As the New Year approaches, I wanted to share the value I have received from travel hacking in 2017.
In case you are unaware, travel hacking means that you can obtain free flights and accommodations for travel using specific credit card points and sign up bonuses.
I learned about travel hacking back in the spring of 2015. At this point, I was still on my journey to pay off my $55k student loan bill. I always followed Dave Ramsey’s debt payoff methods and always thought that using credit cards are bad and I should stay away at all costs. However, through researching, I found that this wasn’t the case for me. I learned that credit cards could provide significant value when used responsibly. I became very responsible for paying off my student loans and decided I should gain some value in return for my expenses. Since flights and hotels are usually the most expensive part of traveling, it made a lot of sense to reduce the cost as much as possible in order to maximize my travel experiences.
Disclaimer: If you are unable to pay a credit card bill monthly in full, you should not proceed with credit cards. No amount of rewards is worth accumulating debt for.
Your Credit
To receive the best credit card bonuses – you should have a good credit score. Typically it’s required that you have at least a 700, and most of the time over a 750 credit score to be approved for the top cards that will give the most travel value.
If you aren’t at the point to be approved, it’s ok. I would recommend to look up your credit score for free on Credit Karma or Credit Sesame. From there, take steps to improve your credit so you can get one of the top travel cards in the future.
Related post: Introduction to Travel Hacking
Minimum Spend
One of the most critical parts of successful travel hacking is meeting the minimum spend requirements on travel credit cards. Typically for the premium credit cards, it will require anywhere from $2k to $5k in spend within the first three months of owning the card to obtain the sign-up bonus. Receiving the credit card signup bonus is critical to making travel hacking worth it. If you cannot meet these spend amounts, you shouldn’t get the card.
While I was still paying off my student loans, I was able to make a credit card payment each month on top of the minimum balance that was due. Through this method, I was able to meet minimum spend requirements for two premium credit cards and earned over 160k Chase Ultimate Rewards points. Unfortunately, my former student company (Great Lakes) stopped this method of payment on 1/1/2017 (it was great while it lasted).
Now that I am out of debt, I have to be a little more creative to meet the minimum spend requirements for new cards. My average monthly spending is around $1200 to $1500 a month, and most of that I cannot put on a credit card (without a fee); for example – Rent and utility bills. So I have to find ways outside of my regular spending to meet minimum spend now.
How I Meet Minimum Spend
I have found out that my side hustle: Flipping items for extra money is an excellent way for me to meet minimum spend and earn money at the same time. Also, planning to get a credit card when you know you have more significant expenses coming up is a smart idea. For example Taxes, gifts, weddings, or any more substantial purchase.
What Cards I Recommend
I recommend using Chase branded cards when you are getting started. After all my research I have found that the premium Chase cards provide the most travel value and flexibility. You can transfer points to travel partners (airlines, hotels, and rental cars) or use the Chase Ultimate Rewards portal to book travel/activities at a discount.
Also, Chase has a 5/24 rule – meaning you cant open more than five credit cards within 24 months. Because of the 5/24 rule, it’s essential to sign up for Chase cards first so you will be approved. Once you are over five chase credit cards in 24 months, you can then move on to other cards.
I recommend checking out this cool credit card research tool to see all your options.
Cards I Used this year
Chase Sapphire Reserve
Applied and was approved for this (premium) card in the fall of 2016 and reaped the benefits for my 2017 trips. I was lucky enough to earn 100k points off the sign-up bonus (now $50k bonus). This card provides a ton of value b/c it came with $300 in travel credits, free TSA Pre/Global Entry, and free Priority-Pass airport lounge access, in addition to the 100k points.
Before the year was up, I downgraded this card to a Chase Freedom to avoid the $450 annual fee and not cancel the account.
Chase Sapphire Preferred*
2017 was my 2nd time applying for this (premium) card. My first time was in May of 2015. Since 24 months past, I was able to apply again.
Applied and was approved for this card in August of 2017. I was lucky to be approved before Chase changed their rule on having the Chase Sapphire Reserve and Preferred at the same time.
I recommend the Sapphire Preferred card for beginners to travel hacking. The first year’s annual fee gets waived, and this card comes with a lot of cool perks + 50k sign up bonus. You can downgrade the card after a year to avoid paying an annual fee.
Chase Freedom*
The Freedom is a free (non-premium) card. I use my Freedom card for purchases in their rotating 5x categories and use my other cards for all additional spending. I downgraded my Sapphire Reserve card to this card to avoid the annual fee and to keep my credit history.
Downgrading is a great way to avoid annual fees and keep your credit history length.
You can transfer the points you earn with your freedom card to one of the premium Chase cards (Reserve, Preferred, or Ink Preferred) to get the most value from your points.
Chase Freedom Unlimited*
Similar to the Chase Freedom, the Freedom Unlimited is a free (non-premium) card. It’s 1.5x on all purchases. I use this card for regular purchases that I wouldn’t get any bonus point for with my other cards.
You can transfer points to the premium cards and downgrade premium cards to it as well.
Southwest Cards
I signed up for the 2 Chase Southwest cards below to get the Southwest Companion Pass. To obtain the Companion Pass, you must earn 110k southwest rapid rewards points. That would be pretty hard to do if you earned those points through flying only. Luckily, the Southwest-branded credit cards count towards the points need for Companion Pass.
I signed up for both on the same day in September with a bonus offer of 60k per card.
