“It must cost a lot to fly around the world?” people tend to ask me. “How much do you normally spend?”
“I don’t know, maybe a couple thousand all year. My first trip around the world cost me $1,800 in flights,” I reply.
“How is that possible?”
“I use those sign up bonuses on credit cards!” I say.
Back in 2004, I signed up for my first travel card: a Citi Premier Pass card and earned enough points to pay for my flight for the first leg of my round the world trip, Chicago to Oslo. By the end of that trip, I had enough points to pay for another free flight to Europe later that year.
Back then, I had no idea what I was doing. Now, I have mastered the system of using credit card bonuses for free flights to the point where I regularly give away hundreds of thousands of miles each year because I simply don’t use them.
I’m a travel hacker, the term given to people who use credit cards, loopholes, and award programs as a way to earn free travel and elite status. I think travel credit cards are crucial to reducing your travel costs and making life easier. They get you free stuff and cheap flights, help you save on exchange rates, avoid fees, and make you money. You probably use a credit card during your everyday life anyway, so why not use one that lets you take that dream vacation? By using and signing up for travel credit cards, I have received:
- 350,000+ American Airlines miles
- 100,000+ British Airways miles
- 100,000+ AMEX Membership points
- 50,000+ Virgin Atlantic miles
- 70,000+ United Airline miles
- 50,000+ Starwood Points
- 4 free nights at the Marriott
- 2 free flights to Europe and $300 USD cash through Citibank points
- 60,000 Hilton Honors points and Hilton Honors Gold membership
Those miles and points have translated to free first and business class flights, free nights at hotels, free upgrades, and free money. And it didn’t take me years to accumulate these points, either. I received a lot of points through sign-up bonuses and special offers that allowed me to earn most of those points within a few months.
There are many travel credit cards out there that offer different kinds of rewards, from general points programs to branded hotel and airline cards. At any given time there are countless options to choose from. Today, I wanted to talk about how you can leverage these cards to get an essentially free vacation.
A Step-by-Step Guide to Finding the Perfect Card
Step 1 – Answer the question “what do I want?”
When I am signing up for a new card, I like to have a plan so I can maximize the points I get. To determine which card you should choose, think about why you want to use the card. Are you interested in loyalty to a brand, free rewards, or avoiding fees? Do you want to milk the rewards and bonus system to get free flights or do you just want a card that won’t charge you a fee for using it at that restaurant in Brazil?
Knowing the answer to that question will help in the next step when you are researching all your available options. For me, the answer is always flexibility. I want points I can use anywhere.
Step 2 – Research your options
Most travel credit cards offer at least twenty thousand point bonuses just for signing up. Don’t sign up for a card that doesn’t offer at least that, because without it, it will take a long time to earn enough reward points to exchange for hotels, cash, or airfare. Starting your balance at twenty thousand points is a lot better than starting at zero.
To find the latest cards and deals, I recommend the following websites:
- Travel Hacking Cartel: A subscription site that monitors all the deals, bonuses, and free reward points offered by travel-related companies.
- Boarding Area: A website that contains a series of blogs that discuss how to fly for free and gain airline miles and elite status quickly.
- The Points Guy: Run by Brian Kelly, this site helps people navigate credit card bonuses and airline and hotel reward programs.
There you will be able to scroll through the latest bonus deals to find the card that matches what you want out of a card. For example:
Very flexible points? Starwood AMEX or the Chase Sapphire card
Loyal to a certain brand? Get that brand’s credit card. For me, I fly American Airlines a lot so I have their credit card. I love Starwood points so I use their card too.
Want no foreign transaction fees? Get a Chase Sapphire or Capital One card.
Want to be treated like a king? The American Express platinum card is for you.
For whatever you need, there is always a card for you.
Step 3 – Maximize Points
Most good credit cards also reward you with extra points when you shop at specific retailers, or, if it is a branded credit card, you’ll get extra points for that particular brand. You’re going to shop anyway, so why not earn something for doing it? These cards are meant to encourage people to be loyal, so they include lots of perks so you don’t use a competitor. I received triple miles by buying clothes from Gap using an airline’s credit card since Gap was a preferred merchant. United gives you double points when you use their credit card for booking flights directly on their website. I got extra American Airlines points by joining Netflix through their website. I follow the philosophy of George Clooney from the movie “Up in the Air” in which “I don’t do anything if it doesn’t maximize my mileage account.”
Foreign Transaction Fees – If you only care about points, you can use whichever card is offering the best deal at the time; a general rewards credit card like Capital One No Hassle Reward, Chase Sapphire and Ink cards, or American Express would be best. You will still get points for free flights and discounts but you won’t get any of the elite status benefits that a branded credit card gives. The flip side of that is you will have access to a wider range of brands and companies.
Your Credit Score – You’re probably thinking that while all those points sound good, you don’t want to hurt your credit rating by opening so many credit cards, or pay fees on multiple cards.
First, all the credit cards I’ve ever gotten have waived the yearly fee in their introductory offer. When it comes time to renew the cards and pay the fee, I simply cancel the credit card to avoid the fee. Another option is to call up the card issuer and let them know you are thinking of canceling, many times you can get the fee waived for a second year or have your account switched to a no-fee card.
It’s true that “churning and burning”—i.e., opening and closing a lot of credit cards at once—can hurt your credit score. But opening a few accounts over a longer period of time won’t kill your rating. I’ve been opening and closing accounts for years, and I still have a credit score close to 800 and have never been denied a card.
As long as you space out your applications and maintain good credit, you won’t do any long-term damage to your credit score. Your credit rating rises over time as long as you maintain it; you aren’t going to have a bank officer tell you years from now, “Sorry, because you canceled three credit cards in 2012, your loan is denied.” I once canceled four credit cards in one day, and the impact on my score? Nothing.
Travel credit cards offer great benefits that can really reduce the costs of your trip but with the maze of credit cards out there, it can be confusing trying to figure them all out. Hopefully this article helped you understand how the cards work and brought you one step closer to free travel.