Just last week, I finished booking the flights for the initial part of my adventure. I fly from Chicago to Austin, Austin to NYC, and finally, NYC to Norway. Grand total for all three flights: $16.20! Nope, that is not a typo. It, indeed, only cost me $16.20 to fly halfway across the country… twice, and then, fly over the Atlantic, across 6 time zones! I’ve had a few folks surprised at this price, so I decided in my downtime here in Indiana, I’ll write up a quick article to explain a few tips and tricks on how, you too, can use credit card signup bonuses to get $1,000s worth of free money for flights!

What’s my strategy?
Most major airlines will have some sort of miles program and will often partner with banks to offer branded credit cards. To get you to join their programs and use their credit cards, they usually offer great incentives. Sign up bonuses come in at anywhere between 20,000 to 100,000 points depending on the airline and current promotion. Getting these bonus miles though, does require you to spend some money. Each card is different, but on average it is usually required to spend between $1,000 and $3,000 in about 3 months. If you spend that amount anyway, those bonus miles are more or less free dollars in your pocket.

I believe the best strategy is to diversify. You’re going to want to have cards and mileage programs with multiple airlines as well as rewards programs with cards such as Chase Sapphire Ultimate Rewards and Capital One Venture. It can take a few years to build up the diversity, but the flexibility it provides is worth it. Prices for flights vary from destination to destination as well as from date to date. It’s good to have that flexibility when choosing which flight to use miles on. Programs like Chase Ultimate Rewards further increase this flexibility by allowing you to transfer points 1:1 to their partner airlines, which is what I did with my Chicago to Austin ticket. Some, like Capital One Venture, also offer you the opportunity to book on discount travel sites such as Kayak or Priceline and redeem points to purchase flights there. As long as it is travel related, you can redeem points to pay for it. You can often even redeem for purchases such as cabs or train tickets.

I would also recommend booking one-way tickets instead of round trip. Booking round trip offers no cost savings benefits and often times flying from A to B is cheaper on airline X, then the return flight is cheaper on airline Y. Booking trips this way can take a little longer, but you can really get some good savings by spending a little extra time shopping around.

Now, let’s explain how I managed to only spend $16.20.

Chicago to Austin
Browsing through the programs I have miles with, Southwest, American, British Airways, Delta, and Chase Ultimate Rewards, I found that Southwest was going to be the cheapest option. I had 5,806 points left in my Southwest Rapid Rewards account, but the flight would cost 15,050 points. It is incredibly rare to find a flight in the 5,000 point range on Southwest, so to prevent those 5,806 going to waste, I felt good about transferring 10,000 points over from my Chase Ultimate Rewards, giving me enough points to obtain the ticket. When booking with miles, you still have to pay money to the government in the form of a, “September 11th Security Fee,” that comes out to be $5.60.

Austin to New York City
After browsing those same programs, minus Southwest because I’m now drained of miles there, I find that Delta will be my cheapest option. My Delta SkyMiles account had 26,169 miles available. The flight I found cost only 10,000 miles. Perfect! To pay for the “September 11th Security Fee” this time, I used my Capital One Venture card. Because this is a travel related purchase, Capital One allows me to go back and redeem points to pay for that purchase. In hindsight, I should have done this for my tickets to Austin and to Norway, but I actually purchased the NYC ticket last of the three, and mistakenly didn’t think to do that for the first two. Total cost for the ticket to NYC: FREE!

New York City to Oslo
When shopping around for airline tickets, you can often click through the entire checkout process for using miles, all the way to just before entering in credit card info, to see what your out of pocket cost is going to be for the ticket. You will always have to pay some sort of fee when booking with miles. Whether it’s the September 11th Security Fee, fuel surcharges, taxes or other airline fees, it’s never totally free. After shopping multiple airlines, I found that booking with United would result in the lowest out of pocket cost. The price would be 30,000 miles plus anywhere between $10.60 and $50 in fees. Since I did not have a membership with United’s MileagePlus program, I decided to sign up for their airline credit card, which conveniently awarded 30,000 bonus miles upon completing $1,000 in purchases over the course of 3 months. A few bills were due, so this was easy to hit in a matter of days. Once the points were deposited into my MileagePlus account, I purchased the ticket. The flight I chose would land me in Oslo close to the time my group of friends would be arriving and was also the cheapest option, ringing in at $10.60.

So, there you have it. Three flights, just $16.20 out of pocket cost.

Two Tips on British Airways
There are two little quirks involved with booking with British Airways. One good. One bad. Let’s start with the bad. The one I learned the hard way. When I took my previous trip to Italy, I booked using my American Airlines miles. In off-peak season, it cost 40,000 miles round trip anywhere in Europe. British Airways is a partner of American Airlines, so when booking with miles, I could chose a flight itinerary that included flying British. I naively chose an option that flew me direct from Austin to London on a British Airways flight. When flying from the United States to anywhere in Europe or vice versa, British Airways incurs fuel surcharges, which can be pretty hefty. My out of pocket cost was $680, about half what a full price ticket would’ve cost. However, had I chosen an itinerary that had flown me on an American or US Airways flight to Europe, my cost would have been even cheaper, closer to $250. So be aware, booking international flights on BA using miles comes at a bit of a cost!

Now the good. You can book domestic American Airlines flights using your British Airways Avios miles at about 2/3 the cost. When you book a domestic flight through AAdvantage, the flat rate, one-way cost is 12,500 points. With British Airways Avios, 7,500. On top of that, because you would be flying domestically, there are no fuel surcharges, just the 9/11 Security Fee. One caveat, however, there are more blackout dates, so it’s not always an option. Either way, with a sign up bonus of 50,000 Avios points, the British Airways credit card comes out to be a pretty big value when booking domestic American Airlines flights.

On Credit Score and Having Many Credit Cards
I’ve heard several people mention that having a lot of credit cards is really bad for your credit score. Myth. I currently have 10 credit cards and have a credit score of 764. As long as you can control your spending and pay off your balances in full every month, your credit score doesn’t really suffer from having a lot of cards. It is true, though, that when you apply for cards, your score will take a small hit from the credit inquiries. Your score will generally recover over the course of a few months and the impact isn’t too drastic. However, each credit inquiry will cause a ding to your score. So if you plan to apply for multiple cards, do it all on one day. This drives up the spend to get all of the bonuses, but because the applications occur on the same day, it only appears as one inquiry on your credit report instead of several. This mitigates the impact the applications have on your score.

Annual Fees
Nearly all credit cards with good rewards programs or great signup bonuses come with an annual fee. This can range anywhere from $50 to $100 and beyond. Luckily, most of these cards, as an incentive, offer the first year waived. You will have to weigh the benefits of each card to see if this annual fee is worth keeping the card for more than a year. I find some are worth keeping, while others offer little benefit aside from the initial sign up bonus, so I give those ones the ax!

One last thing I would like to note: I am by no means the first to cover this topic. I’ve only just scratched the surface of information available out there for working the system of airline miles. A quick google search will result in a multitude of great articles. If you’re interested in racking up the airline miles, I recommend you do a few searches and read several more articles!