The Companion Pass is valid for the current year and the next calendar year. Your goal should be obtaining it early in a calendar year, so you maximize the time you have it. I am planning on meeting the minimum spend on both the Southwest “Premier” and “Plus” cards in early Jan 2018. So I would get 120k points and the Companion pass status for all of 2018 and 2019.
Links with * above indicates a refer a friend link. If you were to sign up and be approved, I would get a small compensation in Chase Ultimate Rewards points.
2017 Trips & Financials
Travel Hacking has given me the opportunity to take three amazing trips this year. One of the trips was overseas to Europe, which I wouldn’t have been able to pull off without travel hacking.
Europe Trip Report
Total Spent: $900.22
Estimated Cost without using points: $3390.02
Flight: Free with points (only paid taxes) – Included flights to Rome, Florence, Paris, and back to the US.
Accommodations: Airbnb* (earn $40 in free credit with my refer a friend link)
Highlights: Colosseum underground tour, Rome Cooking class, Vatican, Cinque Terre day trip, Tuscany day trip, Florence, Eiffel Tower, the Louvre museum, Seine River cruise, Swiss airport lounge in Zurich, and the fantastic Italian and French food. (I acquired most of our activities with points or partial points through the Chase Ultimate Rewards portal)
Colorado Trip Report
Total Spent: $390.36
Estimated Cost without using Points: $1028.50
Flight: $25 total (mainly used points) + taxes
Accommodations: Hyatt (free with points) and Tiny House
Highlights: Pikes Peak, Garden of the Gods, Royal Gorge Bridge, Rocky Mountain National Park, and staying in a Tiny House.
Vancouver Trip Report
Total Spend: $619
Estimated Cost without using points: $619 – didn’t use points on this trip
Flight: Paid in full – decided to save points
Accommodations: Airbnb split four ways
Highlights: Whistler, Lynn Canyon Park, Lighthouse Park, hiking, and airport lounges
Final Numbers for 2017
Total Paid: $1909.58
Total Estimated Cost without Points: $5037.52
Total Savings: $3127.94
2018 Travel Hacking Plans
I met my Chase Sapphire Preferred minimum spend in early November and will meet the minimum spend for the Southwest Companion Pass in early January. To utilize the Companion Pass, I’m planning a lot of domestic travel this year. Southwest will be adding flights to Hawaii in 2018 🙂 so that could be a possible destination in the next two years.
So far, I have a trip booked in September 2018 for Disney World and Fincon. My goal is to open up 1-2 cards in 2018 to do Disney for free.
I also received a 2018 National Park Pass, so I want to schedule at least 4-5 National Park trips across the US next year.
My Travel Budget
In addition to travel hacking, I also save money for travel automatically.
I use the Capital One 360 High-Interest Savings Account* (refer a friend link) to save 2x per month automatically. My Capital One 360 account is excellent because I can create multiple savings accounts (Travel, Gifts, Emergency, Business, etc.) all in the same place. I set up automatic deposits, and I never have to worry about saving for travel – its done automatically on the 1st and 15th each month.
It now has a 1% APR interest rate, too!
After I get back from trips, I transfer the money I spent on my credit cards from Capital One 360 to my checking account, so my monthly cash flow isn’t affected.
Final Thoughts
As you can see from my total savings this year (over $3,000 in savings), travel hacking can be a great value to enjoy traveling now (even if you are paying off debt).
I recommend Chase cards first because I know first-hand the value that they have provided me. The value and flexibility to be able to transfer points to travel partners and book using the Ultimate Rewards portal cant be beaten amongst other travel cards.
I also can’t stress enough how important it is always to pay your credit card balance in full (never accumulate debt) and to be able to meet the minimum spend. If you cant do both, then I recommend not getting into travel hacking.
All in all, if you have the means to meet the minimum spend requirements and pay off your credit cards responsibly travel hacking can be a great hobby to see more of the world for less $. I only started this hobby in the last few years and had a great experience so far. If you haven’t tried travel hacking, I recommend getting started and see what trips are possible for you.
Question for You!
What trips have you been on recently?
How do you get the most value when you travel?
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Gary is the author behind Debt Free Climb, a blog that shows how to live intentionally, pay off their debt, build a side income, and travel the world
Gary's favorite free financial tool he’s been using since 2017 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments.
His favorite way to save automatically is Capital One Performance Saving, a bank that allows him to create multiple high-interest savings accounts and create an automatic savings plans for each account. He uses these features to meet short and long term savings goals.
His favorite way to save money on car insurance is by using Root, an app-based car insurance service. He saved $240 this year after switching from Geico to Root
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Awesome job with all of those points man. I’m about to qualify for the Companion Pass in a few days, so my wife and I are going to be doing a ton of domestic travel this year.
It’s crazy to think that just 12 months ago, I literally only had 1 credit card (my old Citi card from back when I was in college) and refused to do any travel hacking or open up any cards. If you’re good with your money, travel hacking is just a nice way to get a little bit of return on the spend you’re already doing. No, you won’t get rich travel hacking, but it’s getting something back for what can be very minimal work.
Nice, FP!
I remember when you posted about the Companion Pass back in September. Perfect time to get it. The other day (Jan 1st) I split my car insurance payment and met the min spend on both cards. So ill get my companion pass when my statement closes later this month.
Dang! I need to get on this Saphire card game, heard nothing but great things about the rewards. The travel hack bug is strong haha! That’s huge savings Gary, I’m gonna be asking you for some assistance in the near future!
Sounds good Javi! Looking forward to chatting.
Thanks for suggesting ideas.Really helpful .
found very interesting going through this article as on how to save money.Keep writing.
Thanks, Indexia!
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