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Most people think traveling is expensive. Growing up, I thought this too. In the last 25 years, we only took 1 family trip. We never had family trips to Six Flags or Disneyland (although, before I was born, they did enjoy Disney World without me… grrrrrr). But I don’t blame them, we were particular where we spent our money and flying is just too expensive…. or is it? That’s where travel hacking comes in.
Welcome to the Wonderful World of Travel Hacking!
Travel hacking allows you to pay next to nothing for flights and hotels using points. You still have to pay for taxes and fees (usually ranging between $10 – $25) but it sure beats paying for your whole trip in full.
And the easiest way to do this is by taking advantage of credit card sign up bonuses, not just once, not just twice, but MULTIPLE TIMES (this, my friends, is called credit card churning). These bonuses often equate to $500 – $1000 of FREE TRAVEL! How awesome is that!
Now I know what you’re thinking – aren’t credit cards bad? Only if you misuse them. Sure you get a small hit on your credit report for that initial inquiry and having a new card. But over the course of several months, your credit score will jump back up to where it once was, and will continue to increase the longer you have your card.
But before I tell you how to do it, there are some VERY IMPORTANT rules that you should follow to make this work:
1. PAY YOUR CARDS OFF IN FULL EVERY MONTH!
This is the most important thing to remember! You should NEVER EVER EVER carry a balance and accrue interest on your credit cards. This defeats the purpose of earning miles. The amount of interest you accrue will be more than your points’ values.
2. DON’T SPEND MORE THAN YOU NORMALLY WOULD WITH CASH/DEBIT
These cards require you to spend money within a certain period of time (ex. spend $4000 in 3 months to get 50,000 points). Just because you want to reach that amount, doesn’t mean you should go on a shopping spree and buy $3000 worth of shiny new toys to meet it. Budget and plan your future expenses and see if they fit into the minimum spend requirement, not the other way around
3. BE ORGANIZED
Keep track of your expenses, your points, when you signed up, when you receive your bonus, and your airline membership numbers. Spreadsheets are your friends. So are online programs such as Award Wallet
4. HAVE GOOD CREDIT
Before you even THINK of signing up for rewards credit cards, you should have good credit. And I mean having a credit score of 700 minimum. Having 730 is a good average. You can get a better idea of your credit score using Credit Karma or Credit Sesame (or even your current credit card company, they may have a credit score tracker).
5. DON’T SIGN UP FOR CREDIT CARDS IF YOU NEED TO GET A LOAN OR MORTGAGE IN THE NEXT YEAR
These are more important and signing up for credit cards may lower your chances or increase your APR on these big loans. While it’s definitely possible to still sign up for credit cards and get a good mortgage, err on the side of caution and skip credit cards for now.
The Good Stuff: Getting Your Credit Card and Getting Your First Free Flight!
So how do you get started with travel hacking? For all you lazy people (I admit, I’m one too) here’s the TL;DR:
- Sign up for a rewards credit card (we recommend the Chase Sapphire Preferred)
- Meet the minimum spend requirement to earn your points (For the Chase Sapphire Preferred, it’s $4,000 in 3 months for 50,000 points with a $0 introductory annual fee at the time of this writing)
- Redeem the points for your FIRST FREE FLIGHT!
- Repeat with our list of the best travel rewards cards (coming soon)
As your first travel hacking rewards card, we recommend the Chase Sapphire Preferred card to really get your travel hacking started because of the large sign-up bonus. At the time of this writing, it’s 50,000 Chase Ultimate Rewards points after spending $4,000 in 3 months. That may sound like a lot but that’s only $1,000 a month on your credit card. Some things to help you reach that minimum spend are:
- Monthly Rent (oh and I know everyone living in Hawaii pays A LOT for rent)
- Phone Bill
- Auto Insurance
There are tons of things you normally pay for that can help reach that goal. You can also ask your friends or family to see if you can pay for their expenses and give you cash in return (and that’s why I always like to pay card at restaurants).
Once you reach your minimum spend, you should be receive your bonus points in the following billing period’s statement. Now the fun begins. You can log into the Chase Ultimate Rewards portal and look for flights to book using your points! It’s as simple as that. With the CSP (Chase Sapphire Preferred), each point is worth 1.25 cents so your 50,000 point sign up bonus is more than enough for a round trip flight to Disneyland! Or if you’re creative, you can use even less on the same flights by transferring your UR points to partner airline miles! There’s a lot of ways to get the same flight for free (and use even less points) but we’ll discuss that in another blog post.
So there you have it. Travel hacking in a nutshell. Having these points aren’t just about going to places that you could never afford. Now you can go to that family reunion in another country, surprise your family across the Pacific Ocean (we did this to Joel’s Mom), or even have that interview out-of-state when you’re thinking of moving (yup, that’s what I did!). Take that first step but remember to have self-control on your spending. Take it slow and soon you will be able to experience a whole new world!
Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in you sail. Explore. Dream. Discover.
– Mark Twain