Stefan Krasowski had a dream to visit every country on Earth before he turned 40. That took him to wondrous places, from the crystal blue crater lakes of Djibouti and the ancient Roman ruins of Tunisia to the foothills of the Himalayas in Bhutan.
And thanks to his considerable stockpile of credit cards, he was able to complete that dream and visit the one that eluded him — Syria. The moment his tourist visa was granted, after a two-year wait, he reached for his credit card.
"On one day's notice, I was able to be on a plane to Beirut and in Damascus by nightfall," he said.
Krasowski is part of a growing subculture of people for whom earning points has become a kind of sport.
And that's why Krasowski founded a group called Reach For The Miles in New York, a meetup of travel hackers and deal optimizers who trade tips for gaming the points system.
"I've taken out over 46 credit cards in five years and earned 2.6 million miles just in sign-up bonuses" said Janice Lintz, atravel blogger. She's a regular at Reach For The Miles and, like Krasowski, she's determined to visit every country in the world. She's at 135.
Earlier this month, she had just gotten back from Easter Island. The trip was great, but what Lintz really wanted to talk about was all the points she earned by flying there.
"So I'm not sure where I came out, but I think I may have been paid to go to Easter Island," Lintz said.
The tales of credit card gamesmanship can verge on the extreme. There's the guy who opened a credit card and immediately bought $3,000 worth of Amazon gift cards — just to qualify for the sign-up bonus. Another filled his garage with blenders to take advantage of a promotion offering extra points on appliances. One father even tried to enroll his newborn in a frequent flyer program only to be told the minimum age to start earning miles is 2 years old.
And they're not alone. According to the Consumer Financial Protection Bureau, nearly 90% of all money spent on credit cards last year went on rewards cards. And as points and miles have become more popular, so have website like Million Mile Secrets, Upgraded Points and The Points Guy, which help savvy consumers find inventive ways to maximize miles and points.
Meanwhile, card issuers have been pushing rewards in an effort to entice customers to borrow and spend more. For points aficionados like Lintz, it's just one more way to beat the credit card companies at their own game.
"I even make money paying my taxes," she said.
Points can open the door to extraordinary experiences for those with time and discipline. However, one survey found that nearly 60% of reward cards holders don't pay off their balances each month. That statistic troubles personal finance experts, because credit card interest rates are at a 25-year high.
Ron Strobel a certified financial planner, said clients visit him all the time, excited about all the points they're getting with new credit cards.
"They'll even pull that card out, and they show it to me, you know, like they're bragging about it," Strobel said. "They're so focused on the reward aspect of it that a lot of times I think they just look past the potential downside."
Many of those same clients just rack up debt, fueled by that little hit of dopamine they get each time they earn a point.
That's what happened to JD Malone. He and his wife got sucked into a rewards program a few years ago after opening a Costco cash-back card.
"It changed the way we spent money," he said.
For example, instead of buying a $2,000 couch, they settled on a $3,000 couch, mostly because of the excitement over getting more cash back from their purchase.
"The idea that I was going to get cash back made using the card easier," Malone said.
When they got their year-end statement, the couple found that they'd charged more than $40,000 on their Costco card. And for all that, they got about $600 back.
"It was painful, I mean, to be honest, it was sickening," Malone said. "We were like: This has to change."
Malone and his wife enrolled in financial literacy classes. They cut up about 18 credit cards. And they spend a lot less money. But they kept the Costco card. Just for emergencies, they said.
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