About five years ago, I became familiar with the concept of travel hacking. It was certainly a cool idea, but I didn’t take immediate action on it.
“Sounds like a risky, time-consuming process”, I thought to myself. As time went on and I was able to digest more info around the travel hacking universe, I started dabbling.
Since then, I’ve landed lucrative rewards including multiple free flights and hotel stays. I’ve done this with minimal time and effort spent. There are much more elaborate and involved strategies for travel hacking, but success is possible even while avoiding them entirely.
Regardless of the approach taken, the benefits outweigh the costs. That’s the textbook definition of a winning investment!
In this article, I will share what I’ve done to achieve multiple free flights and hotel stays with a simple and straightforward process. I hope that my perspective will provide readers with an idea of what’s possible with minimal effort, and break down some of the barriers to entry in the travel hacking game.
What is travel hacking?
Travel hacking (sometimes called credit card churning) is the practice of using credit card rewards to earn free (or heavily discounted) flights and hotel stays. There are two primary ways this is done.
Earning points through new card sign-up bonuses
This involves opening a new credit card and meeting the minimum requirements to earn the lucrative one-time bonus. Minimum requirements typically entail spending a certain amount on the card within a specified timeframe (i.e., $3,000 in the first three months).
A strong sign-up bonus will usually be enough for at least one round-trip flight or multiple hotel nights.
Earning points through everyday spending
Many cards offer rewards bonuses for spending categories, such as 3x points for transactions at the gas pump, grocery store, or restaurants. Using a card strategically based on rewards incentives can help you accrue rewards faster.
Simply put: The more rewards you can accrue through sign-up bonuses or spending, the more you can travel for free. You can imagine how this can create motivation to open multiple cards at once, and meet the spending requirements for each.
As I mentioned above, it can be as simple or as elaborate as you want it to be. I keep it relatively simple and basic, so the rest of this article will deal in the basics.
Things to keep in mind before opening credit cards
There are two key points that anyone should keep in mind before considering opening credit cards to be used for travel hacking.
Ensure balances are paid in full every month
If you are not going to pay your credit card statement balances1 in full every month, run for the hills! Credit card debt comes with crushingly high interest rates, which should be avoided at all costs.
Note that making the minimum monthly payment is not the same thing as paying off your statement balance in full. You will pay large amounts of interest if only making the minimum monthly payment.
Understand how your credit score may be impacted
Opening new credit cards will generate a temporary hit on your credit score, because banks will request your credit report during the application process. This impacts your score negatively. Likewise, closing older cards will induce a negative hit on your credit score.
In both of these cases, the impact will be short-term and minimal. This is important to understand if, for example, you are going to apply for a mortgage in the near future. This is because your credit score influences the interest rate you qualify for.
With the high-level details out of the way, let’s dig in to what I’ve learned from my personal experience with travel hacking.
Credit card rewards are low-hanging fruit
There’s lots of anti-credit card advice dolled out in the personal finance world. This isn’t always bad, as you just read above. But if you have your financial ducks in a row, credit cards are a powerful way to earn rewards in a passive fashion.
Every month, I have bills to pay. I need to eat, so I go to the grocery store. I also eat out, buy tickets for live shows, or maybe catch a baseball game. Life costs money to live, so why not get something in return when I spend it?
Spending money on a debit card or in cash is akin to keeping money in a savings account, whereas spending money on a rewards card is akin to investing in stocks. When using a rewards card, I get a return on my spending. When using debit or paying in cash, I get zero return.
Why turn down a return on my spending when it can be had for next to nothing?
High annual fees are more bark than bite
Last year, I signed up for the Chase Sapphire Reserve (CSR) card, which came attached with a massively enticing 100,000 point sign-up bonus. But the card also came attached with a $450 annual fee. For many, a fee that high can easily be seen as a non-starter.
When peeling back the layers on the proverbial rewards onion, though, it isn’t as bad as it looks.
The CSR in particular also included a $300 annual travel credit. That means if I were to book an Airbnb for $90, then book a flight for $210, they’re as good as free because the travel credit returns those dollars to my pocket. That essentially means $300 of the $450 fee is offset.
