You’ve probably heard about travel hacking from that one friend who is always trying to save a buck and travel more for less.
(I’m, that friend).
Or maybe you’ve seen the aesthetic travel blogger posts making wild claims about taking trips to Hawaii for $17.
The good news is, travel hacking is as simple or complex as you want it to be.
To start travel hacking, it’s a matter of figuring out a few key things:
- What are your travel goals?
- Do those goals align with your financial goals?
- If you don’t know your financial goals, consider figuring that out as a prerequisite.
- Finally, it’s time to choose the best rewards cards to make those goals a reality.
- To speed up the process, this article includes travel hacking basics & my favorite travel cards to date
- I’ve also included helpful links to other super informative articles if you’re looking for more in-depth reading.
If you’re ready to choose a card now, here are my top picks to save you the scrolling.
What is Travel Hacking?
If you know, you know. Skip this section.
Travel Hacking – is using rewards credit cards and as many airlines, hotels, company promotions, bonuses, and partnership incentives as possible to travel for a fraction of the regular price.
Essentially, travel hacking is gaming the travel credit card system on multiple levels, including:
- Signing up for multiple cards with excellent travel perks
- Cashing in on the major sign-on bonuses for those cards
- Shopping or buying gift cards through partner companies
- Ordering groceries online with partner programs
- Redeeming points for travel in the most beneficial way possible:
- like through a rewards portal
- or through transferring points to travel partners
Travel hacking is the art of understanding the best deals and offers and overlapping as many of those benefits as possible to pay for your vacations.
It might as well be called travel stacking because the name of the game is stacking benefits until a trip is free or deeply discounted.
Is Travel Hacking Legal?
Despite the name sounding like cyber crime’s cousin, travel hacking is perfectly legal.
The term hacking simply sounds more exciting than ‘tips’.
Learning how to travel hack is a matter of stacking the programs and incentives offered to you as a consumer to work the system in your favor. Mainly, the ‘hack’ is operating with a high level of organization and attention to detail.
Travel hacking is operating within the systems created by banks and travel companies, just at scale.
Credit Card Churning
Credit card churning, like travel hacking, has a negative connotation to it.
However, this is the method most use when discussing extreme travel hacking benefits.
Credit card churning is repeatedly signing up for high rewards travel cards only to cancel the card after meeting the minimum spends, cashing in on the bonuses, and taking that near-free trip.
This is obviously not something credit card companies want. They would prefer users sign up for cards and keep those cards for a long period.
While it is not desirable for the companies, it is certainly a method of working the system that many use.
That being said, there are rules in place for travel hackers who like to churn credit cards.
For instance, Chase has a 5 card maximum to fence in the amount of cards people can sign up for in 24 months. This is known as the 5/24 rule.
A big bummer to someone really trying to live large off credit card bonuses.
Credit Score Dings, Terms & Conditions, and Unspoken Rules
There are quite a few rules and regs to be aware of:
- Credit score dings
- Terms and Conditions of credit cards such as:
- 5/24 rule
- You MUST be financially able to pay your credit card bill every month
Credit Score Dings
More on the credit score affects below, but just know that signing up for multiple credit cards in a short period of time can affect your credit score simply due to the number of hard credit pulls.
And second, canceling credit cards after cashing in on the bonuses can also affect your credit score by up to 10 points due to something called the Credit Utilization Ratio (CUR). Canceling a line of credit will make your utilization increase, which can affect your score for a period of time.
Terms and Conditions
The terms and conditions for every card is different, but some of the best programs out there, like Chase, have policies to fence in credit card churning. Enter the 5/24 rule. This rule limits the number of credit cards one person can sign up for to 5 credit cards in 24 months.
This is important to note because you wouldn’t want to be maxed out and miss an excellent deal just because you are at your limit of cards for the two years.
Also, keep in mind that authorized users count towards that total.
So for me, I sign up for cards and typically make my husband an authorized user. This counts as two of my five.
It is my understanding that this rule is either buried deep in the terms and conditions or is simply an unspoken rule that Chase technically doesn’t formally disclose. This is just an issue extreme travel hackers have run into over the years.
Unspoken Rule
As a necessary disclaimer, and something that should be completely understood when I’m discussing credit card hacking from a personal finance standpoint, using travel credit cards to hack travel ONLY work if you pay them off in full each month.
Carrying over interest will never make sense and will always be a negative thing for your finances.
This is actually what banks are betting people will do. They are betting the little (or large) sign-on bonuses will be paid out and come back with friends in the form of 12-23% APR over the life of the account.
The unspoken rule is one I’ll gladly shout from the rooftops.
Travel hacking is NOT for someone who is not organized and disciplined enough to pay off all balances acquired across all credit cards. Every. Single. Month.
I’ll emphasize organization here because just because someone has an excellent job and may even be debt-free if he or she is not familiar with setting up auto-pay or disciplined with tracking bills and expenses, credit card bills can and will fall through the cracks.
