Sloth’s Travel Hacking Guide
There are entire forums devoted to the fine art of using credit card points to make thousands of dollars in free rides or travel hacks. People are really addicted to it, which made me assume that travel hacking was a labor intensive hobby that, like coupons , only paid off if you were extreme at it. I was wrong. Travel hacking is easy.
Although I have been using credit cards for a long time to receive cash back rewards, I did not open a credit card for the sole purpose of hacking travel until 2014. Since then I have booked flights to Hawaii, Tokyo, Texas, New York, Copenhagen. and a few more places that I probably forgot about.
I don’t spend hours figuring out which cards to use for specific purchases. I do not knock off cards (open a card, close, open another, repeat). My credit has not suffered – in fact, it has improved! (We’ll come back to that later.) However, playing with travel rewards can be risky, so if you want to play make sure you play responsibly. We have several guidelines .
Find a card with a big signup bonus
In 2014, I booked two flights from Los Angeles to Hawaii in Tokyo and then back to Los Angeles. Without going to Kauai, the whole trip would be free, but I paid very little anyway. All six stages of the flight cost me $ 400 and 45,000 points.
I used Chase Sapphire Preferred to get my 40,000 Sign Up Bonus. This huge bonus is the main way hackers are rewarded for free airline travel. The catch is that I had to spend $ 3,000 in the first 3 months after opening the card, which meant that I put all the purchases I had on the card: groceries, bills, almost everything except rent. This card also has a bonus for an authorized user. If I added an authorized user to the card, and he made at least one purchase, I would get another 5000 points. I added my husband and we got even more points.
There are dozens of websites out there to help you compare cards and find the perfect one, but the point is that most of the reward enthusiasts recommend the same basemaps :
- Chase Sapphire Sanctuary
- Chase Sapphire Preference
- CapitalOne Venture Card
- American Express Starwood Preferred Guest Credit Card:
- Preferred Everyday Amex Credit Card
They each have tens of thousands of check-in points, and some have other perks such as lounge access, free global entry, and the like. However, pay attention to the annual fee. Our Chase Sapphire Preferred card has a $ 95 annual fee (no charge in the first year). We later canceled the card to avoid commission. However, we did not do it right away, because we were still earning a lot of points …
Pay everything with your card (but pay every month)
Sign up bonuses are great, but most cards also reward you with points for the money you spend. You get 1-3 points for every purchase, depending on the type of purchase. I didn’t think these points would add up, but they added up. I earned about 10,000 points in the next year of owning this card, which was enough to earn me a couple of free domestic flights.
The key to this is listing all expenses on your credit card. As a writer specializing in personal finance, I jerk a bit when I think about it, but then again, if you play it carefully, it’s not that hard to win. Here are a few rules I follow when budgeting with a credit card:
- Pay your card in full and on time every month
- Always make sure that there is more on my checking account than on the card. However, my credit card balance versus my checking account balance is not a budget, so I also:
- Track all my spending with Mint.com.
This should be self-evident, but if you accumulate late fees and interest on your card because you don’t pay them in full and on time each month, “rewards” are completely meaningless.
Many reward lovers use different cards for different purchases. Bonus cards usually have “bonus” months during which they double or triple your points earned on certain expenses, such as restaurants. Some people who actually write these categories on their individual cards so they know which one to use for which purchases. This is too much work for me. It’s like buying from five different stores to save $ 10 on groceries. I use one good card for all purchases and I can still squeeze a couple of domestic flights out of it for the rest of the year.
Register before making a major purchase
Another way to hack the system? Take advantage of the bonus for registering a card before making a major purchase. My husband and I signed up for the highly publicized Chase Sapphire Game Reserve . It came with a huge 100,000 points sign-up bonus if you spend $ 4,000 on the card in the first three months. When it came to paying for the wedding, we had no problem getting that bonus and then some. (Again, we had already saved up money for the wedding, so we paid for the card immediately.)
However, if we really wanted to play our cards right, we could open another, separate card in my husband’s name to get another registration bonus, pay for the wedding with two cards, and then pay both of them in full. But that can be tricky with fees and budget.
Our 100,000 points were paid for on two flights from Los Angeles to Denmark, Sweden and Norway and then back to Los Angeles (essentially our honeymoon). Otherwise it would have been worth $ 2,000. However, Chase has since dropped the bonus to $ 50,000, which is still not bad (it still costs around $ 1,100). Not only that, but the backup plan also offers other great perks (and it’s better, with a whopping $ 450 annual fee): $ 300 travel credit, free lounge access , and $ 100 credit to cover fees for filing applications for participation in the Global Entry or the TSA the Pre ✓ . Their points per dollar spent are also pretty good: you get triple points for travel and meals, so in addition to our honeymoon, I also earned enough points this way last year to afford two free domestic flights.
Whether it’s a wedding, home renovation, or any other big purchase, every time you plan on spending a lot of money on something is a great time to get credit card signup bonuses. The same disclaimer applies: make sure you don’t spend money you don’t have just to get a reward.
Find the cheapest flight
Cheap flights also usually mean fewer reward points, which means you can keep some of your rewards for future flights.
In addition, I have found that it is sometimes cheaper to book flights through the credit card rewards portal rather than directly with the airlines. For example, for our trip to Denmark, booking flights through Swiss Air costs several thousand points more than booking flights directly through Chase.
One caveat, though: it’s usually best to book directly with the airlines in case you need to make changes. There was a mistake in our booking that Chase said they couldn’t prove it was their fault, so they charged me $ 50 to fix it. It was also very painful to select locations and so on through Chase’s portal.
Some people spend more time than opening and knocking card after card to get a free travel pass. And they travel often and in luxury! However, if you are too lazy for all this, it is entirely possible to benefit from travel without spending too much time on it. I’ve only opened two cards in the last three years and still saved thousands on travel .
Opening a card can definitely affect your credit , but perhaps not in the way you think. Thanks to a concept called leveraging credit, my credit score really went up after opening these cards. This only happened because I paid them, so although I had a lot of credits available, I did not actually use them, which meant that the use of my credits was low. To keep your bill (and your expenses) constant, you must keep usage low.
One last warning. If you are planning to buy a house or take out any other type of loan , do not open the card until the entire process is complete. When you apply for a new card, this action is displayed on your report and your loan will be temporarily repaid. Mortgage companies and other lenders don’t like this. This makes them nervous because they think you will end up in a bunch of debt and are insolvent on a loan.