Pharmacist going travel developer to explore the world and to live a fearless life.
Current Location: Medellin, Colombia
Travel Hacking is the art of maximizing your travel plans by leveraging airline points, accommodations, and other features to put more money back into your pocket or to enhance your travel experience. There are many resources out there and they will be linked throughout this section.
I certainly don’t claim to be an expert. However, I have traveled a couple times and slowly learning more about travel hacking as I research more and more. In each section, there will be related questions at the end to help guide your thinking but I recommend that you do further research online to expand your knowledge. Starting with Brian Kelly of The Points Guy is a good place as their information is usually top-notch and up to date. Here’s a good poitn to start from: The Beginner’s Guide to Points and Miles.
There’s also the aspect of travel hacking with your gear such as sewing pockets on the inside of your waistline of your pants or bringing a mini surge protector. These physical travel hacks will immensely improve your travel experience and help you avoid certain disasters. This will be in the travel gear section.
Before You Get Any Credit Cards
In the beginning, it would be easy just to go on a shopping spree and get everything you want and charge it to that plastic card (or metal depending on what’s in your wallet). However, we should be more strategic about our spending.
First, sign up for a Mint account and assess your current financial situation. This will give you a bigger picture of all your assets like property, credit cards, debit cards, student loans, investments, and other financial aspects. After all the numbers are through, you can see more clearly of your monthly spendings. This will be used to synchronize your spendings with a new credit card that has a minimum threshold you usually have to meet to gain the bonuses. Having this big picture will greatly increase awareness of your financial landscape and highly recommend for you to take some time and do this.
Second, start reading a lot of travel hacking blogs. I would recommend Matt Kepnes of Nomadic Matt, Brian Kelly of The Points Guy, and Drew and Caroline of Travel Is Free to start with. There are all kinds of travel hacks out there with airline, hotels, and deals. That’s what we are mainly talking about in this section. I also talk about travel hacking with what’s in your backpack in the travel gear section.
Third, sign up for an award wallet account if you plan on travel hacking long term. I’ve heard of some of the pro travel hackers having at least 25 credit cards. Now that’s difficult to manage if you don’t have some kind of system in place. Award Wallet is a great place to keep track of your points, to track when they expire, and to see how much you’ve racked up.
Fourth, figure out big expenses that you’re planning in the near future and write them down. Some big expenses might be a new laptop, replacement tires for your car, a new refrigerator, a new kayak, and anything else that’s more than a couple hundred bucks. Total them all up and see how much you would need to save so you can readily buy those items when you have your new card. Even better if you have a savings account which you can transfer money into for this purpose.
Fifth, make a google spreadsheet or document for all the cards you open. Get use to logging those big payments you submit at the end of the month. This will help you determine the total amount you’ve spent in order to pass that spending threshold to get your point bonus. Enter the date you opened the credit card account, the date when the spending period is up, and the benefits of the card. Keep in mind the long term game of the card too such as downgrade opportunities to cards that has no annual fees. More on this in later sections.
Remember the key: DISCIPLINE. Travel hackers already possess this precision with numbers or will develop this through time. Keeping a log of what you’re doing is the best way. Taking a wrong step can hurt your credit score so tread wisely. If you are terrible with money and prone to making late credit card payments, then you might want to rethink your travel hacking career.
Debunking Credit Card Myths: Does Having Many Cards Hurt Your Credit Score?
Debunking Credit Card Myths: Does Applying for a Card Permanently Impact My Credit Score?
5 Lesser-Known Things that Affect Your Credit Score
Does Adding an Authorized User Affect My Credit Score?
How I Got Started
The first card I ever signed up for was the Chase Sapphire Preferred credit card. It was most highly rated card at the time and came with a generous mileage bonus. The process was relatively easy as I had good credit score and the online application was a breeze. I wrote down the day I got the card and how much time I had to reach the points threshold. At the time, the Chase Sapphire Preferred offered 50,000 Ultimate Rewards Points after spending $4,000 in the first 3 months. After I achieved the bonus through careful planning of spendings and adding an authorized user, I set my sights on a new card to rack up more points.
At this point, I signed up for Awards Wallet so I can track all my hard earned points. Signing up with them was easy and quickly added my Chase Sapphire Preferred account on there. I also added on a Wells Fargo credit card that I had points on way before I got into this travel hacking.
The next card I had my sights on was the Capital One Venture credit card. The card offered 40,000 Points after spending $3,000 in the first 3 months. I had also added this card to my Award Wallet so I could track the points. I also planned carefully before I spent that money. If you start tracking your spendings, you can easily figure out if a new card is something you should be shooting for.
As fate would have it, less than a month after I passed the threshold on my Capital One Venture card, there was a new release of a never before seen credit card that was instantly a smashing sensation in the travel hacking world.
