A couple of years ago, I went to Japan and had the time of my life. The icing on the cake? My flights were almost entirely free. It was my first experience using credit card rewards for travel hacking. And it was a lot easier than I thought.
You don’t have to learn every trick in the book to get started with travel hacking. If the whole process seems overwhelming to you, here’s a beginner’s guide to getting started with it. In this guide, you won’t learn every single travel hack out there, but it does cover the basics of what you need to do to score a free flight on your next trip. Plus, I’ve included info on how travel hacking can affect your credit and how to play it safe.
Oh, and this post does NOT contain credit card affiliate links. Here’s why: 1) I talk too much $h!t about credit card companies to ask them for money; 2) I want to avoid any conflicts of interest; 3) I’m too lazy to figure out how that works.
Note: In the last section of this guide, I explain how to use credit card rewards responsibly. This guide assumes you already have solid credit card habits, though. This is crucial to the whole travel hacking process because if you end up racking up a bunch of debt or late fees, you’re not exactly “hacking” anything. If your credit habits suck or your credit score is questionable, fix your finances before diving into anything like this.
Step Zero: Get Started Before a Big Purchase
The best time to get started with travel hacking? Right before you’re about to make a major purchase.
The backbone of travel hacking is the credit card sign-up bonus. Instead of having to spend money and earn points slowly over time, credit card companies give you tens of thousands of points at once just for signing up as a new customer. The caveat is you have to spend a certain amount (usually $3,000 to $4,000) with the card in a certain amount of time (usually within the first three months). You can hit this threshold easily if you time it right, though.
For example, when my husband and I moved, we saved up money to spend on new appliances and other stuff at Home Depot. Before we spent the money, we signed up for the Chase Sapphire Reserve, used it to pay for our stuff, then paid it off immediately and still scored the sign-up bonus. If there’s anything major you’re planning to spend money on within the next few months (wedding? travel? remodel?), you may want to time your travel hacking around it.
Step One: Find a Card With a Big Bonus
Some experts recommend starting with your travel destination first, then picking a card that’s best for that destination or airline. If you know where you want to go and what airline you want to take, use this travel hacking search tool to find a decent card. Pick your destination and your preferred airline and the tool will tell you the best credit card for your trip.
Here’s the thing, though: generally, the best credit cards for beginner travel hackers have flexible rewards programs anyway. You can probably transfer your points to any of major airlines’ rewards program. By all means, double-check the flexibility, but these are the factors you really want to look at:
- Sign-up Bonus: This is how you’ll score your free flight. Many cards come with bonuses of 20,000 or even 50,000 or, in some cases, 100,000 rewards points. Your mileage with those points will vary depending on where you go and what flight prices are like. However, to put things into perspective, my husband and I paid for flights from LAX to Honolulu to Tokyo with about 75,000 points.
- Points Per Dollar: After you’ve scored the sign-up bonus, you want a card that still lets you rack up a decent amount of points for free travel. Most cards offer a standard 1:1 points to dollar ratio, but some will double or triple that for different kinds of purchases.
- Annual Fee and Other Perks: Most of the best travel rewards cards come with an annual fee, but many of them will waive that fee the first year. The Chase Sapphire Reserve fee is $95 a year, but their points per dollar are so good, the fee is worth it for a lot of people because they earn even more free travel. And the Chase Sapphire Preferred comes with a fee of $450. However, the perks offset a lot of the cost. The Preferred, for example, comes with $300 worth of free travel every year, free TSA Pre-Check, and free lounge access.
There’s no shortage of online tools to help you search for and compare cards (NerdWallet, CreditCards.com, CreditKarma), but to save you some time, here are the cards most travel hackers love and recommend. I’ve ranked these according to the cards I think have the best value:
- Chase Sapphire Reserve (my personal favorite): 50,000-point bonus (100,000 if you sign up at a Chase branch before March 12), but you have to spend $4,000 in three months. It comes with an annual fee of $450. Perks include 3 points per dollar spent on travel and restaurants, $300 credit toward travel expenses every year, free airport lounge access, free Global Entry and TSA-Precheck, and a handful of travel insurance protections.
- Chase Sapphire Preferred: 50,000-point bonus but you have to spend $4,000 in three months. It comes with an annual fee of $95, waived the first year. Perks include 2 points per dollar spent on travel and restaurants, trip cancellation insurance, and baggage delay insurance.
- CapitalOne Venture Card: 40,000-point bonus but you have to spend $3,000 in three months. It comes with an annual fee of $59, waived the first year. Perks include a 2:1 points to dollar ratio for all purchases, extended warranty protection on purchases, and free travel upgrades at certain hotels, resorts, and spas.
- Starwood Preferred Guest Credit Card from American Express: 25,000-point bonus after you spend $3,000 in three months. Starwood is a hotel loyalty program, but points are transferrable to most major airlines. It comes with a $95 annual fee, waived the first year. Perks include 5 points per dollar at certain Starwood hotels, free in-room Internet, and free Boingo hotspot access.
