(Last year I decided January was the ideal month to discuss ways to save money. If you can manage a few cost-saving tricks during the winter, a vacation is more easily affordable when the weather turns warm. Here are the best tips for 2011.)
Excellent Credit Rating - How It Works
If you have an excellent credit rating, you undoubtedly receive credit card solicitations from airlines with whom you have a frequent flier account. (If you don't receive offers in the mail, give the airlines a call and see what's available.) The companies offer a free round-trip flight or a certain number of frequent flier miles for agreeing to use their card for a certain number of purchases within a particular time period.
For example, I got a free round-trip flight on Southwest Airlines for simply agreeing to sign up for and use a Southwest Visa card one time. Yes, only once!
The American Airlines deal is even better. I made $2,000 worth of purchases on their card within the first four months, and I received 50,000 frequent flier miles, enough for a round-trip flight to Europe in the off-season, October 15-May 15.
An extra bonus with American is that they threw in a companion ticket which means David and I can both fly anywhere in the United States, round-trip, for the price of one ticket. The only requirement for using the two-fly-for-the-price-of-one offer is that the flight must cost $300 or more before taxes.
So, for using the new AA card instead of my usual card to make regular monthly living expense purchases (gasoline, drugstore, groceries), I will receive a free trip to Europe, and my next trip back to North Carolina to visit family will only cost half as much as usual since David and I will split the cost of one ticket.
The Well-Disciplined Aspect
After I met the requirements for both cards, I put them away and plan to cancel both of them before the next membership fee is due. Since I did not get carried away, paid the balances immediately so no interest fees were incurred, and used the cards only until I met the requirements, these trips will cost just a one-year membership fee which is $59 in the case of Southwest and $85 for American Airlines.
I don't know of any cross country flights that cost only $59, and a flight to Europe for $85 is unheard of!
These flights won't be yours immediately as requirements vary to receive the rewards, but if you plan ahead and don't mind waiting a month or two to save hundreds of dollars, you will have the cheapest “fares” available!
I worried that my actions might not be ethical. Was I cheating the airlines or the credit card companies by taking them up on their extraordinary offers? Cheap flights are a balm to my travel budget, but I want to be able to sleep at night, too. Luckily, I ran into this passage in The Tightwad Gazette II which eased my conscience. Amy Dacyczyn, the grandmother of all tightwads everywhere, writes on page 168 about accepting generous company offers when there's no intention to follow through with a long-term commitment:
Some readers have argued, “What if everyone took advantage of the companies this way?” All successful businesses carefully monitor the profitability of their marketing strategies, and they withdraw any offers that lose money. As long as companies continue these offers, rest assured that they are still hooking customers.
So don't feel guilty about being a smart consumer. It helps to keep businesses more competitive and therefore to offer you lower prices in the end. And by taking advantage of the freebies that successfully lure naïve consumers, you may contribute to that company's withdrawing the offer, and consequently to sparing a few stupid fish from getting hooked.