Travel hacking, in its broadest sense, is really anything you do to optimize travel, whether by saving money or increasing efficiency through tools and tricks (hacks). The focus of this post, and the common definition, is all about playing the credit card points game to get free airfare and hotel points/stays. Be forewarned, it’s addicting!
This will be the first in a series of posts on Travel Hacking and is for those who don’t already travel hack. If you already hack, it may be useful to share with those who are skeptical. I’m always surprised at people’s resistance or skepticism so will attempt to address the main concerns in this post.
Travel hacking is not for everyone, so please pay heed to my suggested qualifiers.
Card hacking may be for you if you….
- Plan to travel
- live in the US (sorry…the best card offers are in the States)
- have a high credit score (700+…ideally 750+)
- pay your balance in full each month
- have at least $1k in monthly credit card spend (many regular bills can be paid via credit card)
- are an analytical traveler (think spreadsheets are cool)
Pro Tip: Use Credit Karma to monitor credit throughout the process.
It Really Works
Here are some of the benefits from travel hacking I’ve received over the past few months.
- Elite status at Marriott, SPG, Hyatt, and Hilton
- 10 free hotel nights
- PriorityPass lounge access
- Global Entry / TSA Pre-Check
- Cell Phone Protection ($600 per phone)
- 60k American Airlines points
- 300k Chase Ultimate Rewards points
- 26k AMEX Membership Rewards points
Here are the top 3 concerns I hear when discussing travel hacking with those who've never done it.
Concern #1: It will impact my credit score
Certainly a valid concern, yet largely unfounded. Credit score calculations seem to defy logic at times, but it’s not for us to question…only to leverage to our advantage. I’ve opened 10 new cards in the past 6 months, and my score has gone up ~50 points. You get a slight hit when they run a credit check and for credit aging, but more than make up for it with number of open accounts (high is good) and low utilization of available credit.
The below screenshots from my Credit Karma profile shows my score increasing during a period of opening a couple new cards a month for several months. You’ll notice the low number of hard inquiries as often the same bank won’t do a hard inquiry for each new card (particularly AMEX), also business cards won’t show up on your credit report. You can see what factors go into your score and the impact of each.
Concern #2: It’s too much work
Don’t be so lazy! Seriously, do the math on how many hours you would have to work to pay for the trips you will largely get for free. I will share the template, tools, and workflow I use to make it even easier in the next posts. You’ll spend about an hour for each new card and each card will typically result in 1-3 free flights or hotel stays.
Start small: Get one card, make sure to hit the spend, and go from there.
Concern #3: What about the high fees?
The APR is typically higher on these cards, but that should not matter. You shouldn’t be travel hacking if you have to carry a balance on these cards. Not worth it. You also don’t want to start buying things that you normally wouldn’t just to hit spend.
Most of the travel cards do have annual fees and some of the premium cards have a seemingly very high fee. “Seemingly” in that if you use the benefits of the card it will more than offset.
Example 1: Chase Sapphire Preferred
- Sign on bonus: 50k points (almost enough for one round trip to Europe in economy class)
- Spend requirement: $4k within 3 months
- Annual Fee: $450
At first glance, the annual fee seems exorbitant, however, the many benefits of this card go a long way to offset the fee:
- $300 statement credit for your first $300 in travel spend, applied instantly via statement credit
- PriorityPass lounge access at most major airports globally ($400 cost if purchased)
- $100 Global Entry fee credit
- Free trip insurance
- 3x points for dining and travel spend (this can really add up)
- Let's not forget your ticket to Europe!
Example 2: Marriott Rewards Premium Card
- Sign on bonus: 100k points (can provide 2-12 nights depending on category of property)
- Spend requirement: $5k within 3 months
- Additional bonus: Anniversary bonus of 1 night at a category 1-5 property
- Annual fee: $85 (easily covered by the anniversary award alone)
Hopefully, I got you excited about travel hacking! I know you may be anxious to get started but there is more to it that you should know first; for instance, the order in which you get cards matters. I will cover soon in additional posts, but feel free to reach out directly if you don’t want to wait.