My Foray Into Travel Hacking: Using Credit Cards with Airline Miles for Free Flights, Part 1

Jet-setting around the world for pennies, getting free upgrades to first-class on long-haul flights, and staying at world-class hotels for nothing. These are the mission statements of the travel hackers. As a relative newcomer to travel hacking and using frequent flier miles for free flights, I cannot speak to the truth of these mission statements – I have no idea if it’s possible to achieve these lofty goals or not. But I intend to find out.

A Case Study – Subject: Andy Kremer

Using Credit Cards to Maximize Your Frequent Flier Miles

For those not familiar with travel hacking, it’s the idea that you can drastically lower the cost of traveling by using airline frequent flier (FF) miles and hotel reward points. As any travel hacker will tell you, the biggest cache of points and miles comes from using credit card sign-ups.

Many different credit cards offer huge sign-up bonuses – anywhere from 50k to 100k miles – in addition to getting anywhere from 1 – 5 miles for every dollar spent on the card. Crazy as it may sound to all the personal finance people out there, I’m signing up with as many credit cards as I can to reap those sign-up rewards.

Multiple credit cards used for travel rewards

Bling Blang!

I was thinking, “well, if it’s not a travel card I don’t want it around”, and that was a mistake…

In The Beginning…

Before really diving into travel hacking, I was already doing a few things to maximize my miles and points. Because of this, I had a decent standing right from the outset. Here’s where I was when I started:[hr]

Date Credit Score Reward Miles/Points
04/01/12 754 71,05

Not too shabby, right? Well, that’s what I thought too. However it’s taken me years to build up that 71k combined miles/points. It included one credit card opening reward (Chase Sapphire), and numerous flights and hotel stays. Now let’s just compare those years of toiling towards a reward with my three months of travel hacking.

Three Months of Travel Hacking

Since I’ve started, I’ve opened up five new credit cards, closed one (more on that later), and joined five reward programs – a mix of both airline FF programs and hotel-point programs.

It’s been difficult keeping track of what’s going on with all the new credit cards and rewards programs. Many of the credit cards require a certain amount of money to be spent within a prescribed time limit in order to get the bonus. For example: spending $3,000 in three months, or $750 within one month. My favorite are the cards that simply give you a bonus after your first purchase. I make one purchase with it and put it away.

I’m using spreadsheets to help keep track of all the credit cards and their requirements, and I’m using Award Wallet to keep track of all the miles/points, reward program account numbers, and any promotions the reward programs are running. Here’s where I am after three months:

Date Credit Score # of CC opened Total # of CC # of CC closed Reward Miles/Points
04/01/12 754 0 2 1 71,057
05/01/12 755 2 3 0 79,023
06/05/12 742 3 5 0 143,836

 

As you can see, I’ve DOUBLED my points/miles within just three months, which is huge! The only real problem I’ve had so far is my score dropping 13 points. This isn’t too big of a drop, but is bigger than I was expecting.

What Caused the Drop in my Credit Score

My credit score didn’t drop due to opening a bunch of new cards. Instead, it was closing my REI credit card that I’ve had for over six years. Sticking with a credit card for a long time can improve your credit score. Now, the longest-running credit card in my flock has only been with me for 6 months.

The REI card had no annual fee either, so there was really no good reason to close it. I was just thinking, “well, if it’s not a travel card I don’t want it around”, and that was a mistake. I should’ve kept it and just let it sit. Lesson learned: don’t close a credit card unless you have a good reason.

My Travel Hacking Resources

Travel hacking is a very dynamic, specialized part of being a budget traveler. As such, I’m not trying to turn my blog into a travel hacking site – I’m only using it to tell you how it works out or doesn’t work out for myself.

There are so many airlines, banks, and hotels to pay attention to when travel hacking and the specials and deals are constantly changing, I’d recommend using the same resources I do to stay on top of it.

The Travel Hacking Specialists

My favorite blogs to go to are http://www.thepointsguy.com and http://www.millionmilesecrets.com. Thepointsguy.com is built as more of a complete repository of all things travel hacking, and millionmilesecrets.com is more of a traditional blog with many interviews, updates, and card reviews.

Other great resources are the flyertalk forum, and the person I learned the basics from: Matt Straub, a.k.a Matthew Magellan. His site is relatively new and under some construction, but he’s easy to get a hold of on Twitter, and I’m confident his site will be amazing.

Stay tuned…

I’m going to keep updating everyone on my travel hacking progress. Every quarter I’ll put out a post just to keep people informed, and let them know whether it’s working for me or not.

Have you ever tried travel hacking? Do you think it’s worth the hassle? Leave a comment and let us know.

Comments

  1. Golly, it makes my head hurt just thinking about travel hacking, but kudos to you for having the commitment to stick with it. I’ll be interested to see how it goes. I haven’t looked into it, but I don’t think we have such magnanimous sign-up bonuses in Canada.

  2. i have been with ae for 40 years, just got ae pr card and qaulified for
    25000 sub now they have 50 sub cant qualify because already have card and ae delta gold 50000 points and rewrds will be 25000.
    have ae biz but did not qualify in time for the 50required 5000 spent
    have 55000 sw, just did eextensive travel thailand panama canal, belize japan, did not get to use miles, also chase airtran charges
    little 69 annual fee as soon as isued, gosh am i blogging, i will shut up.

  3. There’s a misconception that dropping a card will automatically hurt the average age of your credit score, but in fact closed accounts will stay on your report for a fixed amount of time (I believe seven years) without indicating that they’re closed. It’s more likely that opening five cards gave you just a 15 point drop, which isn’t much.

  4. I blog frequently and I seriously appreciate your content.
    The article has truly peaked my interest. I’m going to book mark your site and keep checking for new information about once per week. I subscribed to your RSS feed too.

  5. Nice post. I learn something new and challenging on sites I stumbleupon every day.
    It’s always interesting to read content from other writers and practice a little something from other sites.

  6. I recently signed up for a Southwest Rapid Rewards card from Chase as $2000 in the first 3 months gives me 50,000 miles. I was looking into using it to load my Google Wallet card (prepaid debit) since I use Google Wallet a lot and that would get me the points now, but the fee is 2.9%, or roughly $21 for $1000 on the card. Does that seem about normal for what you see? It seems that $21 for 2 free round trip flights doesn’t seem bad.

    • I’d recommend you wait till January to hit the $2,000 mark on the card. Reason being, if you get 110,000 Rapid Rewards miles in one calendar year, you get a free companion pass for the remainder of that year and all of the next. Meaning, if you get 110k points in Jan. of 2014, you can choose someone to fly free with you on any Southwest flight for the rest of 2014 and all of 2015.

      Wait till 2014 to hit the mark, sign up for another of their cards (there are four total), and do whatever you need to to get the remaining 6000 points. If you end up spending a couple hundred bucks in fees, it’s still totally worth it to get 4 round trip flights for two people.

Trackbacks

  1. […] think I’ve hit a stumbling block with my foray into travel hacking. You see, in order to maximize your rewards, you need to apply to multiple credit cards at a time, […]

Speak Your Mind

*