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Today is the day there will be a major pivot on this blog going forward.
If you know our story, you know that we paid off $61,000 worth of debt in only 16 months after realizing something needed to change when we went on our honeymoon broke.
That $61,000 broke down as two things: 2 brand new cars and credit cards.
(I know you’re like “get to the free travel man” but this is important I promise)
After paying off our debt, I promised myself that I would never buy a brand new car at least until I became a millionaire and that I was done with credit cards for good.
I got a credit card.
See I travel a lot for work and I don’t have a company credit card. I didn’t like spending the money out of our main bank account and waiting on the reimbursement because it made budgeting weird.
So I got a credit card.
I was very strategic about the whole thing too. I knew if I was converting over to the dark side, I wanted a card that would give me maximum rewards and allow me to travel for as close to free as possible.
And I’ve finally figured it out and put it into practice so as always you guys are getting the details here.
Travel Hacking: What Is It?
Basically all travel hacking means is using the rewards you earn from your normal, everyday spending to travel for as little money as possible.
We traveled to NYC for the 4th of July. Our place was right in Times Square with a beautiful view of the Empire State Building from our 27th floor suite.
We didn’t pay a thing. As a matter of fact, the only reason we paid for the flights is because I had already booked them before learning about travel hacking.
No worries though.
We used even more of our points to pay for flights to Orlando next week. The total cost there was 22.40 in taxes and fees for the 3 of us.
Truthfully speaking, I’ve been blown away by how simple this whole process is.
There are 2 key ways to to go about travel hacking.
One involves using loyalty programs and the other relies on credit card points.
I’ll be going over both on this post.
Travel Hacking With Loyalty Programs
Literally every single major airline and hotel chain has some sort of loyalty program.
These programs are designed to keep your business with that particular brand instead of their competitors.
I’ll be honest- the rewards come SUPER SLOW when you rely solely on loyalty programs…even when you travel a few times per month like I do for work.
But, in this game, points are points and combining your loyalty program points with your credit card rewards can trigger some explosive travel hacking discounts.
These loyalty programs often have some additional perks like free nights after so many stays, free or discounted luggage, and more.
My recommendation is to sign up for as many loyalty programs as possible and never travel without making sure you get your points.
Like I said, using the loyalty programs are a really slow game. So this means you’ll get much further picking a brand and staying loyal than you would using a different brand every time.
Right now I’m using Hilton for hotels and Southwest for flights. But you better believe that if a different hotel or airline comes in significantly cheaper due to a sale of some sort, I’m going to switch for just that trip.
Travel Hacking With Credit Card Points
So a lot of you are wondering how I scored 3 plane tickets for 22.40 to go along with a hotel in Times Square for free.
Well the answer is using the points from my credit cards.
It’s super simple to do, but it’s also not for everybody.
As a matter of fact, if any of the following apply to you, travel hacking with credit cards may not be the best fit for you.
- You already have consumer debt (car payments, credit card debt, student loans, etc) that needs to be paid off.
- You don’t have any type of budget or plan for your money every month.
- Your credit score isn’t at least 700 or higher.
- You’re planning to buy a house within the next year or two.
Also, you need to be sure that you’re spending only what is necessary every single month. That means groceries, gas, monthly bills, etc.
Don’t go into debt for stuff you can’t afford just to take a vacation from the job you need to pay for the stuff you couldn’t afford. That’s backwards.
Plus the money you’ll pay in interest every month will wipe out the value of any potential rewards.
So again, make sure you can pay off the bill in full every single month.
Now let’s get to the strategy.
My Travel Hacking Strategy
My personal goal with travel hacking is to utilize the rewards I get from large sign-on bonuses to pay for airfare, hotels, and other travel expenses.
I receive the sign-on bonus after reaching what’s called a minimum spend.
So, for example, a credit card company may offer me 50,000 points if I use their card to spend $3,000 in 90 days.
If I’m able to be flexible with my travel dates and locations, I can expect to get up to $1,000 in travel from the 50,000 points.
