Collecting points and miles can be a lucrative hobby, but there are several travel hacking mistakes you want to avoid.
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Mistake 1: Missing Your Monthly Payment
One of the most costly travel hacking mistakes to avoid is forgetting to pay your credit card bill on time. This results in a late payment fee as well as very high interest on your balance. Especially as you add more cards to your wallet, it’s hard to keep track of multiple statements and due dates! Fortunately, there are a few easy solutions.
Schedule Auto Payments
Make sure you have set up automatic payments on all of your accounts. Set these up to cover your minimum payment, statement balance, or another amount. If you know you have enough money in your bank account to cover the entire balance, set it up to pay the entire amount. Then you don’t have to manage it at all, and you will never pay a late fee or interest.
I have three checking accounts. I’m never sure which one I want to use until closer to the due date. So I set up my cards to autopay the minimum. Then I log into the account before the due date and schedule a payment that hits the day before the due date for the statement balance. If I forget to pay the entire balance, I have to pay interest that month, but I don’t get hit with a late fee.
Change Due Dates
Another simple solution is to request a due date change from the credit card company. With a new card, you may have to wait a month or two before making the request. But typically the card issuer will let you change your due date to whatever works best for you. Some even make it super simple and let you do it online! Even if you have to call, it might be worth it to have all of our payments due on the same day. Or it might work best for you to have some card payments due at the first of the month and others at the middle of the month, depending how you get paid.
Pay as You Go
In my related post Travel for Free in 6 Easy Steps, I suggest paying off your credit card as you go. Essentially, you can use your credit card as a debit card. Simply log into your credit card account and transfer payments from your checking account each time you use the card.
Mistake 2: Falling Short on Spending Required to Get a Bonus
Another of the common travel hacking mistakes you want to avoid is falling short on spending requirements to get a points and miles bonus. You could be walking away from thousands of points! There are a few things you can do to avoid this.
Keep Track of Deadlines
First, figure out the exact deadline to reach to spending requirement. For example, when I applied for the Chase Business Ink Unlimited card on February 3. I had three months to make the required spend to get 75,000 Chase Ultimate Rewards points. The Chase app on my phone provided a progress report of my spending and gave me the deadline I need to earn the points, which was May 6. I made it!
Get Alerts
I also use a free online tool called Travel Freely to help me keep track of deadlines. You can enter in the cards that you have and the tool will send you email alerts when you are approaching the spending deadline. The website also tells you when you are eligible to apply for a new card and suggests the best ones for you. It keeps track of your 5/24 status (more on that below), as well as how many points you have earned and your cash value. There are also a lot of articles and educational materials on the site. Best of all, this tool is free!
Be Creative
You may find that a particular spending requirement can be a stretch for you. I share some ideas in my Travel for Free in 6 Easy Steps post, but there are even more creative ways to meet your required spend.
One thing you can do is go out to dinner or travel with friends and use your credit card to pay the bill. Your friends can reimburse you with cash or using Venmo, Zelle, or the app de jour! You could also offer to pay for something expensive for a family member or friend and be reimbursed.
Another idea is to add an authorized user to your account. Note that you will pay this bill, so make sure you trust this person to reimburse you or it’s an expense you are covering with your household budget anyway (i.e. spouse or child).
You can also give to charity or pay your tithe using your card. Please be aware that the charity or church will have to pay a fee on this amount, so you may want to give a little extra. You can also send payments to vendors who don’t accept credit cards through Plastiq. This is not my favorite option because Plastiq charges a 2.85% fee. But if you have a ton of points on the line, it might be worth paying a small fee to get them!
Mistake 3: Not Knowing About 5/24
Perhaps the most common of all travel hacking mistakes to avoid is not knowing about Chase’s 5/24 rule. I had never heard of this rule before starting this hobby. It’s a good thing for beginners to know about from the very beginning.
In my opinion, Chase offers the best cards for travel hacking. Chase has generous spend bonuses, and I find Chase Ultimate Rewards points easiest to use for my travel habits. However, Chase is picky about how many cards you have applied for. In fact, they will not approve a user for a card if that person has applied for more then 5 cards in any 24 month period. If you are new to travel hacking, applying for 5 cards in two years sounds crazy! But it’s easy to do as you dive deeper into this hobby.
Any card that shows up on your personal credit report is counted towards your 5/24 status. This includes all personal credit cards, including those issued from banks other than Chase. Business cards are not usually included.
Chase’s 5/24 count also includes being listed as an authorized user on an account. This was one of my newbie mistakes. I listed my husband as an authorized user on my Chase Sapphire Preferred card, and he listed me as an authorized user on his Southwest Rapid Rewards. We unwittingly took up 1 of the 5 spots on each others’ 5/24 status. Fortunately, we haven’t gone too crazy applying for cards, so the damage is minimal.
Travel hacking experts recommend applying for all of the Chase cards you want first before focusing on other cards. Travel Freely will help you track your 5/24 status and will only recommend cards that you are eligible for.
Mistake 4: Using the Wrong Card
Travel hacking is called a hobby. The reason for this is that you must invest some time in it! Not spending a little bit of time each month to figure out what card to use where is certainly one of the easiest travel hacking mistakes to avoid.
All of your cards will reward you differently for certain spending. Some give you extra points for grocery stores, or gas, or drugstore purchases, and so on. Some cards, like Chase Freedom Flex, have rotating categories each quarter that you must keep track of. Others are a bit easier because they have a standard point rate for everything, like Chase Freedom Unlimited. Some cards will change benefits over time, too, so keeping track of that is crucial.
It pays to spend a few minutes each month figuring out how to best maximize your spending to earn the most points. You can create a spreadsheet with your common expenditures and just fill it out each month with the cards you should use for each. Some people like to mark their cards with notes as well. This can be as simple as writing the categories on masking tape on the card. But if you want to be fancy, you can use a label maker. (Although to be honest, I own this label maker, but I just try to memorize the categories each month! I’m not very fancy.)
Mistake 5: Spending Too Much
The last of the travel hacking mistakes to avoid is the dumbest but probably the easiest trap to fall into – spending too much! I know I’ve made silly purchases for things I didn’t really need thinking, “well, I’ll get all of those points for it!” Make sure you are only going for cards with spending goals you can meet within your normal budget so that you can avoid this temptation.
What travel hacking mistakes have you made?
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