I have a small secret I have to tell you all… We haven’t paid for a full price plane ticket in YEARS. It’s true! It’s Ah-mazing! We’ve mastered a skill called travel hacking and we aren’t looking back. This is one of the main reasons we are able to travel so often and see the world.
I know that some of you may have heard of travel hacking in the past. Credit cards, points programs, membership fees, rotating credit cards. Honestly, much of this is true yet I am going to break it down super easy so you can apply for credit cards that will offer you a reward bonus to travel where you would like.
QUICK FINANCIAL WARNING
If you are the kind of person who’s not so good at juggling multiple credit cards or multiple balances this may not be the best thing for you. Holding multiple rewards program credit cards requires some high-level organization and a commitment to paying off BALANCES IN FULL.
However, saving money for your dream trip is definitely not out of reach if you’re not good at juggling. You’ll just put your money in something like a money market account that allows you to earn a good amount of interest on your money.
Let’s dive in and discover what it takes to get you FREE travel so you too can see all the world has to offer.
FIRST THINGS FIRST, WHAT IS TRAVEL HACKING?
Travel hacking is all about seeing the world while making travel more affordable. It’s an art that involves working within the rules set up by the airlines and credit card companies then using them to your advantage to earn free travel.
WHY GET A TRAVEL CREDIT CARD?
The more money you charge on a travel rewards card, the more points or miles you get. If you are able to pay off your credit card balance monthly in FULL, a travel rewards card is something that really may be worth it for you.
YOU’VE BEEN APPROVED. WHERE ARE MY TRAVEL POINTS?
Let’s back it up here! Before deciding that you want to use a credit card for travel hacking it’s important to note that being approved for a card does not automatically reward you points.
Yes, here’s the catch. Most rewards credit cards have a minimum spending requirement. This means you have to spend a certain amount of money on your credit card in a specified time frame before you are awarded the points. All travel rewards programs function a bit different but most minimums are $2,000 to $4,000 spent within 2 to 4 months.
HOW DO YOU MEET THE MINIMUM SPENDING REQUIREMENT?
By being amazing… haha just kidding. Just be you! Do what you normally do. Don’t go out and spend a whopping $3000 just to spend it. Spend it by living your normal life and paying for expenses as you routinely do.
Now I have to be honest real quick… We have reached the minimum amounts necessary by using our cards to fund things like a bathroom remodel and new flooring. BUT, a huge BUT HERE we already had the money to pay the card off in full in our money market account.
BENEFITS OF HAVING A TRAVEL REWARDS CARD
Did you know that travel rewards cards offer more than just free or upgraded flights? They sure do! Some of the perks that these credit cards offer are truly amazing.
I won’t travel anywhere without using my travel credit cards because they help me to avoid international fees and other charges.
Travel hacking tip #1–Don’t miss out on the features listed below:
1. NO FOREIGN TRANSACTION FEES
This is a big one and people often don’t realize they are paying these unnecessary fees. When traveling abroad credit cards often charge a Foreign Transaction Fee. This fee typically costs you about 3% on every purchase while abroad.
2. BAGGAGE INSURANCE
Baggage insurance covers you if your checked baggage is delayed by more than 6 hours. You’ll get $100/day for up to 5 days to help get you on your way.
3. TRIP CANCELLATION INSURANCE
You are covered up to $10,000 per trip for pre-paid nonrefundable travel expenses. These include plane tickets, hotels, or tours that are interrupted by severe weather, natural disasters, illness, or other covered situations.
4. TRIP DELAY INSURANCE
If your flight or any other form of transportation such as bus or train are delayed more than 12 hours you can get up to $500 per ticket to cover you for meals and lodging.
5. CAR RENTAL INSURANCE
In the event of total loss, damage or theft of your rental car you’re covered. The best part is you can keep your car insurance company completely out of the loop so there’s no risk of your premiums increasing.
The above travel perks are available on all the chase travel cards including the Chase Sapphire Preferred which is my #1 pick for a travel rewards card.
STEP #1 IN TRAVEL HACKING: MAKE A PLAN
I recommend you begin thinking 6-9 months in advance where it is you’d like to travel to. After you’ve decided on a destination do some searches to get an idea on how much the flights will cost.
A great site I like using is Travel Codex. The site will give you a good idea of how much your flight there and back will cost in points, per airline.