A late payment here or there won’t be detrimental to your credit score at first, but that walking that line is a slippery slope and one that has extremely high-interest rates as the penalty.
In the end, you know you best. This is just THE RULE to consider before attempting to play the travel hacking game.
How to Start Travel Hacking
Sign up for a credit card that best meets your needs and goals.
Like the Discover It Miles travel card.
Or the Chase Sapphire Preferred card
To determine your needs and goals, there are a few things to consider:
- What type of vacations do you plan to take? What’s your budget?
- How many vacations do you plan to take a year?
Noting these things will help determine your budget for travel and what type of travel card will provide a meaningful impact on that vacation budget.
Travel hacking intentionally is always best.
Consider the Short Term
Next, define your short-term and long-term needs.
Signing up for credit cards should be a measured thing.
Keeping track of cards and points and using those cards enough to make the annual fees worth it should all be considered before choosing a card to sign up for and forgetting about the details.
A few things to consider:
- What type of anniversary bonus is offered?
- What kinds of free hotel perks can you get each year?
- Do these perks compensate for the annual fee?
- If yes, it would be a good idea to keep this card.
- If not, you should factor in a small, temporary credit score ding when you cancel.
A card that doesn’t meet a long-lasting purpose and allows you to reap enough benefits to more than cover the annual fee, is a clear sign to move on and pick a lower level rewards card with better longevity or plan to cancel the card in a couple of years.
Choosing the Travel Card
Choosing a travel card is infinitely easier to do once you have defined what you’re trying to achieve.
Do you want an annual fee?
This is the first filter I’d recommend using in your research.
Annual fees, to me, as a money-conscious person, is the main ask when it comes to signing up for a rewards card.
The big question here is how long do you plan to use the card and reap benefits from the card?
Once you know that, do you think the amount of savings long term will offset the annual fee?
As someone who obviously is into tracking money and other things like travel points and the benefits of those points, I make it a priority to know if a card will benefit me long term before I commit to signing up and keeping the card.
To help organize the scope of all travel cards out there, I’ve categorized some of my favorite cards into levels of travel hacking.
This is not an exhaustive list and it is also based on my limited experience over the years.
3 Types of Travel Hacking
While most people would agree going on vacation for a deep discount is a great thing, there’s a whole pile of other people who would think learning all the little nuanced rules (rules that are ever-changing, by the way) of credit card companies, sounds like the worst thing imaginable.
Thankfully you don’t have to read all the fine print to benefit from travel hacking.
Basic Travel Hacking – Hands-Free
Basic travel hacking is the type of travel hacking I’ve done the longest.
Travel hacking on a basic level is as simple as finding a few no-annual-fee cards with the highest travel perks and sign-on bonuses.
Signing up for those cards and redeeming points for travel expenses is as easy as putting your bills on auto-pay and redeeming your points once to twice a year when you take a trip.
This is the most hands-off method of travel hacking and involves picking a few low-maintenance cards that won’t cost you every year in annual fees to use for bills and groceries so your daily living expenses can help you afford a trip.
Time investment – a couple of hours
Effort – nearly zero.
Benefitting from basic travel perks involves a little startup cost:
- Pick the card(s) you’d like to sign up for
- Apply and receive your card in the mail
- Set up auto-pay and transfer bills to those cards
- Link cards to your favorite companies–Amazon, Zappos, etc.
- And lastly, get familiar with your credit card app and how to erase travel purchases
My basic travel card picks:
Intermediate Travel Hacking – Mix in a Few New Cards
Intermediate level travel hacking involves signing up for the travel cards that bring the biggest perks and point accrual rates and bonuses.
This level of travel card will include some kind of annual fee that should be accounted for when calculating what the true long term savings and benefits will bring you, first year sign on bonus aside.
In this scenario, you can (and should, from a credit score standpoint) keep your basic cards and use them once a year or so while taking advantage of the newer, more beneficial cards.
This level is a little more time demanding, but only a little.
Time investment: Less than two weeks to: research, sign up, and set up your new card.
Effort: it depends on your spending rate, but typically pretty low.
Benefitting from intermediate travel perks involves a bit more startup cost:
- Pick the next card to sign up for
- Factor in annual fee and overall benefit / cost ratio
- Apply and receive it in the mail
- Make sure to spend the minimum spend in the allotted time to get your bonus
- Typically $4,000 in 4 months
- Or $5,000 in 3 months
- Track when your bonus is dropped into your account
- Pay attention to point incentives and offers
- Make sure you understand the best way to redeem those fancy new bonus points
- Book your trip
With intermediate level cards, it’s a matter of knowing how to pick the good ones and learning the ins and outs of how to best use the perks.
Pay attention to bonus point opportunities and offers with intermediate level travel cards. Usually there is a shopping portal you can buy things through that will give you more travel points as opposed to just ordering something off Amazon.
Retrain yourself to do a quick check of the current shopping portal deals before making purchases you need.
