When I first started researching miles and points I found that the majority of blogs were written by young professionals or wealthy families who were taking first class luxury trips around the world. While there is nothing wrong with aspirational travel, those kinds of trips are not a reality for my family. The amount of miles required for one first class flight could mean two flights in coach for one of us. I’m writing this blog to share with you my tips on how to travel hack with a family. I hope this simplified version will help you give you an idea of what travel hacking is and help you to make that first step towards starting your miles and points journey.
So, what is travel hacking?
Travel hacking is when one earns miles and points by signing up for credit card bonuses and using those bonuses to book travel. For example: a typical domestic flight booked on miles costs 25,000 miles roundtrip. You sign up for an American Airlines Citi credit card and earn 50,000 miles after spending $3,000 in the first 3 months. Voila! You have earned enough miles for two domestic round trip tickets!
Ok, this sounds interesting. What’s the catch?
Show me the money!
Know your credit score. Your credit score should be at least 730 with no recent bankruptcies. You can find your credit score by signing up with Credit Karma or Credit Sesame, they are both free of charge. Sometimes finding out your credit score is a little like stepping on the scale, we don’t want to know the number! In this hobby, the first step is crucial. Many are worried that applying for credit cards will affect their credit score negatively. While it’s true that you may see your credit score drop a few points after an initial application, it usually rebounds after a couple of months. I can tell you that in the past three years, my husband and I have both applied for over 10 credit cards each and both of our credit scores have improved by almost 100 points!
This hobby is not for everyone. If you are in debt you should not apply for credit cards. You should be able to pay off your credit card balances every month. Paying interest every month negates the points you earn.
If you will be applying for a mortgage or car loan in the next few months, do not apply for new credit cards now.
Before applying for credit cards you should be able to meet the minimum spend. This is the amount required you spend in a certain amount of time (usually $3,000 in 3 months) in order to receive your sign up bonus. For our large family this has never been a problem. We pay for everything with the card we’re trying to meet minimum spend with. Some examples of how we meet our minimum spend include paying for groceries, gas, cell phone, electric/trash/water bills, Netflix/Hulu/Amazon, cable, school lunches, kids sports, etc. Pay for doctors appointments/prescriptions (not your FSA card). If we have a large minimum spend to meet (like when we apply for two cards at one time) we’ll consider paying our mortgage, car payment and college tuition (this usually includes paying a small fee). Paying monthly bills plus day to day expenses add up very quickly!
Ok! We’re ready to travel – where do we start?
Get organized! This step may not seem important when you sign up for that first credit card, but when you’re on credit card number eight and you’re trying to figure out your sign up date on the third card, you’ll be glad you did this first step!
Sign up for airline and hotel reward programs and make sure every flight and hotel stay gets credited -those miles and points DO add up! (more on this soon!)
Start a spreadsheet to keep track of your new credit cards. This will help you stay on top of application dates, bonuses, annual fees, etc.
Most importantly, have a trip (or two) in mind before applying for your first card. Be purposeful when applying. Always have a plan! I talk to so many people that say “I got this card but I’m not sure what I can do with these points”. Start with the end in mind.
Things to consider:
There are several major credit card companies and they each have rules on how they approve you, how many times you can get a bonus, etc. Here are a few of the most important.
American Express. AMEX only lets you receive a card bonus once a lifetime. For this reason you want to make sure you’re applying for a card when they have the highest possible bonus.
Chase. Chase has some of the most lucrative sign up bonuses and some of the most restrictive rules. Chase will only approve you for a card if you are under the 5/24 rule. This means you can’t have applied for more than 5 credit cards in the past 24 months. For this reason, we encourage (insist!) you start with Chase cards before moving on to other bank cards.
Citi Bank. Citi only allows you to earn a sign up bonus once every 2 years per award program (i.e., one AAdvantage card per 24 months, one Hilton card, etc. Business cards are excluded in this rule) The clock starts ticking as soon as you apply OR close a card.
Coming Soon: How to Earn miles and Which credit cards to apply for first