STEP #2: COMPARE BONUSES
Now that you have a good idea how much you will be spending in airline points its time to compare the different travel credit cards out there. From early on when we started our travel hacking pursuit I followed Nomadic Matt a fantastic travel blogger. But there are other useful resources such as
Million Mile Secrets, The Points Guy, or US Credit Card Guide. All of these resources are great to help you figure out which credit card or rewards program is right for you
STEP #3: COMPARE MINIMUM SPENDING AND ANNUAL FEES
Most of the time you will find that the reward for meeting the minimum requirement with any rewards program is a free roundtrip flight. So now what?
You’ll want to compare the required minimum spending amount and the fees associated with the cards you are considering. Obviously you want to go for the card that requires you to spend the least amount of money, while offering you the biggest bang for your buck in rewards.
What I do when picking a card is figure out if the minimum spending requirement is something that I can actually meet within the specified time frame. Remember we aren’t getting these cards to just spend money and make a mess out of our finances.
Perhaps spending the $4000 in 2 months is a bit difficult for you to swallow. For many people the $3,000 card requirement in 3 months is easier to work into their finances.
Make sure you pay attention to the annual fees, some are steep some aren’t. Many waive the fee the first year so also keep an eye on that. Do your homework to determine if the annual fee is worth it to you and your finances.
BE THE SMART PERSON YOU ARE
RULES FOR SIGNING UP FOR TRAVEL REWARDS PROGRAMS
- Rule 1: Don’t spend money on the credit card if you can’t afford it. As mentioned above your goal is to use your rewards card for everyday expenses.
- Rule 2: Pay your card off in full each and every monthly. Do NOT carry a balance, you’ll just get yourself into trouble with interest rates down the road.
MY FAVORITE TRAVEL REWARDS PROGRAM-CHASE ULTIMATE REWARDS
What makes Chase Sapphire Credit Cards such a good choice is their Ultimate Rewards Program. Perhaps the most flexible and easy to use program out there.
I have been using the Chase Sapphire line of credit cards for many years and can attest to their outstanding travel rewards program. The Chase Sapphire credit cards consistently rank #1 amongst all the reviews I found.
You’ll have 3 basic options to turn your Ultimate Rewards into FREE stuff
1. CASH BACK
You can redeem your credit for a flat rate of 1 cent per point. You can redeem this as cash or in the form of gift cards. So if you signed up for a card that offers a 50,000 point sign-on bonus that’s worth $500 in cash.
2. ULTIMATE REWARDS TRAVEL PORTAL
Use the Ultimate Rewards Travel Portal to book all of your travel needs… Flights, hotels, cruises, trains, car rentals….you get the idea.
3. TRANSFER TO TRAVEL PARTNER
Currently, you can transfer your points to 9 airline partners and 4 hotel partners. This is such a great perk since other travel credit cards often restrict you to just one airline.
All transfers must be completed in 1,000-point increments and are 1:1.
This is a huge perk since every airline has slightly different reward charts this allows you to seek out that ultimate deal.
HOW TO MAXIMIZE YOUR TRAVEL HACKING WITH ULTIMATE REWARDS
Unfortunately with travel reward cards, cash-back is not always your best option. You can get more value by using other methods.
The Ultimate Rewards travel portal is a great place to start and is certainly your easiest option if you don’t want to hassle with comparing award charts.
There’s no hard and fast rule here either. I wish I could say for Europe you should use X and for Southeast Asia use Y. Unfortunately it’s not that straight forward.
But rest assured if you just use the Ultimate Rewards Portal you’re never gonna get ripped off. We’re talking relatively small differences.
MY FAVORITE TRAVEL HACKING CREDIT CARD
I’ll make this very simple, if you don’t have the Chase Sapphire Preferred card then you should start here.
CHASE SAPPHIRE PREFERRED
- Current Bonus of 50,000 miles after you spend $4,000 in the first 3 months.
- 2x points for all travel and dining purchases
- No foreign transaction fees
- $95 annual fee is waived the first year
- A second user on the account is FREE
- Has all the extra perks that I mentioned above like rental car insurance and baggage insurance.
I know this was a TON of information but I hope this helps you to make a more informed decision. I can’t emphasize enough how important it is to understand Airline Alliances so be sure to give that a read.
Like I’ve said earlier, if you aren’t into the hassle of transferring points and trying to figure out all the different award charts, the Ultimate Award portal is a great value and easy to use.