How to justify the remaining $150 fee balance? In the case of the CSR, rewards come in the form of Chase Ultimate Rewards. In terms of pure dollar value, these particular points are worth one cent. That means the 100,000 point sign-up bonus holds a dollar value of $1,000. Subtract the $150 from this, leaving $850. So essentially the sign-up bonus is worth $850 in cash, even after accounting for the high annual fee.
I’d be crazy not to take that deal, but that’s just the beginning. The points are easily worth far more than $850 if used smartly.
Be strategic when booking rewards trips
Let’s look at how points can be stretched to earn more than minimal redemption value.
For example, Chase Ultimate Rewards are some of the most valuable rewards points around, mainly due to the plethora of ways they can be redeemed. They can be redeemed for cash, they can be transferred to any of Chase’s many travel partners on a one-to-one basis, or they can be used on Chase’s travel portal to book flights and hotel stays directly.
Redeeming points for cash is the least valuable option, because it guarantees a one-to-one dollar value in exchange. If you redeem 100,000 UR points for cash, you will get $1,000. That’s not too shabby in its own right.
However, points can be worth significantly more than their one-to-one dollar value when redeeming for travel.
When using the Chase travel portal with the CSR, points are worth 50% more than their one-to-one dollar value. I recently used the portal to book a $465 United Airlines flight with 31,000 UR points ($310 worth of points). That’s a 33% discount, and illustrates the power of stretching points to get more value from them.
Alternatively, I could have transferred points directly to United at a one-to-one value, because United is a Chase travel partner. In this case, the particular flight I was booking was more valuable through the Chase portal. But that isn’t always going to be the case. It’s best to check with the travel partners first to evaluate how far your points can go by transferring directly to them.
Additionally, there are many “sweet spots” available through travel partners which can allow points to be stretched ridiculously far. That is too intricate of a subject for this article, but something worth being aware of and researching further on your own.
Bottom line: Doing even a small amount of research can help you stretch your points value and get more bang for your buck. If used optimally, a sign-up bonus can easily be stretched to return well above its dollar value.
Partner up with your S.O. to double rewards
If you have a significant other (who can be trusted with a credit card!), team up with them to essentially double your rewards. I’m no math expert, but it seems to me that two people equals two sign-up bonuses. That means you can both book free travel.
When I find a new card to apply for, I always have my wife do the same so that we can get the rewards together.
Some cards even offer additional point bonuses for actions such as adding an authorized user on a card. That’s easy, just add your partner as an authorized user for instant points. Have your partner do the same for you. I had a Marriott rewards card that gave out a nice bonus for this. I received a 10,000 point bonus in exchange for two minutes of my time.
Take advantage of fringe benefits offered by your cards
On top of valuable sign-up bonuses and rewards points, it is common for cards to provide other valuable benefits.
For example, the CSR card offers a credit for both TSA Pre enrollment as well complimentary airport lounge access with Priority Pass. My wife and I took advantage of both offers. Not having to take off shoes and belts, or take a laptop out of our bags to get through a security checkpoint, is a breath of fresh air.
It is also common for cards to waive foreign transaction fees, which makes them ideal to use when traveling abroad.
Many cards also come with insurance benefits, such auto rental collision coverage and baggage delay insurance. Next time you rent a car, you can probably politely decline when they try to push collision coverage on you. Just use a card which provides this protection when reserving the car, and be on your merry way.
Each card will come with its unique benefits, so it’s worth taking some time to familiarize yourself with what’s available. You never know when it can come in handy.
Managing a portfolio of cards
Choosing a single card with a strong sign-up bonus (and rewards currency) can reap multiple free flights or hotel stays on its own. However, the true potential is realized if you can “snowball” rewards. This done by continually signing up for new cards so that sign-up bonuses accumulate to a significant amount of points.
Think of it as building a stockpile of points that can be used or saved at your discretion.
I follow the below high-level steps to achieve this.
- Apply for a new card.
- Spend the next few months (usually three) putting all every-day expenses on the card in order to earn the sign-up bonus.
