Travel hacking is a very complex hobby. At first it feels overwhelming to understand how everything works. This post outlines a 6 simple steps for getting into the travel hacking game and travel for free.
Note: If you apply for a credit card on any of the links provided below, I may receive a referral bonus. The post also contains affiliate links. If you purchase the product through that link, we may receive a small commission
Step 1 – Pay Off Credit Card Debt
I know I promised easy and this is anything but that, but there are NO EXCEPTIONS! You should be credit card debt free to start this hobby.
Step 2 – Identify Day-to-Day Spending to Charge
Evaluate your day-to-day spending and determine what you can charge on a credit card without paying any additional fees. This includes gas, groceries, streaming services, your Amazon habit, therapy visits to Target, etc. It also may include your cell phone bill, utility bills, car insurance, and rent payments.
If it will cost you a fee to use a credit card, then you must evaluate whether the points you earn are worth the added expense. Sometimes they are, but that’s a more advanced strategy. For now, concentrate on identifying what you can charge fee-free. Add all of these expenses up to know how much on average you will charge to a card.
Step 3 – Apply for Your First Rewards Credit Card
Now that you know how much you will charge to a card on average, it’s time to find a new credit card. You want one that will give you a lot of points and miles for meeting a certain spending goal. If you can put about $1,400 of your day-to-day expenses on a card each month for three months, I highly recommend starting your free travel journey with the Chase Sapphire Preferred travel card.
This card will currently give you 75,000 Chase Ultimate Rewards points for spending $4,000 in the first three months you hold the card. On your day-to-day charges, you will get 5 points for every dollar spent on travel booked through the Chase Ultimate Rewards Portal. This is similar to booking travel on a platform like Expedia. You will also get 2 points for every dollar spent on other travel, 3 points for each dollar spent on dining, 3 points for every dollar spent on streaming services, and 1 point per dollar on everything else.
There is a $95 annual fee, but that is offset by some travel benefits you may not have otherwise. These include no foreign transaction fees, primary insurance on rental cars, and travel insurance. The card also comes with a $50 statement credit for hotels booked through the Chase Ultimate Rewards portal each account anniversary year. There are some other benefits and bonuses to holding the card which also may appeal, including a DoorDash membership for a specified time. But to me, the $95 fee is more than offset by the initial spending bonus, the travel benefits, and the $50 hotel credit.
Low Spending Plan
What if you can’t spend $4,000 in three months? I recommend getting a Chase cash back card such as Chase Freedom Unlimited or Chase Freedom Flex cards. These cards will generate points for you similar to the Chase Sapphire card. The difference is that these cards don’t generate points that are eligible for transfer to travel partners or used to book travel through the Chase Ultimate Rewards portal. Instead, you can get cash back at a rate of $.01 per point. Eventually you can get the Chase Sapphire Preferred card and transfer your Chase Freedom points to that card. This creates the Chase Trifecta I discussed in the post My Free Travel Journey to maximize points on daily spending.
Step 4 – Spend to Get the Bonus Points
Start using your new Chase Sapphire Preferred travel card for everything. Make sure this is the default card for your utilities, streaming services, Amazon, etc. And keep this card at the top of your wallet. Or better yet, in your phone case. I love this case by Smartish that keeps the cards that I’m wanting to use most at my fingertips!
The deadline for meeting the spending bonus is exactly three months after you were approved for the card. Note that it will take about a week to actually get the card. So you can’t use it right away. If you have a big purchased planned, you want to apply for the card in time to actually receive it in the mail before you have to pay.
Pay as You Go
You only have to charge the specific amount, not pay it off yet. So you can spread out the purchases and still get the bonus even if you pay off the final bill after three months has passed. But don’t use this as an excuse not to pay the bill. Credit card interest is high and will negate any value of the points and miles you gain through travel hacking. Pay off your bill each month! Better yet, pay off your expenses as you go. There no rule that says you only have to pay a credit card bill once a month. You can go online and pay off each day’s expenses on your credit card by linking your checking account to your credit card account.
If you find yourself running out of time to make the spending bonus, consider your budget. If you can afford it, buy gift cards for future purchases, pay car insurance early, do your holiday gift shopping, book your summer vacation, etc. This is also a good time to consider using the card on purchases where you are required to pay an additional fee (i.e. tuition, taxes, rent, etc.). Do everything you can to make the minimum spend to get the bonus points as long as you can pay off the bill at the end of the month.
Step 5 – Enjoy the Free Travel Rewards
Now that you’ve earned the points, enjoy them! Most travel hacking experts have the philosophy of “earn and burn” points. I have a different philosophy of saving points to use for specific purposes. But I do enjoy having a pot of points I can turn to when I want to take a spontaneous trip. It’s easy to say yes to a trip idea when I know I can travel free using my Chase Ultimate Reward points transferred to Southwest Airlines!
You can transfer Chase Ultimate Rewards points to several airlines and hotel partners. You can also use them to book flights, hotels, and activities through the Chase Ultimate Rewards portal. There’s also a “pay yourself back” option where you charge a specific expense and can use your points at a 1.25 value to erase the charge. The categories this applies to changes from time to time, but it’s definitely worth keeping track of. You can also buy Apple products and gifts cards through the Chase portal, or simply have Chase send you a check at a value of $1 for every point. This is not your best value for using the points. But redeeming 60,000 points for $600 for simply opening a credit card is not a bad return on your investment! Check out this post for more information on using Chase points!
Step 6 – Repeat Steps 3-5
Once you’ve gone through this process, you are probably committed to the idea of making your regular daily expenses bring you free travel (or simply free cash!). You can only get the Chase Sapphire Preferred bonus once every four years. I recommend hanging on to that card for awhile. You should cancel it about six months before the 4 year anniversary of getting the reward points so you can apply again. But there are plenty of other cards to consider. I’ll write future posts about options.
For most families, the Southwest Rapid Rewards credit cards are a good fit. These cards are similar to the Chase Sapphire Preferred card in the required spend to earn the reward points. But this time, those points are only valid on Southwest flights. Despite this limitation, I consider Southwest as one of the best domestic airlines, especially for families. The cost in points to fly domestically and to Latin America and the Caribbean is almost nothing compared to other airlines. Plus, Southwest has no checked bag fee. You can even bring two suitcases per person! As a committed overpacker, that’s music to my ears! You can get the Southwest bonus points every two years, so it’s a gift that keeps on giving. Read my post on more ways to optimize Southwest cards.
What’s your favorite rewards credit card?
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