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If you’re lucky, this will be something that you find fun in a perverse sort of way. Like spreadsheets. But also, as with anything worthwhile, like investing, children, medicine/career of choice…there is an initial learning curve, which tapers off but does not truly plateau – some maintenance is required.

In this day and age of fantastic aficionados who will keep their pulse on the happenings for you, keeping up to date on new opportunities feels like it has never been easier.

For the purposes of simplicity, I will only be talking about Aeroplan miles in this post, as Air Canada/Star Alliance is one of the most popular for domestic and international travel, and Aeroplan is the easiest to collect points for.

Why Bother with Credit Card Sign Up Bonuses?

The goal is personal, and your answer may very well be different from my answer. And that’s okay!

For me, I like the idea of earning miles at a very low cost-to-mile ratio (without spending more money than I normally do anyways), and then spending miles at a higher cost-to-mile ratio by getting flights that would cost a whack-load of dollars in dollars but are much more affordable in points. The difference is more money in my pocket – again, without spending more money than I would have anyways. If I spend more money than I normally would have in order to gain miles, I would consider that a loss.

Earning miles at good, low cost-to-mile ratio happens more so with sign up bonuses. For example:

1. Get a card with all sorts of perks like lounge access, great insurance coverage, concierge service, etc. One example is the American Express Business Platinum, which is also tax-deductible for staff physicians, and potentially tax-deductible for residents depending on your situation. Yes, it does have a steep annual fee of $499 (D:), but the math does work. Hang in there till#3!
2. Spend money you would normally spend anyways (but maybe compressed a shorter timeline of 3 months vs 6 months) and meet the minimum spend requirement.
3. Earn 75,000 points that translates directly at a 1:1 ratio into 75,000 Aeroplan miles. The earning ratio of the cost (the annual fee) to miles (from the sign-up bonus) is fantastic when considering the kind of value it can be redeemed towards! Going into details about how to appraise value is a bit beyond the scope of this introductory post, but you can find more information here.

Spending miles at a more beneficial cost-to-miles ratio happens more easily when you treat yourself, for example, to a business-class or first-class flight. Something that would ordinarily cost 4x the amount of an economy class trip if paid for in dollars, but costs a little under 2x the amount of an economy class trip if paid for in miles. I have a trip coming up to Europe this summer and I’m eyeing that business-class seat as a goal. (Sadly, there is no first-class availability that I can find for this particular journey).

Just once.

I would love to fly luxuriously long-distance just once, for the life experience. And if it’s fantastic, then I might make credit card churning a regular part of my life – not spending extra money, but it does involve spending extra effort and attention.

So, spending miles on more luxurious flights is more “cost-efficient” in terms of maximizing the value you get per point spent.

But.

This might not be everyone’s goal. If your goal is to not pay for a flight or pay the least you can out of pocket for a flight, that’s fine too! Just be aware that miles are technically less efficient for that.

Another thing to factor in is where you fly out of. The major hubs of Toronto, Montreal, and Vancouver have pretty cheap economy flights to many places regardless so miles are generally really more worth it for the luxury flights.

For the rest of the people flying out of almost anywhere else in Canada, the travel hacking approach is worth it economically – even for economy flights. The flight I’m looking at for this summer has ranged between $990 and $1300 round trip, vs. spending 60,000 points for an economy class round trip flight or 110,000 points for a business class round trip flight. Right now, 110,000 points can be earned for free – see the Strategy section and My Progress So Far section below for details. So, all you are left with is paying for the taxes and any fuel surcharges – more on the surcharges later though!

Is This Too Good to Be True?

If you have a suspicious mind like me, that’s a reasonable question to ask. And I say, if the Globe and Mail can run an article on this without commenting on the legalities, I’m feeling pretty safe.

Everyone needs to make their own decision though!

The Strategy

To get the sign-up bonuses, you need to meet the minimum spend requirements. This can range from $1000 over 3 months to $7000 over 3 months. While there are legally grey ways to meet the minimum spend requirement *cough* manufactured spending, looking at you *cough*, I’ve honestly found that I’ve been able to meet the meet the minimum spends in a purely organic way so far.

One way of doing this is timing.

I’ve got exam fees to pay this year. So does Mr. Sparks. And let me tell you, those applications fees are hefty! Timing these cards just right, those fees ate away at the minimum spends pretty quickly.

I also have conferences to attend (yay!). Those require up front payment, and I will get reimbursed later. May as well pay for those with my new credit card that needs a minimum spend requirement met.

American Express is not taken at our usual grocery store of Superstore, so I switched to Walmart for a while. Man, Walmart is actually so much cheaper! Gotta be flexible with the vegetable selection, but otherwise, this switch has actually helped the grocery bill go down. Double win.

My suggestion? If you have known upcoming larger expenses, time your credit applications to be about two weeks or so before the window starts for your larger expenses. E.g. booking a vacation, conference, licensing fees, exam fees (MCCQE I and II, board exams), university tuition (if your institution takes credit card), etc.

Electives are also a ton of spending – you are looking at flights, accommodations for at least a week if not more, and eating out.

A big one for medical students is the CaRMS tour, when you traipse around the country for residency program interviews, bringing your carry-on luggage, suit, and your hopes and dreams.