- When nearing the minimum spend with the current card, apply for a new card. Time it so that the new card is ready to be used as soon as the sign-up bonus is earned on the previous card.
- Rinse and repeat
Below are some pointers, tips, and considerations for this process.
Plan ahead for big expenses
If you have a large expense coming up (such as the purchase of a new appliance), time it so that the expense can be used towards the minimum spend needed to earn a sign-up bonus.
Last year, I was able to charge a large catering bill from my wedding to the CSR card. Not only did it knock off the minimum spend requirement immediately, it provided a significant amount of point value on top of it.
Know what to do with old cards
You can choose to close your old cards, but remember that this will present a temporary hit on your credit score. Because your credit score is partially calculated by your average age of credit accounts, it is impacted negatively when you open a card and then quickly close it.
There is no harm in simply keeping a card open and not using it. I just throw my old cards into a drawer so they aren’t available for use in my wallet. This also reduces the risk of being compromised if my wallet is stolen or lost.
It may be worth closing a card so that you no longer have to pay the annual fee, but you can usually call the bank and ask to have the card downgraded to a no-fee alternative. With the CSR, I can call Chase and immediately downgrade the card if I don’t feel like paying the $450 fee next year. This way, I keep the credit line open and my score is not impacted, but I am not stuck with a hefty fee.
Also keep in mind: Some rewards currencies are tied directly to the card. This means if you close the card without using your points (or transferring them out), you may lose the points. This is not as common, but something to verify before closing a card.
Opening multiple cards simultaneously
A more involved strategy includes opening multiple cards at once, achieving the sign-up bonus for each using backdoor methods (such as buying up pre-loaded gift cards which can later be used for spending).
As I mentioned earlier, I like to keep things simple. A more aggressive strategy might seem up your alley.
Different banks are placing restrictions on how many cards you can open and how often. For example, Chase has a “5/24” rule that essentially means your application for a new card will be denied if you have opened five other cards in the last 24 months. That being said, these are not hard rules, so it’s always worth applying.
It is helpful to track each card you have open, the date the card was opened, what the annual fee is, and how many points you have earned with the card. This ensures you don’t lose track of important details, and provides a consolidated snapshot in one place. I use a simple spreadsheet to do this, updating it each time I open or close a card and on a periodic basis in general.
Using the strategy above, my wife and I were able to accumulate nearly 1 million rewards points over the last year. So far, this has netted us 5 round-trip flights each (including two international), and two weeks worth of hotel stays. Even after all of this, we still have a significant amount of points waiting to be used.
It’s worth it to have a high-level strategy with the kinds of rewards you want to earn. Do you want cash back, free flights, or hotels? Maybe you want it all. It’s up to you to decide and research available cards, so that you can determine the best card to sign up for next.
Wrap Up & Further Resources
I’ve covered a lot of ground in this article. If there’s one takeaway I’d hope for, it’s that you can be successful with travel hacking with really low personal overhead. I hope that I’ve been able to dispel any misconceptions around the value of travel hacking and the level of complexity involved with it.
Here are some resources that I have found valuable on my personal travel hacking quest. There’s certainly no lack of valuable travel hacking content on the internet. In fact, there are so many sites it may be hard to find one to stick to.
With that being said, there are two websites in particular that consistently provide the best information. These are basically the only two sites I rely on for travel hacking news/info at this point.
Travel Miles 101
Travel Miles 101 includes updates on valuable deals and sign-up bonuses. But the real value comes from the reader stories shared on the blog, and the free online course. I took the course and can personally attest to its value. The course material can be applied to both a simple and complex strategy. It digs pretty deep into the elaborate topics I briefly mentioned in this article, including airline sweet spots and strategies for meeting the minimum spend on multiple cards at once.
Million Mile Secrets
Million Mile Secrets contains daily updates, guides, and tips. The daily newsletter is extremely valuable, and will deliver updates you need to see right to your inbox. This is a great way to stay on top of any news regarding rewards currencies or cards with sign-up promotions without having to seek out the information yourself.
All images by the author.
1. For an extremely thorough and well-explained video on the nuances of credit card bill cycles and payments, refer to this video over on Nick True’s YouTube channel.
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