The secret to how to travel when you’re on a budget? Travel hacking.
You may think travel hacking sounds intimidating. Only certain people can travel hack. The truth is, travel hacking is simply just a useful tool for maximizing your earnings. It’s knowledge you can keep in your back pocket to help you make small changes and choices to ultimately live the life you want without sacrificing your money or your dreams.
When done the right way, travel hacking can change your world.
So, What is Travel Hacking?
Travel hacking is the practice of leveraging credit card sign up bonuses and rewards programs to receive free or discounted flights or hotel stays. Proper travel hacking includes:
- Understanding point value and worth
- Capitalizing on Player Two mode
- Increasing points with strategic travel partner promotions
- Staying aware and in control of personal credit
Travel hacking can be done with general credit cards and is not limited to airline/hotel specific cards. In fact, Chase is one of the best credit card companies for travel hacking because of their wide range of redemption options and transferable power.
Travel Hacking Strategies
Everyone has their own way to travel hack. There is no one and only strategy, but most people online will recommend the same strategy for beginners.
It’s a good idea to decide where you want to travel first, and then get the cards you need to make your trip happen. Knowing what hotel you want to stay at or airline you want to take can help you narrow down your choices between all the card options available!
Let’s look at an example.
If you want to travel from New York to Paris, you may look at flying Air France, which collects and redeems Flying Blue points. Next you’ll look at which cards give you points towards Flying Blue – that might be the Air France KLM World Elite Mastercard®, or you might choose the Chase Sapphire Preferred® ** and transfer your points through the Ultimate Rewards platform.
If you don’t have a specific trip in mind, you can focus on building points through cards that earn flexible points, such as any in the Chase or Capital One portfolio.
** This post contains referral links. If you use my link, I may receive compensation at no cost to you. View our policy here.
Limited-Time Increased Welcome Offers
Every so often, you may notice that many cards will offer increased welcome offers. These are great opportunities to rack up more points if it makes sense for you! Some cards offer time-bound bonus rewards that make sense earning during certain times of the year, such as the Southwest Companion Pass.
Our advice when it comes to welcome offers is to take advantage when you can but try not to stress or panic-sign up. There’s nothing worse than signing up for a welcome bonus that you don’t realize you can’t earn in time, or wasting one of your 5/24 – (we’ll get to this later).
Enjoy Travel Perks Beyond Points
Most travel hacking websites and communities will only focus on earning free travel through credit card points but that’s ignoring the other options that will boost your point totals!
One of my favorite ways to boost my points is by using tools like Cashbackmonitor.com to search for which airline’s shopping portal will give me points for using their link. I like to “stack” this with the Rakuten browser extension (referral link) to get even more money back I can use towards travel.
What types of credit cards are out there?
So to be successful at travel hacking, you’ll want to focus on travel reward credit cards. These include credit cards for specific airlines and hotels, such as Southwest Airlines Credit Cards, Marriott Bonvoy Credit Cards, Delta Airlines Credit Cards, and more.
Reward credit cards also include the more general, Chase Sapphire cards, Capital One, Amex and more. These are sometimes called “transferable points cards” because you can earn the points through their rewards portals and transfer/redeem them with hotel and airline partners.
Meeting Minimum Spend
Once you choose which card you want to open, you’ll need to work on reaching the minimum spend to earn the card’s welcome bonus. Your minimum spend will be the amount of money the credit card company states you must spend on the card in a given time period in order to earn the sign up bonus. (The time period is usually three months.)
This is where you want to be strategic and be sure you’re not signing up for too many cards at the same time so you won’t have to meet multiple minimum spends during the same time period. Many people in travel hacking communities suggest planning your credit card applications around a big purchase.
While not everything can be paid for with a credit card, if you have big ticket items coming up like furniture, medical procedures, Christmas shopping, or even taxes – use the opportunity to earn free travel!
Meeting the minimum spend can be a little scary depending on which card you sign up for. Start out by paying for your normal, everyday expenses with the card. Keep a list of bills that you can update with the new card. Most importantly, never increase your spending just to meet a welcome bonus – we’re not here to get in debt, just to earn more on our normal spending.
Annual Fees
One thing to keep in mind as you start looking at cards, is the annual fee. Annual fees can vary between $75-$100 – but some luxury travel cards can reach $250-$695. Many cards will waive the annual fee for the first year, but you’ll want to know your own comfort levels and if you can afford to keep a card with a fee.
