What is Credit Card Point Hacking?

Read time: 12 minutes

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One of the things that you probably have learned about me is that I am a nerd when it comes to credit card points.

And I can remember the reason why like it was yesterday…

It was 2015 and I had just received a combined 120,000 bonus sign-up points from my first two credit cards.

Within 15 months, I was on my first international business-class flight to Asia - paying less than $100 for taxes and fees.

I was hooked.

But this wasn’t always my thinking.

In fact, I grew up watching my family members use their credit cards…

…and then complain about how much the credit card companies are charging in interest.

My old way of thinking was simple: avoid credit cards because they are bad.

My new way of thinking: If I’m going to spend $1, I’m going to get the most back I can for it.

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What is credit card point hacking?

If you aren’t the most technical person, it’s okay - this has nothing to do with computer hacking.

Credit card point hacking is when someone uses a credit card or multiple credit cards to optimize the points received from using the card.

When you are looking at the various ways you can buy something, you probably think about:

1. Cash. This one takes no explanation. But one thing to keep in mind here is that when you spend cash, you receive what you are paying for - and that is it. There is nothing received from the action of each dollar that is spent.

2. Debit card. When you open a checking account, you may have the option of receiving a debit card. This allows you to spend the amount that is within the account without needing to withdraw it to cash first. There are some companies experimenting with debit card rewards, but generally, again, there is nothing received from the action of each dollar spent.

3. Credit card. Now, this may not be as easy to get as the other two options, however, if used in a certain way - you will be rewarded for the action of each dollar spent. This is the largest difference between a credit card vs. cash/debit. Sure, you’ll also build a credit score as well, but that’s just a side perk.

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Example: $1,000 Dining Spend

Let’s say you spent $1,000 eating out over the past two months going to your favorite restaurants and coffee shops.

Payment Method	Amount Spent	Reward	Reward Value	Point Redemption Value	Total Return
Cash	$1,000	-	-	-	$0
Debit	$1,000	-	-	-	$0
Discover It (Cashback)	$1,000	5%	$50	-	$50
Chase Sapphire Reserve (Points)	$1,000	3%	3,000 points	$0.03/point	$90

Purely looking at the scenario from a rewards-to-value standpoint. Does not include things like annual fees, existing balances, interest rates, etc.

Now imagine these rewards across the amount you spend in other categories like travel or shopping, but not just for this small time frame - but over the span of months or years…

…It’s a substantial amount of rewards!

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How do you earn credit card points?

There are usually two categories that most credit cards will fall in:

1. Cashback Reward Credit Cards

These are the credit cards where you’ll see a promotion like 1% Cashback for every $1 you spend or with a sign-up bonus like Get $500 back when you open a card with us!

Yes! Getting cashback for every $1 you spend is great. But this is NOT what I found to be the best.

With the cashback cards that I have had, like the Chase Freedom credit cards, there are some instances where it’ll be my go-to, but ultimately the points I earn from these cashback cards will be converted into a point reward program.

2. Point Reward Credit Cards

These are the credit cards where you’ll receive points for each $1 spent based on a specific spend category. They are similar to the cashback cards, but instead of cash, you’ll receive points.

For me, point rewards are where the magic happens.

Why? Because each of these points can be redeemed for a value that is ABOVE the equivalent of $0.01!

This is where the term point hacking comes in. We are trying to optimize the earning and spending of points.

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How to redeem your points

Reward Portal Redemption

When redeeming your points, one option is to use the credit card company’s reward portal. These are typically a simplified list of options that include cash back into your bank account, statement credit against your credit card, gift cards, or travel bookings.

Here’s the thing: When you redeem this way, you’re usually getting the baseline value - around $0.01 per point.

Transfer Partners

The other way that some credit cards allow point redemption is through a program called Transfer Partners.

This is where you can unlock more value from your points!

This is where you take your points from your credit card point balance and transfer them over to a partner loyalty program. From there, you can redeem the points for travel, hotel stays, and other perks.

The value of each point through transfer partners can be significantly higher - sometimes $0.02, $0.03, or even more per point depending on the redemption.

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The 3 Requirements Before Starting

Before you start down the path of point hacking, there are a few things that you should have in place:

1. No Credit Card Debt

If you have any existing credit card debt, STOP.

Do not apply for any more credit cards. The interest rates on credit cards are astronomically high, and any rewards you earn will be wiped out by interest payments.

Focus on paying off your debt first using the debt snowball or avalanche method.

2. Pay Your Statement in Full Every Month

This is non-negotiable.

If you cannot commit to paying your credit card statement in full every month, point hacking is not for you. The interest charges will destroy any value you get from points.

3. Have a Budget

You need to know how much you’re spending and in what categories. This will help you choose the right cards and maximize your rewards.

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Card Recommendations by Level

Intro Game: Chase Freedom Cards

Cards in this category:

• Chase Freedom Unlimited
• Chase Freedom Flex
• Chase Freedom Student
• Chase Slate Edge

What makes these cards worth it?

• Little to $0 annual fee
• Great redemption portal through Chase Ultimate Rewards
• Good entry point to the Chase ecosystem

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Mid-Game: Chase Sapphire Preferred (“CSP”)

What makes this card worth it?

• Would really put this one in the middle of both the Chase Freedom Cards and the end-game card, Chase Sapphire Reserve
• The lower annual fee is a lot less to manage than the end-game cards
• Some of the benefits and perks that you typically may find with end-game cards

Note: Chase does have some restrictions regarding their new cardmember sign-up bonus where you can only receive the signup bonus for one of their Chase Sapphire products within a given timeframe. Advice reading the fine print before finalizing a decision.

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End-Game: Chase Sapphire Reserve (“CSR”)

What makes this card worth it?

• Hands down the benefits and perks can make this card worth it by itself
• Some instances where there is a multiplier when spending your points, so they can go even further!

What can be a downside to the card?

• High annual fee

Note: Having both end-game cards from Chase and American Express may NOT be worth it. Recommend really evaluating if your spend vs. annual fee makes sense.

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American Express Cards

Note: AmEx sign-up bonuses are limited to one time (unlike some others that may allow you to receive another sign-up bonus after a few years). Advice looking for an above-average sign-up bonus before applying.

Intro & Mid-Game: AmEx Gold & Rose Gold Card

What makes this card worth it?

• A lower annual fee than the American Express Platinum with bonuses in spend categories that a majority of people will typically use
• Access to the Membership Rewards redemption portal and transfer partners for redeeming points
• Some, but limited, perks and benefits with the card

End-Game: AmEx Platinum

What makes this card worth it?

• Hands down the benefits and perks can make this card worth it by itself

What can be a downside to the card?

• High annual fee

Note: Having both end-game cards from Chase and American Express may NOT be worth it. Recommend really evaluating if your spend vs. annual fee makes sense.

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Summary

Point hacking is about being intentional with your spending and maximizing the rewards you receive for money you’re already going to spend.

The key principles:

1. Never carry a balance - Pay in full every month
2. Know your spending categories - Choose cards that reward how you actually spend
3. Understand point values - Transfer partners often provide more value than cash redemptions
4. Start simple - Don’t overwhelm yourself with too many cards at once

Happy point collecting! ✈️

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This article is for educational purposes and not financial advice. Please consider consulting with a licensed professional before making any financial decisions.