Intro to Travel Hacking
How to travel for (almost) free
A lot of friends and family ask me how I travel often while still being in school. I tend to give a lot of them the same advice so I figured I’d sum it up here.
Just to be clear, I’m no expert on travel hacking. There are plenty of bloggers, like Daraius from Million Mile Secrets and Ben from One Mile at a Time, that write full-time about travel hacks and a lot of what I know is influenced by what I’ve read on their blogs. I do, however, have a few tricks up my sleeve and have earned over 1,000,000 miles spending only a few hours a month, if that, collecting miles.
Follow these four steps to get started
1) Sign-up for frequent flier programs
This seems pretty intuitive but you’d be surprised by the amount of people who don’t sign-up for frequent flier programs. You can sign-up for most programs in a few minutes and then all you have to do is add your mileage number when you’re purchasing a ticket to begin collecting miles.
If you fly often enough, you’ll be able to speed through security via priority pass, get free checked bags, access to air lounges, and even free class upgrades.
2) Leverage travel alliances
Many people make the mistake of signing-up for every frequent flier program. As a result, they collect a lot of miles but they are all in different accounts, making it difficult to cash-in for a free ticket. I recommend people sign-up for only one frequent flier program per travel alliance.
Some popular travel alliances:
- Star Alliance: US Airways, United, Swiss, Singapore Airlines, Lufthansa and 20 others.
- One World: American Airlines, British Airways, Qantas, and 9 others.
- Sky Team: Delta, KLM, Alitalia, and 16 others.
By signing up for United, American Airlines, and Delta’s frequent flier programs, you’ll already have coverage on most airlines. When you fly on another airline in the alliance, be sure to still use the reward number for the airline you’re collecting miles from. I personally try and fly on only one alliance (can you guess which one?) to maximize my mileage.
Just keep in mind, not all miles and travel alliances are the same; there are some reward programs that will really let you maximize your travel, but more on that in a future post.
3) Get a solid reward card and use it
All credit cards offer some sort of reward for use but some are immensely more valuable. In general, the credit cards that offer cash-back are often the worst cards.
Popular cards, like Capital One’s Venture card, rope people in by promising cash rewards or the ability to book on any flight. The problems is that the value of their rewards is super low. — only 1 cent per mile. Although it’s nice to be able to trade in 10,000 miles for a $100 reward, what if I told you you should be able to trade in that 10,000 miles for a $300-$400 reward? If you’re really on top of your game you might even get more than 4 cents per mile.
Ok, so what is the best card? It really varies. The best card for you will depend on where you typically fly, where you would like to fly with your rewards, and what benefits matter to you. Two safe bets, regardless of your preferences, are the Chase Sapphire Preferred and Starwood Preferred Guest cards because they have several airline and hotel partners that you can transfer your points to. Other reward cards offer the same flexibility but these two have the best partner redemption options.
Once you get a reward card, use it for everything. Seriously! A lot of people get a reward card but use it sparingly. I literally never use cash or debit unless somewhere does not accept credit cards or charges a fee for use. By using your reward card on all your expenses, you’ll easily rack up thousands of points a year. Even better yet, if you pay your credits cards in full each month (which you should!), you’ll avoid any interest charges and it will help build your credit history.
4) Take advantage of credit card signup bonuses
The single most effective way to get a lot of points is by taking advantage of a credit card sign-up bonus. If you have solid credit, you can easily sign-up for 1-2 cards a year and get roughly 50,000 miles per card in the process. Just one of those sign-up bonuses is more than enough for a round-trip ticket to Europe!
If you time it right, you can do even better. Last year, for example, British Airways and American Express offered 100,000 mile sign-up bonuses.
But, doesn’t applying for a card negatively affect my credit score? Yes it does, but the effect is small (less than 5 points) and it will actually help you in the long-term because it increases your available credit/decrease your credit utilization ratio. Unless you plan on applying for a major loan in the next year or two, you shouldn’t be worried about it.
If you’re interested in applying for a card, leave a comment, or tweet at me and I’ll give you some great options.
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