Qantas Points & Credit Card Churning

Hola and welcome to The Summit, my weekly newsletter where I share my unfiltered thoughts on navigating the peaks and valleys of adulthood. From health and relationships to productivity and purpose, consider this newsletter a collection of naive wisdom from a 20-something year old summiting the mountain of life.

Today: Introduction to The Wonderful World of Qantas Points & Credit Card Churning

Growing up I was always told NO credit cards, credit cards = bad, and this was further cemented by Scott Pape's attitude against credit cards in his book, The Barefoot Investor. So, I never even looked into them.

But it wasn’t until a good mate of mine started yapping on about his Qantas Points, that I thought I’d give it some quick research, and I stumbled upon the website ‘Point Hacks’ - I was blown away.

FREE FLIGHTS!?

Oh, and free travel insurance too!? 🤯 

Having spent near 10k on these in the last year alone - I was hooked, and if you are interested in travel, you will be too.

Point Hacks holds just about all the information there is on the topic (for Australians), but I will break it down for you re-Qantas Points (QPs). For some perspective, this how much some common flights cost in points (Qantas Points Calculator):

*This is my favorite deal that I will elaborate on later.

Now, would you believe that (at the time of writing) if you meet the requirement on the Qantas AMEX Ultimate Card, you get 70k QPs! Also, if you refer another interested person (if you think it’s right for them of course) AMEX will give you another 40k QPs. So, from ONE credit card and a couple referrals you could fly free AROUND THE ENTIRE WORLD. Or to Bali and back 3 times! Whatever you fancy.

Before researching, my understanding was that you only ever get small amounts of points based on what you spend; for example, spend $1000 and get 1000 points (1/40th of a Bali trip – quite underwhelming). However, the honey is in the HUGE credit card signing bonuses.

Generally speaking, at any given time, there are a handful of cards out there with great deals, ranging from 60K to 100K signing bonuses (the deals change frequently). However, there are a few catches to be aware of: the minimum spending requirement, the annual fees, and sometimes requirements to hold the card for 12 months (which I tend to avoid). I'd recommend doing your own research here, to find cards with the biggest signing bonus, the lowest fees and smallest minimum spending requirements. At the time of writing these are my favourite deals:

* cost is partially offset through rewards (at least in my eyes)

Once you find a card your happy with, the application is pretty straight forward and before you know it you’ll be flying FREE - ish!

More on the around the world ticket:

It feels illegal in my opinion because how can such a good deal exist? In a nutshell, if you book this ticket you get up to 35,000 air-miles with Oneworld Alliance airlines over a period of 12 months with a maximum of 5 main destinations - but you can get pretty crafty with loopholes 😎. For all the information, Point Hacks has written a great page on this here. This deal is what I saved my points for, and I will be redeeming come July! It still blows my mind that these are all possible itineraries under this deal:

My itinerary (28,390 miles):

Example of someone who used short layovers to maximize free mileage (31,786 miles):

Example where someone used MANY layovers in Europe (34,343 miles):

All flights are fantastic and cheap using points, but in my opinion, the around the world ticket is for sure the way to go!

My tips/learnings:

• If you plan on using points to travel, start trying to earn points at LEAST 6-12 months before you plan on booking flights. This will give you enough time to meet the spending requirements and for the points to come through to your Qantas account (this can take up to 3 months alone).

• Use credit cards for big purchases. The more big purchases you make the quicker you can meet the requirements, stow the card away and not be tempted to use it irresponsibly. Ask your family if they have any big purchases or bills coming up, my mum let me use my card for my sister’s school fees - too easy!

• Don’t forget that most cards come with free travel insurance - which is usually really expensive. However, know that you have to purchase the flight tickets with your credit card or linked Qantas account to access this benefit. Also, check the PDS (policy disclosure statement) for all details, I did this and found that Amex even has snow sports coverage 🤩.

Things to note:

• Churning can adversely affect your credit score if you churn too fast (this happened to me lol). Keep this in mind if you plan on buying a house in the next couple of years as it could impact your borrowing power. However, using credit cards can also boost your credit score when you make all your payments on time 🫡.

• THEY ARE DANGEROUS - I see how it’s easy to fall into the trap. My advice/thoughts (I am no financial advisor) is to earn the bonus points then stop using it. Also, know that the banks do not want you to pay it off, they want you to make minimum payments and fall forever into debt! This was made clear to me when I asked AMEX if I could clear my debt each week (good habit) and they told me that it was not recommended... LOL. I was able to do this FYI.

• Flights aren't completely free when using points because there is always an extra fuel levy to pay when booking flights (Point Hacks has a great page on this). For example, the $188 below:

• There are a limited number of 'points seats' available on each flight. Consequently, using points is only really effective if you are flexible on travel dates. For example, do not assume BNE – ZQN will be 14,400 points every day, that deal is currently only available on a select few dates in the month. The further in advance you book, the more seats you will tend to find however in my experience, changes can occur daily!

There is so much more to learn on this topic. As mentioned, I think Points Hacks is a great resource, but so is the PDS of each credit card itself.

Happy Churning.

PS. On Scott Pape’s Barefoot Investor. I think it is an exceptional financial resource however, from my understanding, Barefoot targets a more general financial audience (hence his safe recommendation to avoid credit cards). This reminds us that "some books should be tasted, some devoured, but only a few should be chewed and digested thoroughly" - Sir Francis Bacon (17th Century English Philosopher).

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