Imagine that you could take not one but multiple vacations per year for next to nothing! You can take your family to Disneyland, lay out on the beach in Hawaii or admire the history and art of world class museums in Europe.
Over the last 4 years we maximized credit card points to travel to Hawaii, Peru, Italy, Dominican Republic, Belarus, Mexico, Costa Rica plus many countless destinations around the U.S. We were able to score tickets to Europe for $100, stay in 5 start hotels, receive free car rentals, Companion Pass for 2 years that let us fly for (almost) free to most places in the U.S. and have access to luxury airport lounges just to name a few.
The reason why we were able to do it is because we became really good at travel hacking. We define travel hacking as ability to collect miles and points to redeem them for free travel.
I know that for a lot of people credit cards are associated with something evil that your parents tell you that you should never get because they will suck all your money. If you are not careful, you can get charged with ridiculous fees but you are good at managing money and stay very organized, you have nothing to worry about!
Steps on Opening a Credit Card:
Research top travel credit cards that fit with your travel style. Don't apply for Ritz Carlton card if you are not a luxury traveler or don't have any desire to stay in their properties. Find what is right for you.
Apply for a card online
Meet a minimum spend requirement (it can be a minimum of $500+ in the first 3 months). This spend is a requirement in order for you get the bonus offered on the card. Only apply for cards where a minimum spend requirement would be reasonable within your normal monthly budget. You don't want to spend more money that you normally wouldn't spend. Put all your normal monthly spending on the card and pay it all in full by the end of the month. If you are coming in short, you can always buy gift cards to a grocery store, gas, Amazon or even Visa gift cards that you can use to pay for anything.
Your bonus should be posted once you meet the minimum spend, typically by the next billing cycle
Figure out if the card if worth keeping by evaluating the annual fee (if any) on the card, what extra points it gives you for your normal day spending, any other extra perks that you might find useful (Uber credits, travel reimbursement, free hotel nights etc). If you don't think the card is useful, just call and cancel. No need to worry about your credit score. We have canceled dozens of cards over the years and haven't see any impact on our credit score.
We have been doing this hobby for about 4 years now and became very strategic about how we apply for the cards. We typically open 8 cards each per year based on the trips we plan to take. At the end of the year we evaluate what cards we want to keep and which ones we should close.
We maintain a spreadsheet where we keep all of our current cards that we opened, cards that we plan to open, annual fees and bonus points earned from each card. You don't have to start with as many cards as we do. Start with one card and if you don't want to go all crazy on travel hacking, you can keep the card you like and slowly keep earning points that you will redeem for travel.
Main Disclaimer: The key thing that I want to make clear is if you currently have credit card debt or have a history with spending more then you earn, this hobby is not for you. I repeat, this is not for you.
I also highly recommend to check your credit score if you already don't know what it is. You can create a free account with Credit Karma. I typically recommend that people have a score of at least 700 to get started.
So if you decided that this hobby is for you because you can manage your finances responsibly and have a good credit score, here we go!
How to Get Started
1. Start with 1 Beginner Card First
I found that at the beginning it can be very intimidating to start with this hobby. You might not know how all of this works and don't even get me started on Reddit threads on miles and points, because those guys speak a different language for someone who is new.
Make a goal to open just 1 card, test the waters and see how you feel. I promise you once you book your first free flight or a hotel stay, you will understand the power of travel hacking.
One card that we think is the best for anyone who is starting our is Chase Sapphire Preferred:
You will earn 50,000 points after spending $4,000 in the first 3 months from account opening
Earn 2X points on dining and travel purchases and 1 points on all other purchases
You can use these points to book travel through Chase portal which would be worth $625 or you can transfer them to airline and hotel partners
$0 annual fee the first year, $95 every year after that
Why We Love this Card:
There are no foreign transaction fees, so you can travel around the world without worrying about using this card
Trip cancellation insurance up to $10K
Auto rental collision damage waiver (we used it on all of our car rentals over the years)
Lost luggage reimbursement & baggage delay insurance
Your points are worth 25% more if you book any kind of travel via Chase portal
2. Sign up for Major Frequent Flyer Miles, Hotel & Car Rental Programs
One big mistake that I see a lot of people make is they book their flights and hotel chains and never bother to create an account with an airline, hotel chain or car rental program. It takes only a few minutes to sign up, but you can earn miles from each of your trips that adds up really quick.