- Amex Everyday Preferred Credit Card: 30,000-point bonus after you spend $2,000 in three months. It comes with no annual fee. Perks include 3 points per dollar on grocery spending, 2 points per dollar on gas stations, roadside assistance, and travel accident insurance.
Also, any good travel credit card won’t charge you for foreign transaction fees. None of these do EXCEPT the Amex (they charge 2.7% for every foreign purchase), which is partly why it’s ranked last. This is blanket advice, but if you’re going to sign up for a card, always make sure to read the fine print and look at the fees. And if it charges foreign transaction fees, you probably want to avoid using it for overseas purchases.
Step Two: Accumulate Points
Once you sign up for the card, it’s just a matter of reaching your spending threshold in time. Again, this is easy to do if you already have plans for a big purchase, which is why I recommend scheduling your travel hacking strategically.
To make sure we hit our threshold, we planned it around our move (don’t apply for a card until you officially close on a home, though, otherwise the loan process is a pain), but we also used our card to pay for as many purchases as possible. We linked it to Amazon, our bills, and pretty much anything else so we could ensure we’d get our credit card rewards.
Of course, this only works in your favor if you pay those cards off in full and on time every month, though. Which brings us to maybe the most important section of this post.
Four Rules to Use Credit Card Rewards Responsibly
If you’re revolving debt on your credit card or you don’t pay it off when it’s due, you’re presumably racking up late fees and interest. And that kind of makes the whole “credit card rewards” thing pointless. So here are a few rules to follow to play the credit card rewards game without wrecking your finances:
- Only spend money you were going to spend anyway
- Set up an automatic monthly payment of your entire balance
- Keep tabs on your budget and make sure you always have the cash to pay what’s on your card
- Keep tabs on your credit (more on that later)
Step Three: Research and Book Your Trip
Ah, the most fun part: planning your travel. There are a number of different tools for searching travel deals, but Google Flights and hotel search does are hard to beat. They both have useful features that make it easy to browse for great deals (I’ve written about those features here). Typically, I search for the flight I want well in advance, then track it to get alerts when it increases or decreases in price.
It’s not just flights, of course, you can likely use your credit card rewards for lodging, too. You have to pick a hotel that’s in a rewards network, though. These are usually the major chains like Hilton and Marriott. Typically, I go the Airbnb route when I travel so I save my credit card rewards for flights. Here are the steps I take to transfer my points and book my flight:
- Search for flights and track the one I want
- Sign up for the airline’s rewards program if I’m not already
- When I’m sure about that flight, I transfer my rewards points to that airline
- Book the rewards flight once the points hit my account
It’s pretty simple, however, it might be a better deal to book through your credit card rewards site. For example, I recently looked up flights to Ecuador and they cost about 100,000 points through the airline. If I book that same flight directly from Chase’s travel portal, though, it costs about 80,000 points. And this way, I don’t have to worry about transferring anything.
How Travel Hacking Can Impact Your Credit
Opening a new credit card won’t hurt your credit score in the long-term, but there are a few habits that might:
Not paying your balance in full: Carrying a balance affects something called your credit utilization, which makes up 30% of your score. In short, credit utilization is the amount of credit you have available to you vs. the amount you’re actually using (or utilizing). Ideally, you want a lot of credit available without actually using much of it. In other words, pay your balance in full to make sure you’re not using a lot of your available credit.
Not paying your balance on time: This affects your payment history, which makes up 35% of your score. Pay your bill on time and you should be fine.
Opening too many cards at once: When you apply for a new credit card or any line of credit, the issuer or lender pulls your report to check your credit. It’s called a hard inquiry and it can drop your score temporarily. If you open a new card month after month (this is called “churning”), you might have a problem with this. Otherwise, you’ll just see a small drop that should recover in a few months’ time.
Also, if you apply for too many credit cards in a short amount of time, some issuers won’t approve you. A lot of folks weren’t able to take advantage of Chase’s new Reserve card because of the “5/24 Rule.” Basically, if you’ve opened five or more credit accounts in the past 24 months, you might not get approved. (Although some rewards enthusiasts say Chase might be more lenient if you apply in person at a bank).
Your credit matters beyond just getting approved for new credit cards, though. Landlords and employers check your credit, for example, and bill providers are legally allowed to charge you a fee for having bad credit. Check annualcreditreport.com every year to get a free copy of your report from each of the three major bureaus. In fact, this is a good habit even if you’re not chasing credit card rewards. And there are plenty of free tools that give you a general idea of what your credit score looks like, too. Personally, I use Mint for this, and some people use Credit Karma.
It seems like a lot to process, but the bulk of this information is just about using your credit responsibly. Beyond that, it’s really easy to use credit card rewards to earn free travel. It basically comes down to picking a card with a huge sign-up bonus, meeting the threshold, then planning and booking your flight. Let me know if you have any questions! I’ve been travel hacking for a couple of years now, so I’m happy to share anything I’ve learned.
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