You can also pay your taxes with a credit card, although you would have to take a 2.5% fee hit. (I’m not sure…but you could ask your accountant if the fee can be considered a business expense).

My Progress So Far

Goal: 220,000 Aeroplan miles. Enough for business class round trip flights to a Europe zone 1 country this summer for myself and Mr. Sparks.

February 2019: approximately 38,000 Aeroplan miles from ten years of previous flying.

Credit cards:

• American Express Gold Business – got this first card in February. Minimum spend requirement of $5,000.00 met comfortably within time limit. Of note, I would change my strategy if I could go back in time – I would have gotten the Platinum Business Card and followed this single-player or the double-player flow chart to maximize referral bonuses.
• CIBC Aerogold for Business– my second travel hacking credit card arrived at the end of February, right before the first-year fee waived promotion ended.
• TD Aeroplan Visa Business – applied for this third card at the end of March, before leaving on my two week, cross-Pacific trip. There were some paperwork glitches at the bank, so I’m still waiting on this. At the time of writing, the first-year fee is being waived for new applicants who apply before June 2. Take advantage if you can!
• TD Aeroplan Visa Infinite – got impatient waiting for the business card and applied a few days ago for this one online, approved. The card should be arriving in 5-7 days in the mail, hopefully. Again, at the time of writing, the first-year fee is being waived for new applicants who apply before June 2. Take advantage if you can!

I also pitched this idea to Mr. Sparks, who was down so long as I did the mental work behind organizing and tracking everything – fair enough!

• TD Aeroplan Visa Infinite – minimum spend also met in April from a combination of exam fees, licensing fees, and flights for an upcoming conference.
• TD Aeroplan Visa Business – applied for this card with together with me at the end of March, before leaving on the two-week trip. Also had some paperwork glitches, but his got approved faster than mine. Awaiting card in the mail.

Currently (April 22, 2019): 140,650 Aeroplan points approximately.

Over half way there, and only three months’ work!

Edited May 8, 2019: pro-tip from consistently awesome Dr. Networth: Ontarians, perk up!  The OMA offers pretty great promotional offers for the AMEX cards. There are a couple more perks associated with these even compared to the friend referral – they provide the same amount of sign up bonuses as the friend referral AND you get a statement credit (the types of statement credits vary). 

“But I’ve Tried to Redeem Miles Before and It Sucked”

Yes. I hear you.

We have all had frustrating experiences in the past trying to use miles/points. Some common problems:

1. Flight availability – I need to arrive by this day, but I’m looking a month ahead of time and there’s nothing available!

As soon as you know you need to a fly on a particular day, look and book if possible. Reward availability can be scarce.

2. Topping up with cash – I need just a few more points, but I tried topping up with cash and it was ridiculously expensive!

Yeah…the cost of buying more points is absurd. I would suggest signing up for a new credit card asap, ideally one that gives you a welcome bonus for just having the card if you are worried about meeting the minimum spend requirement in time for purchasing your flight.

3. Surcharges – there’s availability, I had enough points, and then when I click through to the final page, it tells me I have to pay $1000 in taxes and fuel surcharges! So not worth it!

It’s a money grab. No two ways about it. What to do? Look for a flight with a carrier that does not impose crazy fuel surcharges! Scroll about a third of the way down on this post to the heading “Avoid Fuel Surcharges”. That post is a great overview on how to use Aeroplan miles, if you are interested in exploring in more depth.

Will My Credit Score Take a Nosedive?

No.

There will be a temporary small decrease. This will come back as long as you continue to have good credit card behaviour like paying off all of your balance for each statement, not utilizing all or most of your available credit, and keeping your oldest credit cards open. Having different types of credit products (e.g. mortgage, line of credit, etc.) is also “good”, but I wouldn’t go opening those just for the sake of bumping up my credit score.

For more details, look here.

• FIREfly’s initial approximate credit score: 850
• FIREfly’s current approximate credit score: 830

Will keep you posted on what happens over time!

One Last Caveat

No one knows what is happening after June 2020 with regards to Aeroplan miles. Sure, the program will be around, and the miles will transfer 1:1 with the new loyalty program, but how much will each mile be worth? It’s quite different redeeming 60,000 miles for a round trip economy class flight to Europe vs. 100,000 miles for a round trip economy class flight to Europe.

Therefore, if you want to enter this game, with its current earning system and mile valuation system, now is the best time to start!

Overall Thoughts

So far, this seems like a worthwhile investment of my time and attention as far as application and spend tracking efforts. I already track what I spend anyways – it’s easy to just lift the spending off of one Excel sheet and plonk it into another.

I do have a staff physician friend who threw up his hands and said, “Why bother? I could just work longer and make the money for the flight as opposed to spending the time learning about all this.”

True!

I think there are two things that differentiate my position from his.

1. I do not have the option to work longer and make the money for the flight. At least, not in as reasonable a time to dollars ratio.
2. I enjoy figuring out this system. It’s kinda fun! The activity in and of itself is inherently rewarding, like any hobby voluntarily pursued.

Where does travel hacking fall in for you? Intimidating? Intriguing? Both?

Update: And here is the follow up post on what happened in the end!

-Dr. FIREfly