like both the Starwood and the Prioirty Club hotel programs. The latter has a zillion Holiday Inns in Europe and around the world. It has a good 60,000 point credit card offer, good for at least two free nights. You can find this on my Credit Cards > Free Cards page.

Applying for credit will affect your credit score.

Welcome to FT!

1. This is true as long as you are excluding all literal frequent flyers. If you fly often for business, sport or leisure purposes than you would earn more flying than through CC Bonus Offers. For those of us who do not than CC's provide the best mileage earning potential.


2. Too broad of a statement. Depends what you are looking for. On this forum you can find threads full of diehards who will swear by each hotel point program. That their program is the best for them. Why limit yourself to one program when you can gather as many points as possible across all programs. This will not only increase the likelihood of finding an available room but also diversifying against program changes/devaluations.

3. It does impact your credit score. Short-term and long-term. That does not mean it is permanent or damaging. Usually your score will take small dings for each CC app and the more activity the bigger the hit. You should always guard your credit score and make sure that you are not exposing yourself too much. There are high frequency methods and those who wait for the big offers.

There are tons of CC app strategies on these forums and frequent flyer blogs. I suggest you read all of them and combine them into the method that works best for your financial situation.

I thought so too, since that's what everyone writes. But consider this - for the past 18 months or so, my wife and I have been applying for, getting, and cancelling as many cards as possible. I have lost exact count, but it is probably at least 7 or 8. About a week ago I checked our credit score and it is higher than it was when we started all of this churning. Go figure.

Yea I heard about the Priority Club one, although to be honest, I doubt I'll be in Europe much, so I think Starwood is the way to go. BTW, what are "financial deals"?

Thanks! :)

1. Makes sense, thanks!
2. Good points. I guess I will keep my eyes open for deals, but I think if I am forced to choose, I'd have to go with Starwood.
3. This is the only thing that really scares me about this. My credit rating is good, but in no way bulletproof (I'm currently sitting around 780), so I'm really paranoid about losing too many points.

It's not really a mystery how credit cards affect a credit score.

Start here: What's in your FICO score

You will see that there are items positively and negatively affected by applications.

Primarily, the negative effects are in the 10% allocated to "New Credit", including number of inquiries, recently opened accounts, etc.

As others have noted, there can also be positive effects. A major component of the score is "proportion of credit lines used" - i.e. balances vs. total credit extended. As you open more cards, you have more available credit, so your utilization of credit goes down.

Overall, though, none of this really matters, unless you need a mortgage or maybe car loan or rental application in the next few years. If no one will be looking at your score, why does it matter?

Good points. Although I have to wonder how much of a plus is it to have more credit, and how much of a minus to open up lots of cards. ie, after doing some more digging, I read that your credit score will go down 2-5 points for every hard credit inquiry. Also, I am reading that you should apply to 4-5 cards every 90 days. Does this mean that if I follow this schedule, I will lose a minimum of 40 points off my FICO each year, notwithstanding the gain from having more credit?

Also, does earning tons of frequent flyer miles translate into elite statuses? For example, on Continental Airlines, I know that if I fly a lot I'll get into their EliteAccess program. Will earning FF miles achieve the same?

Inquiries only stay on your report for 2 years. They also have a diminishing impact to your score as time passes toward 2 years. It's not a simple linear scale.

You also don't have to follow such an aggressive schedule. There are plenty of us who apply for one card every month or two. After you work through the excellent offers, you're left with a lot of mediocre offers. Is it worth it to chase down a few hundred $'s worth of points? And keep track of dozens of cards? Up to you to decide.

As far as having "too much" credit... it's rare to hear that as an issue. At some point lenders will stop offering additional credit. That's not related to a decrease in score, per se. Mostly their internal guidelines. But that can be an excellent opportunity to reallocate credit to overcome denials.

Generally no. Elite status is determined by "elite qualifying miles" (or a similar name), as compared to redeemable miles earned from credit cards.

Some cards offer EQM bonuses, such as some Delta cards. Occasionally that means enough to earn lowest level elite status. However, many of the airline cards offer many elite benefits without the status - such as free bags or priority boarding.

Hotel credit cards are a little different. Most offer a way to elite status through spending, either with a spending threshold or awarding "elite night stay" credit for certain spending.

Marriott includes Silver, and very high spending can earn all the way up to Platinum. Hilton can earn Diamond from spending. Priority Club is a rare program that counts all points toward elite, so an offer of at least 60k points means instant Platinum.

Look carefully at each offer to determine if it gives any elite benefits.

Often people think that the SPG card is only good for Starwood guests, and that's simply not true. The SPG is a very good primary card regardless of what hotel chain you stay at. With the points you get, you can either spend them on SPG properties using cash+points which is a very good deal, or get the flexibility of a ton of airline partners, at a 1:1.25 ratio.

Priority Club is also a good hotel chain to stay at, IC RA is unbeatable as a top tier program (though they don't honour elite benefits for award stays), and their PointsBreaks list is great for a bargain (mostly HI's but a couple of CP's and the odd IC or two)

Checking your credit score is not the same as a financial institution getting their version of your credit score for deciding whether to lend you money.

Great post, thanks so much! It's a bit of a bummer regarding EQM, although I figure that if you earn enough points, you can fly first class anyways without having to worry about elite qualification. Also, I see that airlines such as Continental have guaranteed perks when reaching 1 million+ miles, and from what I can tell this has nothing to do with EQM, which is great.

Thanks again everyone! :)

Nope. It's (almost exclusively) paid butt-in-seat miles. Used to be easier but they are changing at the end of the year. AA also used to count all points but that just changed this month.

You're right tho, easier to just redeem at first class levels and not have to worry about status.

As you noted above, if you use your miles to get biz or first class awards you would be getting most of the same benefits that an elite flyer has without having to invest all the money and time flying to earn it! You do not earn miles on award tickets.

The elite status benefits people who actually fly tons of paid fares so they get all the perks of being "first class" even if they only buy economy seats. If you do not fly a lot then elite benefits would be nice to have but not vital to getting the most out of FF programs.


Yea it would be cool to say you are lifetime platinum but you have to realize what value does it bring to your flying habits. It might be more cost effective to get those perks by booking biz or first class awards.