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YAY for rewards credit cards!
So I’ve written about travel hacking, and about why I’m not afraid of credit cards. By now you know that I actually love my credit cards. And you know that I think you should probably learn to love credit cards for their rewards value as well.
Just apply for them and get approved and start loving them!
But, not always that easy right?
Can’t get approved for a rewards credit card?
When I started reading about rewards credit cards it seemed sort of disappointing to me that the only people who can benefit from them are the people who can qualify for them. Often, to do that, you have to make a minimum of $120,000.00 per year. (Yes, I understand that it would be pretty irresponsible if credit card companies just handed out cards to everyone with no regard for their credit abilities. It was just disappointing.)
I’m over here like, if you’re making 120 grand in a year, you don’t need credit card rewards.Travel hacking isn’t necessary for you. Just budget better and buy the plane tickets.
Maybe flat out lying about your income on those application forms is an option, but it seems like a bad idea to me. I’ve never tried it and I don’t plan to.
I do not make one hundred thousand dollars in a year. (I personally don’t make a quarter of that actually, but since some credit card applications allow for “household” income, it would be misleading to say that I put <$25,000.00 on those applications. But even combined, believe me, our household income doesn’t touch that $120,000.00 mark.)
And sometimes, I have been denied rewards credit cards I want because of this. But not very often. (Actually, only with visa, and I’ll explain why).
The back door trick to getting a rewards credit cards – with a “low” income
If you are responsible with your money, you can totally get an amazing rewards credit card, and all the rewards that go with it. Even if you don’t make much. (And I’m not afraid to suggest this, because the credit card company likely won’t actually give you one if you haven’t proven you can handle it.)
You might be one of those people who can qualify today – like me – or you might need to work towards this, but either way… rewards are in your future! YAY!
First you need a freaking fantastic credit score. (Find out what your credit score is for FREE at Credit Sesame. If it’s not great then you might need to improve your credit a bit before you can really take the next step.) I don’t know exactly what credit score would be required, but I know mine is over 800. If you are already winning at credit then you are half way there! If you aren’t winning at credit, then you really shouldn’t be trying to get approved for credit cards that require a massive income. You should be trying to improve your credit, with one card that has an itty bitty limit. Period.
But assume you do have that freaking fantastic score – and one of the ways you have built it is with a basic free card, one with no perks, one that you have often increased the limit on and always kept paid off. Maybe you’ve held this card for 5 or more years. The company that issues this card trusts you, and they think of you as a good client. (BTW it’s better for your credit to hold cards a long time. If you have a free card you got when you were younger that you don’t use anymore, don’t cancel it, just put it away.)
Find a rewards card that is issued by the same company and backed by the same credit company as your basic free card. For example I had a BMO Airmiles Mastercard. I got it when I was 18, I used it often and paid it off every month. It started with a 500 dollar limit and I increased the limit over the years whenever they invited me to. And I really really wanted the BMO World Elite Mastercard.
( ↓ not a link, a screen shot just to demonstrate what I’m talking about here)
That particular card requires a personal income of $70,000 or a combined income of $120,000.00. Sigh.
BUT. With my freaking awesome credit rating and my solid long term relationship with BMO Mastercard, getting the card was really. really. easy. I never even filled out an application.
I called them and asked (nicely) to transfer my little free card to their fancy not free card. There is no way that BMO was going to turn down an opportunity to take my money since they already trust me, and I currently give them no money. I asked nicely again and got all the perks that come with applying for the card as though I was a new customer. First year fee waived and 30,000 welcome bonus points (or $300 travel credit). And that’s on top of the regular every year perks, like a free priority pass lounge membership, travel insurance, and the ability to earn 2% back for travel with no blackout dates.)
Believe me, when we are free-lounging in the airport, we stick out a bit. We LOOK like we make half of what everyone else in the lounge makes. But whatever, we always laugh about that and then drink the free drinks until we think we fit in. (Kidding!)
So, I should mention that if you did this and you wanted to cancel the card after a year to avoid paying the fee the second year, you could probably call and transfer back to a no fee card. But don’t cancel it if it’s your oldest running card. That would be detrimental to your credit.
I’m never declined for a Mastercard, never declined for an Amex. But I’ve never held a Visa (because I never saw a need to before I learned about travel hacking). So I have been declined for every major rewards Visa that I’ve applied to.
If I want to dig into the Visa rewards, I’m gonna have to start with the itty bitty free Visa, and work my way up.
If you have been trying and failing to qualify for a rewards card the traditional way, maybe this could work for you? Let me know if it does (or doesn’t) – I’m very curious!
P.S If you’ve been approved for some awesome rewards credit cards and don’t have a clue how to use those points and miles – I bought Nomadic Matt’s book the ultimate guide to travel hacking. This is an awesome resource, and I absolutely recommend it!