Here are a few of the airline examples that you can sign up for frequent flyer program:
American Airlines: AAdvantage
Delta Air Lines: SkyMiles
United Airlines: MileagePlus
Hotel chains also have rewards programs, some of our favorite are:
SPG/Marriott: Starwood
IHG: IHG Rewards Club
Hilton: HH Rewards
Hyatt: World of Hyatt
Car rentals also have programs that we recommend for you to join:
Enterprise: Enterprise Plus
Alamo: More Rewards
Hertz: Gold Plus Rewards
National: Emerald Club
Some programs have points expiration dates that you need to be aware of. Make sure to keep track of all of your miles and points in a spreadsheet or sign up for Award Wallet.
3. Sign up with Dining Program to Earn Extra Miles When You Eat Out
United, American, Delta, Southwest and Alaska and other airlines offer programs that allow their members to earn miles at various participating restaurants. One caveat is you can only earn miles from ONE program, so you will have to pick one that you would like to earn all your miles from.
Signing up is easy, you can visit each airlines website and search for dining rewards. You will then pick a credit or debit card that you want to be associated with the account. Finally search for restaurants that are a part of the dining program in your area.
The great thing about this program is that you can double dip in miles or points. For example if you register your Chase Sapphire Preffered card on Southwest dining program, not only will you earn 2 miles per dollar from Chase, but also the extra miles towards Southwest through the dining program.
Below are the links to take you directly to some airlines dining programs:
American Airlines: AAdvantage Dining
Delta Air Lines: SkyMiles Dining
United Airlines: MileagePlus Dining
Southwest Airlines: Rapid Rewards Dining
Alaska Airlines: Mileage Plan Dining
4. Earn Extra Airline Miles by Booking through Rocketmiles
Rocketmiles is a third party website that allows you to earn thousands of airlines miles when you book a hotel room with them. You simply select what airline program you want to earn miles in and then search for hotels in the area where you are traveling. It's that simple.
For example you can book 1 week stay in Bahamas and earn 19,000 miles, in this case Southwest miles:
One thing to keep in mind is if you plan to have elite status with a certain hotel chain, your bookings via Rocketmiles won't count towards your status. So if you are Marriott or Hilton loyalist, you might want to book directly with those hotels to earn rewards and maintain your status.
5. Earn, Burn, Repeat Strategy
Once you become comfortable with having and managing at least one card, you can officially graduate to the next level of travel hacking "earn, burn, repeat". In simple steps, here is what it looks like:
You plan out what cards to apply for
Meet the minimum spend requirement
Earn bonus
Cancel a card within 1 year
Wait a period of time required by credit card rules (anywhere from 1-2 years) and apply for the same card again
Rinse and repeat as many times as you want until rules change
Key thing that I want to point out is that each credit card issuer has rules regarding how many cards you have opened in a given year and they might deny you if you opened too many. I'm not going to go into too many details about this in 101 post, but one that I will highlight is Chase 5/24 rule. This rule states that if you’ve opened 5 or more credit cards in the past 24 months (with any card issuer), they are NOT going to approve you for a new card. This is important to know for folks that are starting out in this hobby, because if you are interested in getting Chase cards, my recommendation would be to get them first before moving on to AMEX, Citi, Barclay etc.
Overall travel hacking doesn't have to be complicated. You can get 1-2 cards per year and just keep them for normal spend and be happy or you can slowly step up your game where you get 10, 20.. cards per year and enjoy all the luxuries that come with miles and points. If you have any questions about applying for credit cards or redeeming miles, please reach out to us! We would be happy to help you. Happy travels!
Comments