When my wife and I got engaged one of the easiest decisions to make was on where to honeymoon- Italy. We love the food, we love the wine, and neither of us had been. Planning the trip only reinforced that decision, with the one caveat being that we’d need a solid 17 days to see the things we wanted to without feeling rushed. The time commitment wasn’t the problem. One of the benefits of being young, early in our careers, and sans any real reason possibility was the ability to take super long vacations. The problem was paying for the trip.
At the time, neither of us traveled much or had status of any kind, but we did have a wedding to pay for and decided that this would be the perfect time to enter the world of travel hacking. Long story short, we did our 17 day trip with our only real expense being food. And since that time, we’ve earned and redeemed well over a million miles. The best part is that these miles have come with little effort, and while my work travel has picked up significantly in recent years thus minimizing the need for the credit card offers, old habits die hard and I’ve been able to upgrade free flights to business class tickets just by sticking with the plan.
What is travel hacking?
Travel hacking is basically collecting frequent flyer miles without needing to fly. As with everything else, there’s a labyrinth of information on how to achieve this online and the truth is, the more time you spend researching the idea the more intimidating it becomes. That’s the main purpose for this post. I’m far too lazy to manufacture my spending and the thought of calculating a financial arbitrage between the cost of points accumulation and money spent gives me a headache. But that doesn’t mean I can’t continue this as a hobby utilizing my current spending habits and maximizing my return. All I need is a set of rules that helps me distinguish between a good offer and one that’s not right for me.
First and foremost, I pay my credit card bill in full each month. I have never carried over a balance and have no intention of starting anytime soon. This habit and the allure of miles can quickly snowball into a large mountain of debt, and no mattter how you slice it, points are never worth going into debt.
Second, I know what I spend each month on my credit card bill and I will not sign up for a promotional offer that does not fit my existing spending habits. Chasing points is a dangerous way to justify an expense. “I should totally buy this new TV, because this TV comes with Netflix and 25,000 bonus miles”. I would think this way so it’s a rule. Not gonna do that either.
Finally, I try to be realistic with how I would use my points. When we lived in our condo, we were close to the Southwest Airlines airport; now that we’ve moved, we’re closer to the other airport with all the other miles. I love Southwest and have achieved companion status through their credit card offers many times, but now when I see that offer pop up I let it go because it’s inconvenient.
These rules aren’t meant for everyone but they’re a common sense way to separate the offers that should be appealing to you and the ones that maybe shouldn’t. When you read some of the travel blogs or message boards, the chase for the points is sometimes overshadowed by common sense. One simple way to combat that is to exercise common sense.
What about credit score
This is the main reason people cite for not wanting to open multiple cards for the sign up bonus, but I’ve actually found the impact on my score to be negligible. Obviously monitor your score so you know how you’re being impacted personally but I open 3-4 new cards a year and my credit score has only gone up from when I first started playing this game. It’s true that the credit card company’s inquiry into your credit will have a slight negative effect on your score but that is usually more than offset by the lower credit utilization ratio that the new credit from the additional card provides.
How do I get started?
If this is something you’re interested in doing more of and don’t know where to start, I would suggest reading millionmilesecrets.com
. We have no affiliation with either of those sites, I’m just a fan of their work and their transparency with credit card offers. I would start with one card, get the bonus points and if it felt easy enough, try another. If you enjoy it, you’ll eventually end up with 3 or 4 cards at a time and drive your spouse crazy (until you’re flying to Europe in first class).