What is Travel Hacking?
Travel hacking is the art of stretching your dollars to the max by taking advantage of free perks and rewards. This is usually done by signing up for certain credit cards and capitalizing on their "point" systems.
Depending on the credit card, you can convert your points to dollars for use on plane tickets, hotel stays, restaurants and more. By using travel hacking, you can save hundreds or even thousands of dollars on your travel expenses.
How to Start Your Travel Hacking Journey
The great thing about travel hacking is that anyone can do it! However, it will take some time, practice and research to get good at it and to choose the right credit cards to use to your advantage. Here's how to get started:
Plan Your Trip in Advance
The catch with using any type of credit card points is that it typically takes several months to accumulate enough points to receive the sign-up bonus. Additionally, it takes a month or two for the company to process the sign-up bonus so that you can receive said points.
You also can't use points from certain credit cards with every airline or booking service. Therefore, it's important to plan your trip in advance, including flights, booking arrangements and so forth, so that you choose a credit card with useful rewards.
Choose the Right Credit Cards
Once you have a general idea of where you're going and what you want to do, you're ready to choose your credit cards. The key is to pick cards that offer sign-up bonuses to new customers who spend a certain amount of money within the first several months of receiving their card.
Chase, for instance, has two of the most popular credit cards for travel on the market - Sapphire Preferred and Sapphire Reserve. With either card, you get 60,000 bonus points when you spend $4,000 within the first three months of activating your card. You can then use those points to purchase plane tickets or book hotels through the Chase Travel Portal.
In addition to general travel credit cards, you can also sign up for cards from specific airlines. If you meet the sign-up bonus requirement, the points are often enough to purchase at least one or two plane tickets for the airline in question.
Pay the Card as You Go
Regardless of which credit card or cards you sign up for, it's essential to pay off the balance as you go. Otherwise, your credit score will tank and you won't be able to sign up for new cards. In most cases, you also can't use the points you earn if you have unpaid dues on your card.
Book Your Trip
When you have enough points, you're ready for the fun part of travel hacking - booking your trip! Be sure to purchase airline tickets and book hotels directly through your credit card company. For instance, Chase, Capital One and other credit card companies have platforms where you can book travel arrangements directly through them.
Or, if you signed up for a credit card through an airline, such as Delta, United or Allegiant, you can use your points when you purchase tickets through their website. Simply choose the "Apply Your Point" option when you go to checkout.
Cancel or Discontinue Using the Card
Once you've used your sign-up bonus points and used your credit card to book your trip, you can cancel it. You should do this 11 months after signing up for the card so that you can avoid annual fees and charges.
If you're nervous that canceling the card will hurt your credit score, you can simply pay off any remaining balances and stop using the card.
Travel Hacking Tips and Tricks
If you want to make the most of travel hacking, here are a few additional tips and tricks to keep in mind:
- Don't spend more than you can afford to meet the sign-up bonuses.
- Always pay your credit card balances in full and on time.
- Read the fine print on any credit cards you apply for to make sure you understand the terms and conditions.
- If you plan to continue using the card, make sure the bonuses and perks outweigh any annual fees.
- Only choose credit cards with loyalty programs and points you know you can use.
If you keep these tips and tricks in mind and do enough credit card research, you'll be travel hacking like a pro in no time!