The $1,000 is a 33% return on my $3,000 which is much better than the standard 1-3% cashback credit card companies advertise.
The best part is being married I get to do this twice. We open one card for my wife, reach the minimum spend to get the reward, then open the same card for me before we move on to a new card.
That brings me to the next point.
The Best Travel Hacking Credit Cards
Now this is solely my opinion based only on the cards that I’ve personally used. What works for me may not work for you, so make sure you do a little research for yourself.
The reason I preface it that way is because minimum spends differ. Some people may not be able to meet a $4k minimum spend in 3 months.
This means you need to look into travel hacking cards with lower minimum spends.
Again, don’t do anything that will cost you more money than you normally spend or else you aren’t really saving money.
Also note that some of these cards have annual fees. My favorite card has a $95 annual fee that is billed on the first statement.
Some cards have annual fees up to $450. Don’t worry, they come with awesome perks that make it worth it if you’re traveling A LOT.
But that just reinforces my point that every card is not for every person so you have to look at the details objectively.
Here are my favorites
Chase Sapphire Preferred
Most travel hackers start with this card right here and for good reason. They currently offer 60,000 points after you spend $4,000 within 90 days of opening the card.
This can get you at least $750 worth of travel if you’re flexible.
One thing to note: the 90 days starts on the day you open the card, not the day you receive it.
I love how Chase allows you to be super flexible by giving you the option to transfer your points directly to some of the most popular airlines and hotel chains too. This proves to be very valuable in the booking process.
But you have to know that once you transfer points away from Chase Ultimate Rewards, you cannot transfer them back in so make sure your plans are finalized before you do so.
Also, it’s important to start with Chase cards if you can because Chase has what’s called a 5/24 rule.
This means if you apply for and open 5 or more cards in a 24 month span, you will be denied regardless of your credit score. And that’s not just Chase cards- that rule applies to any credit card applications you’ve filed.
Being an authorized user counts towards the 5/24 rule as well. Avoid adding your spouse but still make sure they get their own card.
The Chase Sapphire Preferred Card does have a $95 annual fee that is applied to your first bill so make sure that’s in your budget.
This was hands down my favorite card so far.
You can sign up for it by clicking here.
Southwest Rapid Rewards Credit Card
Southwest has a great travel hacking card for folks who can’t hit a big minimum spend but still want to get in on the fun.
You’ll get $40,000 after spending $1,000 in the first 3 months when you sign up for their Plus card. Also, the annual fee is only $69 for this particular card.
Here’s what I like about the Southwest cards though:
All of the points you earn go towards the accumulation of their companion pass.
And you want the companion pass.
The companion pass allows you to bring a guest on a southwest flight for just the cost of taxes and fees.
Using points and our companion pass together is what allowed us to book 3 flights for $22.40 this summer.
Another thing to note: although it’s not branded that way, this travel hacking card is a Chase card and would count towards the 5/24 rule.
If you’re focusing on domestic flights, the Southwest cards are a can’t miss.
You can sign up for a Southwest card by clicking here
In terms of travel hacking, you’re going to get maximum value with the Chase Ink Business Preferred card
Once you spend $5,000 in the first 3 months, you will be awarded 80,000 Chase Ultimate Rewards points which are transferable to over 13 rewards partners.
There is also a $95 annual fee with this card so be mindful of that.
You can sign up for the Chase Ink Business Preferred Card by clicking here.
Travel Hacking Tips
First things first you have to not let yourself get overwhelmed.
There are a lot of different options out there for cards and tons of advice on the subject of travel hacking in general.
Start with a goal in mind and things will get clearer to you.
Like do you know you want to take the kids to Disney next year? Create a plan for that.
Do you know all of your flights will be domestic for now? Consider the Southwest cards early on.
Or maybe you’re looking to go to Europe next year. Then you may want to skip the Southwest cards for now.
Your goals will clear up your travel hacking priorities.
Don’t feel like you have to rush through this. Remember being flexible and patient can help you maximize your rewards.
