This time last year, I was trying to decide whether or not I could afford to go visit my partner in Turkey over the summer. I was lamenting about this situation to a friend, and she told me about how one of her friends had gotten a credit card with a great sign-on bonus that gave her like 50,000 miles and then she used those miles to buy a plane ticket to London. She suggested that maybe I could try the same thing to fund my trip to Turkey. Unbeknownst to both of us at the time, she had introduced me to the concept of travel hacking.
Travel hacking refers to the art of using credit card reward points to earn low cost flights, cabin upgrades, hotels, and more. When credit cards offer these sign-on bonuses, rewards and miles, they’re banking on the fact that you’ll overuse your credit card and end up paying them interest, helping them make back their money easily. However, with responsible credit card usage, you can get the perks without the interest. That’s what I did when I funded my trip to Turkey.
Picture of me on a street in Turkey, or it didn’t happen
If you’ve been keeping up with my posts, you’re probably thinking “Hold up, Briana, don’t you have credit card debt? What business do you have getting another credit card?” To be honest, you’re probably right. I don’t need another credit card. Most people would encourage not having debt before beginning to start travel hacking, but I JUST. COULDN’T. RESIST. Like I mentioned before, you have to be able to be responsible with the card, so I made a promise to myself that I would be. I kept that promise. If you’re interested in travel hacking, here are some things to consider.
What to consider if before you begin travel hacking
Am I living below my means?
If you’re the type to get a credit card and go out of control with your spending, travel hacking is probably NOT for you. If you want to reap the benefits of your travel rewards, you’ve got to be diligent to get the most bang for your buck. That means paying off your balance in full each month so you’re not paying any unnecessary interest. It also means not having to buy unnecessary things to reach your sign-on bonus. If you’re splurging like crazy just to earn your bonus, maybe just use that money for your trip?
Can I reach my sign-on bonus with my ordinary expenses?
A sign-on bonus is the reward a credit card company gives you, usually for spending a certain amount of money in the first few months after you open a card. A quick search of travel credit cards shows sign-on bonuses ranging from “20,000 miles after spending $1,000 in the first three months” to “60,000 points after spending $4,000”. Getting anywhere from $200-$700 towards travel doesn’t seem too shabby.
Sign-on bonuses aren’t just for travel cards. When I opened my first two credit cards, sign-on bonuses got me. I spent on whatever I wanted and told myself that I’d pay myself back with the bonus. No big deal. My unnecessary spending started a habit that helped me accumulate debt, but I learned from that mistake.
When I opened my first travel card, I wanted to make sure I wouldn’t overspend just to get my bonus. I calculated how much money I usually spend on groceries, subscriptions, gas, and whatever other expenses I usually pay each month. After calculating, I realized that I could put them on my new credit card instead and reach the minimum that way. No unnecessary spending, but reaping the rewards.
Will the annual fee be worth it?First, a caveat. Not ALL travel cards have annual fees. In fact, the one I started with (Barclays Arrival+ which I recently learned you can’t sign up for anymore??) had the annual fee waived for the first year, and I still got a lot of benefits. The card I most recently signed up for (Chase Sapphire Preferred) has an annual fee, but I decided the fee would pay off for me. If you’re interested in that card, you can sign up through my link here. It’s an affiliate link, so if you sign up through my link we both get perks.
Here’s what I considered:
- Sign-on bonus: Am I getting a lot of bang for my buck? Check!
- Am I willing to continue using the card after the bonus? I plan on this being my primary travel card. Check!
- Do they waive foreign transaction fees? Yes. Check!
- What is their redemption system like? Points that can be converted to miles and card statements. Okay!
- What other rewards do they offer? Check!
- 5X Lyft through 2022
- 2X Restaurants and travel
If the annual fee isn’t worth it, many cards have a no annual fee alternative. You can still earn rewards and start on your journey, and see if later on a card with a fee may be right for you.
What is the mile redemption policy?
Unlike men, all miles are NOT created equal. Neither are all mile programs. Dealing with miles is confusing, so I won’t go into a ton of details, but here’s a quick rundown.
Cash-back miles – some card’s miles work like cash back. You can earn miles and then use those towards a travel statement credit. This is how my Barclays card works. For example, I earned 70,000 bonus miles as my sign-on bonus. My roundtrip ticket to Turkey was $580. After the payment posted to my account, I used 58,000 miles to credit to that trip, lowering my owed balance by $580. I still had miles left that I could use towards other travel purchases (I ended up using them to pay for the post grad trip to Texas I took with my little sister).
Airline miles – with some cards you can transfer miles/points to certain airlines, and redeem flights that way. Airlines are wildly different with their miles policies. Some have blackout dates (times you can’t use miles); some allow you to use miles from partner airlines at a reduced rate. There are a ton of different restrictions, and it’ll take some digging to see what’s the best deal. My Chase card uses points that you can transfer to partner airlines. If you use miles through the Chase portal, you can get a discount so your 60,000 miles could actually be worth $750.
This post is simply supposed to be an introduction, and I feel like it’s already a bit long, but I’d be remiss if I didn’t throw in my number one tip to travel hacking: flexibility.
I am so loyal to Skyscanner. I use Skyscanner to search flights that I’m interested in and track as they move up and down. Through Skyscanner, I can see what dates are cheapest and plan accordingly. Sometimes that means that I don’t travel the exact dates I want or the airline I love, but that’s okay! I’m getting a great deal. I wish Skyscanner endorsed me, but they don’t. I just love them! (Scott’s Cheap Flights is also bae, and even though I haven’t purchased a flight that I’ve gotten in a newsletter yet, it’s nice to see what could be.)
Hopefully, this helped you learn at least the bare basics of travel hacking. Maybe, like me, you’ve been hacking without realizing. If you want a more in-depth look into the world of travel hacking, I highly suggest the Travel Rewards 101 course by ChooseFI. I learned more than I could take in! Let me know if you’re planning on travel hacking, or if you’ve done it before. I want to live vicariously through your cheap flights!
