Credit Card Referrals: It Just Might be Better to Give than to Receive

A great way to get miles or points with almost no effort is to refer friends or family members for cards that you carry. Chase, American Express, and Capital One all have very active referral programs. Examples include:

• If you hold a Chase Sapphire Preferred or Chase Sapphire Reserve card, you will get 10,000 Chase Ultimate Rewards points for referring a new cardholder once their application is accepted. If used with transfer partners, these points could be worth $150-200.
• Holders of the Chase United Explorer card can get 10,000 miles per successful referral. These points would be worth $150 or more.
• Those holding an American Express Gold Card can get 10,000 Amex Membership Rewards points (worth up to $200 if used with transfer partners) for referrals; the referral bonus for the Amex Platinum is 20,000 MR points.
• The referral bonus for those with an Amex Delta Gold card is 7,500 Delta SkyMiles (worth about $75) per successful referral.
• Capital One offers a 25,000-mile referral bonus for holders of the Venture X card.

These programs are fairly simple to use. The card issuer gives you a unique referral link that you can copy and send to others, and they can take it from there. If the friend applies and their application is approved, the bonus miles or points appear in your account. In addition to creating unique referral links that you can copy and paste, American Express also offers the option of sending emails on your behalf. Of course, if you use this option, you are giving someone’s contact information to American Express so you should ask for their permission.

A few years ago, these programs tended to be capped at 50,000 miles or points of referral bonuses per year. Now, you can collect as many as 100,000 miles or points in referral bonuses annually for some cards.

It is important to note that the points or miles you receive from referrals are treated as taxable income. Sign-up bonuses and the points or miles you accumulate from your credit card purchases are not taxable because they are essentially a rebate – you must spend money to get them. But, miles and points for referrals are truly free so, if you get a referral bonus during a year, you are likely to get a 1099-MISC in January of the next year. Typically, the value stated on the 1099-MISC is reasonable (often one cent per point) and you should be able to get that much value or more out of the points/miles.

When we create a Travel Rewards Optimizer plan for you, we do not take referral programs into consideration unless we know it can benefit you directly. The bottom line is helping you get to your next vacation faster and at a lower cost. However, if the credit cards we recommend happen to be linked to a referral program, we will bring it to your attention so you can do a small favor for a friend or family member if you are so inclined. In fact, I have recommended credit cards that I do not hold to clients, and later asked those clients to refer me so they could pick up a few thousand free points from my application. It all adds up in the points and miles game, and it can be better to give than to receive.

We are ready to help you turn your routine credit card spending into the travel of your dreams.