Today’s guest post, by writer Anna Kucirkova, lays out the basics of “travel hacking.” If you aren’t familiar with the concept, read on — it may help to inspire you to invest the effort it takes to start seeing the world for free, or at least less.
Baby boomers with the time to devote to forming a comprehensive strategy and with credit scores sufficiently high to become accomplished hackers may use these methods to land free flights, hotel rooms, and other travel perks.
Hacking is really no more than capitalizing on money you might spend anyway to take full advantage of all those enticing credit card offers you see on TV — and seeking out others as well.
But be sure to heed Anna’s warnings about common travel hacking mistakes. If you’re a “credit-aholic,” who has difficulty managing credit cards, your “free” travel may end up costing you a small fortune.
Don’t miss NerdWallet’s list of the top travel credit cards for 2018 at the end of the post.
By Anna Kucirkova
There’s a giant world out there just full of things to explore — countries you’ve never been to, oceans you’ve never swum in, foods you’ve never eaten. You read about these places, you see them on TV, and you enviously scroll through endless Instagram feeds of strangers traveling to these distant lands.
You want to travel, you want to explore, you want to see anything and everything, but there’s just one problem: Traveling is expensive.
Or is it?
Have you ever really sat down and wondered what’s holding you back from accomplishing your travel dreams? Have you thought to yourself, “How do these people do it? How do they travel endlessly and explore the world and not end up totally broke?”
Enter Travel Hacking
Never heard of it? That’s not surprising. Not everyone is on a first-name basis with travel hacking, and that’s understandable. It’s more than just a strategy, it’s a travel art-form, and if you’re not familiar with it, we want to introduce you to it.
So, if you’re ready to learn the ins and outs of travel hacking, get a clearer picture of how you can apply it to your life, and figure out the best ways to go about it, then strap on your adventure goggles and keep reading.
Let’s start with the basics.
Travel hacking is the art of collecting frequent flyer points, miles, and other rewards to get free stuff, like flights, hotels, tours, experiences, food, and more! In short, it’s a number of different tips, tricks, and strategies that can help make traveling not only easier, but also significantly cheaper.
Travel hacking is more than that, though. Sure, it’s a strategy to get you free things, cheaper rooms, and better flights, but it’s also a way of life that allows you to live by your own rules. It’s your ticket to Tahiti, your passport to Paris, and your charter to Colombia. Travel hacking allows you to live the life you’ve always dreamed of right now. What’s more valuable than that?
Making Use of Travel Points
Let’s break this down a little bit further. Travel hacking encourages the use of your travel points. What exactly are those? Travel points, also known as airline miles or frequent flyer miles, are a part of loyalty programs that are offered by both airlines and credit card companies.
You typically will acquire a set amount of miles based on how much you spend on your select credit cards and how frequently or far you fly. These travel points essentially turn into credited miles for future flights, hotel rooms, and other travel expenses like food, experiences, and tours.
Sounds simple, right? It can be! But it can also be fairly complicated.
For starters, “miles” don’t actually equate to real miles, so make sure you understand how your rewards program works. Additionally, travel hacking takes some planning and strategizing on your part.
We know when we say hacking you may think we mean you have to spend hours hunched over your computer trying to crack the code or insert the skeleton key to get the best deal, but this isn’t the case. All you need is a little strategy, some time, and patience to get the deals you want.
This typically requires things like signing up for all the rewards and frequent flyer programs that you can, being a repeat customer, paying your credit card bill in full every month (too much debt means no rewards!), meeting minimum spending requirements, and other similar things.
That’s a lot to process, so we’ll break it down even further.
How Can I Travel Hack the Right Way?
Travel hacking the right way isn’t all that difficult — if you know what you’re doing. Let’s go over a few of the most common issues prospective travel hackers have to get a better idea of how to get it done the right way.
First, you’re probably wondering what kind of credit card and credit score you might need to accomplish successful travel hacking. You’ll need a relatively stable credit score to open up a few different credit cards with loyalty programs.
These credit cards can offer relatively hefty sign-on bonuses, as well as rewards for different purchases made on the card. You’ll typically be opening credit card accounts with airlines and companies with annual fees, so make sure you evaluate whether or not you’re able to pay the annual fees so you don’t have to close the card too quickly.
You may be wondering why credit card companies and airlines offer credit cards with travel points and rewards. It might sound like free cashback and free rewards, but truthfully, you’ll be paying the credit card companies a bit more than you would without loyalty programs.
They offer you solid incentives for opening up their cards, and in return you’ll also be dedicating more of your money to that company. Why wouldn’t a credit card company want you to send more cash their way?
What are some of the best credit card programs for travel hacking?
According to Forbes.com, Citi Double Cash, American Express Starwood Preferred Guest Credit Card, Chase Sapphire Preferred Card, and the Capital One Venture Card all offer great rewards and perks for reasonable fees.
Travel Hacking Mistakes
Travel hacking is a great, strategic way to get to places you want to be, travel the world, and cross destinations off your bucket list, but it can be a tricky business. Make sure that when you’re beginning your travel hacking process, you keep an eye out for these common mistakes:
* Taking on Hefty Annual Fees
Make sure that your travel hacking accounts aren’t going to leave you in the lurch. Some people don’t see past the benefits and incentives of opening loyalty and reward accounts and miss the hefty annual fees that often come along with them.
The credit card company may waive the annual fee the first year, but hit you with it in following years.
Ensure your credit score is up to the task of taking a few hits, too. You don’t want to charge in with low credit and accidentally make it worse.
* Ignoring Spending Minimums
Many programs that provide you with points require you to spend a minimum each month or spend a minimum total (often high) in the first few months after you open the account. If you don’t, you won’t get any points or worse, you’ll be faced with penalties. Watch out for this when you’re signing up and make sure you keep track of your minimum requirements.
* Spending More than You Would with Cash
It’s easy to get caught up with spending on a credit card. This means you can end up spending more than you would with cash or a debit card.
Don’t do this! Make sure you’re not spending more than you’re able to or more than you would if you were paying with cash. Credit cards are great if you’re careful and thoughtful, so keep your spending habits in check.
* Forgetting To Pay Your Balances Every Month
No matter how ideal these programs are, you have to remember — they’re still credit cards. You have to pay them off to avoid fees and penalties. So, keep a close eye on your credit cards, payment schedules, and more to keep your credit score healthy and your wallet heavy.
Just make sure that you’re always aware of the fees associated with opening up loyalty and reward accounts or programs.
Additionally, set up schedules and reminders for each of your accounts to ensure you’re both spending any minimum monthly requirements and also paying off the balances every month in full.
But with the right strategy, sufficient research, and plenty of time, you can be travel hacking your way across the globe sooner than you think!
About the author: Anna Kucirkova blogs for a financial website based in Wisconsin.
Note: NerdWallet.com has an excellent piece about the Best Travel Credit Cards of 2018. Here’s the list:
- Chase Sapphire Preferred® Card
: Best for Airline miles and a large bonus
- Capital One® Venture® Rewards Credit Card
: Best for Flat-rate travel rewards
- Bank of America® Travel Rewards Credit Card
: Best for No annual fee
- Bank of America® Premium Rewards® Credit Card
: Best for Relationship rewards
- The Platinum Card® from American Express
: Best for Luxury perks
- Chase Sapphire Reserve®
: Best for Premium travel rewards
- Ink Business Preferred℠ Credit Card
: Best for Business travelers
- United MileagePlus® Explorer Card
: Best for Best airline credit card