Enter the Chase Sapphire Reserve. This hefty card promises 100,000 Ultimate Reward Points after spending $4,000 in the first 3 months. Besides a ton of other travel perks, this was the answer that I was looking for. Travel bloggers instantly published articles about this card like a mass stampede. I received a card for myself and also enlisted my previous authorized user on this one too. After receiving the card, the $450 fee was charged alongside with a $75 fee for the authorized user card. I hope you are not too concerned with the annual fee as they reimburse you $300 for your travel spendings at the end of the calendar year. I also applied for Global Entry Trusted Traveler card with this credit card and the $100 fee was waived. So basically, I was reimbursed $300 for my recent travels in November 2016 and $100 for the Global Entry Application fee. Not a bad deal after all.
The next card I got was the Charles Schwab High Yield Checking Account. This is my primary spending card during travel abroad because it has only $500 at a time on it and can be used with ATMs. In fact, this card has no foreign transaction fees when you use an ATM. It’s also a debit card which lets you transfer money from your main bank so you won’t start crying if someone steals or you lose your card. I have used it in South America and it worked great.
The next card is more of a switch out and not a completely new application. This was the downgrade of the Chase Sapphire Preferred to Chase Ultimate Freedom. The main reason was to avoid the annual fee and avoid duplications of credit cards. The Chase Reserve card already earns me triple points so the Chase Preferred’s double points didn’t appeal to me as much. It was a relatively painless process to downgrade with a telephone call. The Chase Ultimate Freedom gets me 1.5% cash back but can also transfer to airline points. The only card left for me is downgrade the Capitol One Venture card in a few months to avoid the annual fee.
The only card left for me is downgrade the Capitol One Venture card in a few months to avoid the annual fee.
Quick Timeline of My Travel Hacking:
1/8/2016 Opened Chase Sapphire Preferred (Spend $4,000 by 4/8/2016)
3/1/2016 Spent $4,068.24 total by this date and effectively gained 50,000 points
6/6/2016 Opened Capital One Venture (Spend $3,000 by 9/6/2016)
8/21/2016 Spent $4873.89 total by this date and effectively gained 40,000 points
8/23/2016 Opened Chase Sapphire Reserve (Spend $4,000 by 11/23/2016)
9/29/2016 Opened Charles Schwab High Yield Check Account
12/29/2016 Downgraded my Chase Sapphire Preferred to Chase Ultimate Freedom
You earn a bulk of your miles from signing up for a new credit card and spending a minimum threshold amount over a certain period. Second, you can earn miles through purchasing goods through the credit card or at an online retailer associated with that company. Depending on the credit card, you generate a majority of your points through travel and dining. With the Chase Sapphire Reserve, I earn 3 times the amount of points with those 2 categories.
It is worth noting that opening a lot of new credit cards over a period of time won’t hurt your credit score. It ultimately depends on how you handle the credit that most companies look at. However, be aware that Chase has the 5/24 rule which might deny you a new credit card if you’ve opened 5 or more in the past 24 months. If you keep a majority of your credit cards, the annual fees on those cards might be annoying. One solution: to downgrade the card that has no annual fee, which is what I did with my Chase Sapphire Reserve down to The Chase Ultimate Freedom. The Capital One Venture card can also be downgraded to the Capital One Venture One card.
Another lucrative option is shopping through the Airlines online shopping portal. When I was buying the GoPro Hero 5 with United’s MileagePlus Shopping, I went through their portal to buy it from an affiliate named Bass Shop Pro. They give me 3 points for every dollar I spent. So with spending $400, I effectively got 1,200 points. If you’re also curious about it, The Points Guy also offered a really good article called Maximizing Online Purchases with Airline Shopping Portals.
When Can I Downgrade My Credit Card Account?
Should I Downgrade My Capital One Venture To A No Annual Fee Or Get A New, Better Card?
Why Chase Freedom Isn’t Just Another Cash Back Card
The part is the most fun which is spending those miles. There are many ways to spend the miles. It’s recommended to spend your miles prudently as you get more bang for your buck if you pick international vs domestic flights, flying business vs economy, airline companies, and a few other factors.
You can also take advantage of stopovers and open jaws with airline points because the mileage is the same whether you stay at a stopover point for a couple hours or up to a year. There are very good guides written by travel hackers who have been doing it much longer than me.
Of the miles I’ve earned so far, they don’t have an expiration date! However, it’s going to be tough keeping track if you have 5 different accounts of where you’ve earned your miles. Which is why signing up for Award Wallet is extremely helpful.
Award wallet will help you update all your accounts at once after you’ve synchronized all your credit cards account on there. You can even add accounts on there that are not credit card based. My United MileagePlus account just has an account number but I have not actually opened up a credit card with them. Although you would have to manual track these and update, it’s still useful to line all your points up in a row to see where you stand if you wanted to transfer points between cards and airlines.