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.
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|
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|
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.
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.