Most travel cards will offer perks that outweigh the cost of the fee, but you’ll need to do some planning on your end to make sure it works for you. Some benefits that outweigh the cost of the fee include: free hotel nights at luxury properties, lounge access at airports, airline credits, free memberships, Global Entry, and more.
Take time to evaluate the card and your own situation before applying. You’ll want to avoid opening and canceling cards too quickly – the longer you hold on to a card, the stronger your credit score will be.
Two-Player Mode
Now this is the hidden secret that many people don’t know about when it comes to travel hacking! Two-player mode is when you and your spouse both sign up for cards in your own name.
Let’s look at an example:
You sign up for the Chase Sapphire Preferred in your own name and meet the sign up bonus. You earn 60,000 points. Your partner waits a few months and signs up using a referral link from you for the same card and meets the sign up bonus. Now you have 120,000 points to use towards travel – plus some extra for the referral!
Chase 5/24 Rule
Something important, and less well-known, is the Chase 5/24 rule. This rule states that if you have opened 5 or more new credit cards (from any bank) in the past 24 months, you will not be approved for a new credit card from Chase.
Because Chase issues many of the best travel reward credit cards, you may want to start your journey with their cards. If you reach the 5/24 max, this is when you can start looking at other bank’s cards that don’t have limitations on the amount you open.
Something interesting to keep in mind is that most business cards don’t count towards your 5/24 max, so you may be able to open more if you are strategic with your choices!
My favorite business card: chase ink business cash
Which Cards to start with?
(This post contains referral links, which means I may earn a small commission if you click my link but does not change your price. See my affiliate policy here.)
My favorite card – and one of the internet’s favorites for beginners – is the Chase Sapphire Preferred. With a low annual fee and multiple travel benefits, the Sapphire Preferred covers your travel needs and gives you flexible, transferable points. Beyond my personal opinion, which card you get will depend on your travel goals and plans.
You’ll probably focus primarily on personal credit cards, but don’t limit yourself – a lot of people are actually eligible for many of the business cards on the market! If you have a side gig or sell on eBay, you have a good shot at being accepted.
A good business card to start out with is the Chase Ink Business Cash. This card is often recommended because of the high rewards rate on office store purchases. You’re probably wondering how often you’ll be shopping at big office stores. The secret here is purchasing fee-free gift cards for places you usually frequent – earning you at least 5x points.
Is Travel Hacking Right For Me?
This is a deeply personal question. I would strongly not recommend doing this if you can’t pay off your cards in full each month, or if you have trouble keeping track of your finances. Like I’ve said before, we’re not here to go into debt but to maximize our regular earnings!
I recommend keeping a spreadsheet of all your cards, both active and canceled. Keeping diligent notes on your credit cards can help you keep on top of your earnings and minimize risk of hurting yourself in the long run. You’ll want to keep track of your Chase 5/24 status, annual fees, welcome bonus deadlines, and credit score factors.
Grab my free Travel Hacking Spreadsheet here to keep yourself organized.
So how does this affect my credit score?
One of the critical things that keeps people out of the credit card travel hacking game is credit score. This is a common and rational concern. Interestingly, owning credit cards has actually helped me raise my credit score over 800!
Here are the factors that go into your credit score and how to stay on the good side:
- Payment history – counts for 35% of your score. Make sure to always pay on time and in full each month.
- Credit utilization – counts for 30% of your score. How much available credit do you have? You should aim to use less than 30% of your available credit. Using too much will hurt your score.
- Credit age/history – this makes up 15% of your score. Closing your accounts can ding your score. Don’t close your oldest ones – the older your available credit, the better.
- Account mix – this makes up 10% of your score. Make sure your credit is diversified. Home loans, credit cards, etc.
- Account inquiries – counts for 10% of your score. You will get a small ding when you open a card since companies will do a hard credit check. This will last for a short while.
Always discuss your personal finances with a certified financial advisor to make sure you are following best credit practices for your personal situation.
Wondering what to do if you want to cancel your credit card but worried about how it will impact your credit score? Here’s a guide on when to cancel and when to keep a credit card.
Stay organized with our free customizable Travel Hacking spreadsheet!
Now that you know more about travel hacking and how you can benefit from these money tools, it’s ready to get started! I’ve created this comprehensive spreadsheet for you to start off your free travel journey the right way – enjoy!