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Do you hope to travel more this year? Do you think that traveling is just too expensive? Travel hacking with miles and points credit cards can help you achieve your travel dreams at a significantly reduced cost.
What is travel hacking? It’s taking advantage of offers and deals in order to get free or cheap travel. In my case, travel hacking means accumulating miles and points through new credit card sign-up bonuses and then spending those miles and points on trips.
My family has travel hacked our way to New York City, Florida, California, Colorado, Mexico, Costa Rica, Australia and New Zealand over the past few years. This summer, I’m flying my family of five to Europe on lie-flat business class seats! Some people assume we are rich or heavily in debt. Nope! We’ve used a combination of miles and points from credit card bonuses to make these trips happen for free or for cheap.
This post is geared toward miles and points newbies. If you’re an experienced travel hacker, pass it along to your friends so that they can learn how you travel for cheap.
Step 1: Set Travel Goal(s)
Before you start going after miles and points, it’s helpful to know where you want to travel. Are you a fan of road trips around the U.S.A.? If so, then focus on earning hotel points. Or, do you dream of flying to Europe? Perhaps an airline credit card or a card with flexible points will be more valuable. Knowing what your goals are will help you pick the right type of credit card to earn miles and points for your trip.
Step 2: Sign up for Frequent Flyer/Loyalty Accounts with Hotels and Airlines
Most hotel brands and airlines have frequent flyer or loyalty accounts that enable you to earn and use points for free or discounted stays. For example, Southwest Airlines has Rapid Rewards and Hyatt has World of Hyatt. It’s free to sign up for these accounts. I recommend you sign up for these before signing up for new credit cards.
Step 3: Apply for a New Credit Card with an Attractive Sign-up Bonus
The fastest way to accumulate miles and points is through lucrative sign-up bonuses on new cards, not through every day spending on a card you’ve had for years. Banks entice new customers with a big lump of miles for opening a new card and spending a few thousand dollars on it within the first few months. A great sign-up bonus is usually 50,000-100,000 miles or points. Check out the hottest credit card offers here, or explore all credit cards here. Not sure which card is right for you? Ask me at nancy@milesforfamily.com. (Full disclosure–my blog earns a commission from some of those credit card links).
Step 4: Begin Using New Credit Card and Meet Minimum Spending to Get Bonus
Once your new card arrives, start using it to charge your expenses. I put almost everything on my credit cards (groceries, gas, restaurants, etc.) and pay off my balance in full every month. If you have an existing credit card, move your bills from that card to your new card until you fulfill the minimum spending requirement.
Step 5: Activate 2-Player Mode
If you have a spouse, partner or parent who lives and travels with you, have them apply for cards in their name separately. You can both get signup bonuses and have double the miles and points to use for travel!
Step 6: Spend your Miles and Points!
This is the fun part! After your sign-up bonuses hit your account, start planning your trip! Use your frequent flyer and loyalty accounts to redeem your miles and points.
Tips for Travel Hacking with Credit Cards
Stay Organized. Keep track of when you apply for cards and the minimum purchase required for the big bonus. I recommend using the Travel Freely app to keep track of all your credit cards (see this post).
Use the correct deadline for spending requirements. After you’re approved for a new card, it will usually arrive within 1-2 weeks. However, the bonus time clock starts ticking from the day you are approved. If you have 90 days to spend $3000 to get the bonus, make sure you calculate that day from the correct starting point.
Understand bank approval restrictions. Some banks will not approve you for a new card if you’ve opened too many recent credit cards recently. See these guidelines.
Pay off your credit card balance every month. This method of travel hacking is only lucrative if you don’t have to pay any interest on your credit cards. If you don’t have the financial discipline to spend what you can afford to pay off every month, this hobby isn’t for you.
Pay attention to credit card annual fees. Some miles and points credit cards have annual fees. Many are less than $100 a year, while some of the premium cards are several hundred dollars a year. See what you get in return for that annual fee to determine if you want to keep the card for multiple years.
What About My Credit Score?
Many newbies have a concern that their credit score will be ruined by opening up new credit cards. The reality is that opening a few new credit cards a year has minimal impact on your credit score. I’ve discovered that my credit score usually dips slightly right after opening a new card, but it recovers within a few months. Since I started travel hacking with miles and points credit cards, my credit score has consistently stayed in the low 800s.
Final Thoughts
Travel hacking with miles and points credit cards isn’t as difficult as many people think it is. It takes just a bit of knowledge plus organization and financial discipline. But, the rewards are totally worth it!
I’m so glad I fell into this hobby years ago. I cherish the memories I’ve made with my family traveling around the U.S. and the world, and I plan to keep going.
CLICK HERE TO VIEW VARIOUS CREDIT CARDS AND AVAILABLE SIGN-UP BONUSES
Author: Nancy
Nancy lives near Dallas, Texas, with her husband and three kids. Her favorite vacations include the beach, cruising and everything Disney.
We have traveled more often and much more comfortably by using miles and points. No question!
I’d like to add something else to your post: I’d say there are different levels of travel hacking. It can all save you money but the more effort you put in to figuring this game out and flexibility you have when scheduling trips, the better the redemptions will be 🙂
Only being willing to travel the week of Christmas and booking one month before probably won’t yield much in savings (although there are still ways to “hack” that stuff too).
Happy new year!
I agree with you 100%! I plan on writing a Travel Hacking 201 post covering additional layers of earning miles and points.