As an example, Thrive Market was offering a 15 point per dollar bonus to Southwest Rapid Rewards Plus cardholders. I needed to stock up on Whole30 foods and high quality supplements, so I signed up for a free trial and made my orders (that I would have made anyway) and was able to get comparable Amazon prices with the Thrive Market sign on bonus and 15 points per dollar spend vs. the 1 I would have gotten making my orders outside the shopping portal.
These cards are way more beneficial to use compared to your your initial basic level travel credit cards, but it is important to keep those on hand and use them at least once a year.
The age of your credit history is an important factor for keeping your credit score high.
My Intermediate Travel Hacking picks:
Southwest Rapid Rewards Plus
Advanced Travel Hacking
Advanced travel hacking is the level I have no personal experience with. There are multiple websites and resources out there to help you choose the best tools to make the most of the credit cards at this level of the game.
In reviewing those ‘best of’ lists, you’ll see a few of the cards I recommend, but you’ll also see cards like the American Express Platinum or Chase Sapphire Reserver cards that have huge ($395-$550) annual fees.
These are the top tier cards I’m talking about. While the points accrual rate is super high, you have to be in a special class of person to dedicate the time and energy and money to work the systems of this level of card.
The Time Investment: is a bit higher. This is due to the benefits and fees being higher and the rules and best practices a little more nuanced.
People in the advanced level travel hacking side of the ‘game’ have multiple high rewards cards and spreadsheets to keep track of all the points and best uses.
These PhD level travel hackers also suggest using a resource like AwardWallet to keep up to date on all points. This is usually beneficial when you have multiple high level rewards cards to keep track of.
Effort: The effort is definitely higher with this level of card. It depends on how deep you want to go here, but you can bet a more detailed effort to work this system to the fullest and get your points worth out of cards with $400+ annual fees. Using paid tools and being plugged into top notch travel hack resources is a base line effort.
Statement Credits and Anniversary Points – While many of these top tier credit card come with statement credits and anniversary points that amount to $400 and in a sense erase those annual fees, you still have to be someone who is dedicated to being confined to booking the specific types of rooms or trips that line up with these statement credit rewards. It is doable and not as confining as you’d think, but it is not just hopping on Airbnb and using your Discover points to erase the charge.
Benefitting from advanced travel perks involves quite a few startup costs:
- Pick your next top tier rewards card to sign up for
- Factor in annual fee (usually over $350) and overall benefit / cost ratio
- Apply and receive it in the mail
- Make sure to hit minimum spend in the allotted time to get your bonus without going into debt or buying things you don’t need
- Track when your bonus is dropped into your account
- Make sure you understand the best way to redeem those fancy new bonus points
- Consider signing up for a rewards tracking service or using an app to stay on top of making all your points work for you
- Become well-versed in redeeming statement credits and what kind of anniversary points you’ll receive
Miscellaneous Things to Consider
Travel hacking is always changing. Since it is a game to game the system, the rules are ever changing, the bonuses ever fluctuating, and the ‘best’ for you is constantly shifting as a result.
To help wade through the mire of cards that all claim to be the best, here are a few key things to consider before signing up for a card:
- How quick do you need the points for your trip?
- Most cards award the points within up to 8 weeks of hitting the minimum spends, usually faster than that, but budget 8 weeks.
- That’s 8 weeks on top of how long you have to hit your minimum spend
- Some bonus reward structures aren’t realized and awarded until after the first year of use, these cards are obviously better for next year’s vacation, but not so good for this year.
- Can you afford making the minimum payments?
- As stated repeatedly, travel credit cards are only worthwhile for those who can pay the balance in full every month
- If you’re signing up for multiple cards with minimum spends, consider the ability to pay as well
- Do you have any hotel or airline preferences? Does that preference align with the cards you’re signing up for?
- With a specific trip in mind, do the bonus points stand to offer a significant impact?
Why Travel Hack?
Answering why you should travel hack is a simple question on the surface.
Most people want to take a few vacations in their lifetimes.
And most would agree that enjoying those trips at a deep discount would be ideal.
Right?
Right.
But we have to also consider the trade off for this discount.
While most sign-on bonuses are easy peasy to reach, looking at travel hacking should also include weighing the cost for the savings so many ‘PhD’ level travel hackers boast about.
The cost here is your time and energy to work the system and play the ‘game’ to reap the most benefits.
Of course, you don’t have to deep dive like so many travel hack gurus and become the equivalent of your coupon clipping aunt, you can travel hack however you want.
There are options out there for everyone.
Finding the best route and card for your style is the question to answer.
If you’re more serious about making larger savings and you know you take one – two one the expensive side vacations a year, the Chase Sapphire Preferred card is top three on almost every travel hack site for a reason. The perks and benefits for this card a excellent. It is a solid card with big perks like partner companies.
If you’re not so serious about it, but would like to earn points towards that beach trip you take every year by simply paying bills through a credit card, the Discover It Miles or Capital One VentureOne card would be excellent choices.
Happy travel hacking!