Also, you have to be organized when you’re travel hacking.
To help me keep track of my rewards and progress, I use the free service from AwardWallet.
This level of organization will help you stretch your points even further.
You can sign up for AwardWallet free by clicking here.
How To Hit The Minimum Spend
Remember, the goal isn’t to go buy a bunch of stuff you don’t need. Paying interest just for discounted travel defeats the purpose.
Doing that can ultimately cost you more money than it’s worth.
Instead, we are going to only use our travel hacking cards to purchase everything we would normally buy. That’s it.
Here are some tips to help you out:
Plan around a large purchase that you already saved money for.
If you’ve already saved the money for a large purchase like a new laptop, car or home maintenance, etc, you simply put the purchase on your card used for travel hacking and pay it off immediately. This level of planning can also help you decide which card to get as well. If I had a $4,000 home repair coming, I may be more inclined to get a card with a higher minimum spend and reward bonus for that particular time.
Pay Your Insurance Premium Upfront
Most insurance companies will give you a nice discount if you pay the entire premium upfront. If you’re due for a renewal soon, start saving the cash now to be able to make the total premium payment at one time with your travel hacking card and reap big rewards too.
Pay Your Bills With Your Card
Some bills you won’t be able to pay with a credit card. Others like electricity, water, and cell phone can help you reach that minimum spend. Again, these are bills you’re already budgeting for. If you’re getting close to a minimum spend and time is running out, you can also prepay certain bills if you have the money saved.
Pay Your Taxes
Another way to get travel hacking rewards is to pay your annual tax bill using your credit card. There may be a small processing fee for this, but if you were going to pay the fee with your debit card, you may as well gain some points.
Buy Gift Cards To Places You Frequently Visit
If you’re loyal to a certain brand and are a few dollars away from a minimum spend, you can stock up on gift cards. You can even buy those Visa gift cards that act as a regular debit card. Or you can buy Amazon gift cards for items like toilet paper, light bulbs, batteries, etc that you know you will need. But remember: make sure you have the money to pay the card off in full. A And remember we’re only buying things we would purchase anyway. This is why travel hacking may not work if you’re living paycheck to paycheck.
Will Travel Hacking Impact My Credit Score?
The honest answer is maybe.
Will you take a short-term hit by opening new cards? It’s quite possible that you will.
And it’s for 2 reasons: your credit history length goes down and the number of credit inquiries goes up when you open new credit cards.
But those two things are 2 of the 3 least impacting factors on your credit score.
Even still, if you’re planning to buy a house in the next year or so, you may want to hold off on the travel hacking with credit card rewards.
Over the long-term most peoples scores were either very minimally affected with others having their score go up over time.
You have to understand that the two biggest factors in determining your credit score are you paying on time and having low utilization.
So if you’re always paying everything off, you shouldn’t have any problems.
Closing The Cards After Redeeming Rewards
When or if you close your cards after redeeming your travel hacking rewards is completely up to you.
The most important thing is remembering to use your rewards before closing any card. That’s the worst thing you can do.
The least you could do is redeem them for cash, gift cards, or a statement credit. It won’t get you the maximum value for your points, but it’s better than losing them.
If you have a branded card like the Southwest Card those points are already out of your account. Just be mindful of where your points are.
Also, some cards come with great perks that you may deem worthy and want to keep.
So whether you close a card when you’re done or not is totally up to you.
There’s nothing wrong with closing an account at the 11 month mark to avoid the annual fee. Just make sure that decision doesn’t come back to bite you.
Final Word On Travel Hacking
Travel hacking is a great way to get out and see the world for very little money when done right. Remember, the goal is to only spend what you normally spend and pay off your balance every single month.
The basics to taking your first trip via travel hacking are:
- Create Your Plan
- Open Your Card
- Hit The Minimum Spend
- Redeem Your Points For Travel
That’s it. Don’t overthink it or allow yourself to become overwhelmed with the options.
Let the travel hacking begin!