Travel hacking: Ultimate Guide for Beginners
Being able to take my family of 4 on a 5 day all inclusive vacation to Cancun, Mexico for nearly free opened my eyes to what is possible with travel hacking. As a teacher, a trip like that seemed almost impossible. Between airfare, hotel, excursions, and transportation, we were looking at an over $6k vacation. Thanks to travel hacking, I was able to take my family for only $500 and that was because we decided to do some pretty cool excursions while we were there since we had saved so much money. Keep reading to learn what travel hacking is and how you can do it too.
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What is travel hacking?
Travel hacking is the art of utilizing strategies, tips, and tricks to travel more for less money. It involves leveraging credit card welcome bonuses to accumulate the most amount of miles to exchange for discounted flights, hotel stays, upgrades, and other travel-related perks.
To get the most value for your miles, it requires research, and planning. Its a long game but the most rewarding if done right.
What is a minimum spend?
When you open up a credit card, they usually advertise 50k miles after spending 3k in 3 months. Some companies offer more, some less, some have less time to meet the minimum spend. It is very important that you read and understand what the time frame is and how much your minimum spend is.
For example, on the Chase Sapphire preferred the minimum spend right now is $4,000 in 3 months to get 60k miles. For the JetBlue Plus the minimum spend is $1000 in 90 days.
How to meet the minimum spend?
Every company is going to have a different requirement but as long as you know what the requirement is, you should be able to make it.
After figuring out what the minimum spend requirement is for your card, make a plan for how you are going to hit it. For me, I change all of my monthly subscriptions to the new card, use it for groceries, utilities, gas, literally everything. The new card becomes my go to credit card.
If the minimum spend is a little higher (like some business card minimum spends) then I open them around a time I know I’ll be spending more. I opened my first business card before Christmas and put all the presents on that card. We were also going on a big family trip right after Christmas so I put all of the extra expenses on that card to make the minimum spend.
Whatever your minimum spend may be, make sure you have a strategy to ensure you can hit it responsibly. You should make it with your regular spending and NOT buy things just to make it. That defeats the purpose and can get you into trouble if you can’t pay your cards off. You should pay your cards off in full every month because the interest is NOT worth it.
Best starter cards
Some of the best starter cards are the ones that are the most versatile. You can use their points on their portals OR you can transfer them to partners for a more valuable redemption rate. The 4 best starter cards are:
The “Blue Bank” Sapphire preferred card
Citi Premiere
AMEX Gold
I have linked the ones we currently have and use. If you use our link, we get a small incentive at no cost to you and we would greatly appreciate it! Thanks in advance 🙂
Types of rewards credit cards
There are different types of cards you can apply for. The first type is the transferable points cards that I named above. Those rewards points can be transferred to partners. Sometimes when you transfer points to partners, you get a more valuable rate.
The second type of card is called a co-branded card. A major bank will partner with a hotel, airline, or store. For example, the IHG Premiere card is a co-branded credit card. It is a Chase credit card that gains points for the IHG hotel chain.
When to apply?
The best time to apply for a new card really depends. Its different for everyone. If you have really good credit, you can apply every 3-4 months for a new card. Someone with less than good credit might have to wait 6 months to a year.
How to strategize? Start with the end in mind.
Before opening any credit cards, figure out where you want to go. Start with your ideal destination. I really wanted to take my kids to one of those all inclusive beach resorts. Then I started doing some research and I liked the ones in Cancun better than other places. So we picked a hotel we liked the best.
Once you know where you want to go, figure out how to get there. Use google flights to see what airlines can get you to your destination. Then see which airline credits cards have the best welcome bonus.
Once you know the where and the how, research the credit cards that can get you there. For this Cancún vacation, I opened the blue bank preferred (referred by my husband) and the blue bank business card. Combining these 2 card bonuses gave me enough points for a 5 night stay at the Fiesta Americana Condesa all inclusive resort. My husband got our flights with his blue bank points.
Another example is going to LAX from MIA. The 2 cheapest airlines are JetBlue and American. Delta and United will also get you there but from Miami, its more expensive. I then figured out which airline could get me there for the least amount of points. JetBlue can get us there for 10k one way while American Airlines was 15k for a similar flight. In this scenario, we decided to open the JetBlue Plus to get most of the miles needed for our family of 4 to LAX.
Points values
Some points are more valuable than others. For example the transferable points cards are better because they are more versatile. However, they should not be transferred to hotel rewards programs because the reception rate is way less valuable. It is something like 3:1 (3 chase points for 1 Hilton point) for some hotel rewards programs.
Another example would be the same flight we were looking at to get to LAX would cost us 10k with Jet blue but through chase it was 12k. So transferring to JetBlue from chase would make more sense for this trip.
2 player mode
Two player mode refers to referring your spouse or significant other to open the credit card, awarding you a points bonus. Then they gain points after meeting the minimum spend, you have points already from the minimum spend + the referral bonus.
For example, I open the “blue bank” preferred card and get 60k points. I refer my husband and I get 20k points. Then he gets the 60k points for him. We combine all of our points and have 140k plus the amount of points we gain from our normal spending. 140k+ can get you an all expense paid weekend for 4 to a lot of places.
Chase 5/24 rule
Chase has a rule where you can not open more than 5 credit cards in 24 months. Chase will not approve you if you have more than 5 credit cards within 24 months. However, business cards don’t count against this unless the business card your trying to open is after your 5/24. If you have a business, its best to open business cards first because they wont count against you.
The way to get around this is to open non chase cards if you’re over 5/24. If you really want a chase co-branded card then wait until you’re back under 5/24 to apply for your next Chase card. You need to be very organized or get an app to help you with organizing your cards. Travel freely is a great app that can help you with this for FREE.
The best starter business card is the “Blue bank” Business Unlimited ink card. They have a high welcome bonus at the moment (100k!) after spending 6k in 3 months. That is about $1,000 to use on travel. I love this card because you get 1.5 points per dollar on ALL purchases. Most cards give you a bonus on certain categories like food or gas but this card gives you extra points on all purchases!
Business vs personal cards
Business cards usually have a higher sign up bonus but they will also have a higher minimum spend requirement. Just because you do not have a brick and mortar business does not mean you can’t open a business credit card.
You qualify for a business credit card if you have an Etsy shop, sell things on eBay, offer up, or fb marketplace. You also have a business if you are in direct sales, have a blog, or an amazon shop. If you have the intent to make money, then you have a business!
Does it affect my Credit score?
Travel hacking actually makes your credit score better IF you are responsible and pay your statement balances off in full every month. The reason being, your available credit gets higher with every card you get (which looks great) and your debt to credit ratio is smaller. This accounts for 30% of your credit score. Paying your cards on time accounts for another 35%. Account inquiries are only 10%.
That doesn’t mean you can apply for too many cards within a short time. That looks bad. However, applying for a new card every 4-6 months is ok for most people. It just depends on your personal credit history.
I hope you found this helpful and if you have any questions, comment below. I’ll try to answer any specific questions as quick as I can.
For more tips on traveling with kids, check out our other posts. Also, follow us on instagram @fernandezfamadventures.
