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How to Start Travel Hacking

Many people ask me how to start travel hacking.  There is so much information out there that sometimes it can be overwhelming and therefore many people never get started.  In this article, I aim to give you a step by step guide on how to get started.  This won’t contain any advanced techniques but just the fundamentals.  I’ll go over the following topics:

  • Pre-requisite information you should know
  • Which credit cards to get first and signup bonuses
  • Case Study: Earning points for a sample trip

Prerequisites

Always, Always, Always Pay your Credit Cards off Each Month

Travel hacking is only worth it if you pay your full balance each month.  If you are paying finance charges and interest you are not traveling for free.  You would be paying for it through interest rates.  Never increase your spend just for points.  There are some advanced techniques that teach you how to “manufacture spend” but we are not going to discuss that in this article.  Perhaps in a future article  Always stay within your budget and never buy something just because you’ll get points.

 

Know Your Credit Score

Before you start applying for cards, make sure you have a good credit score.  It’s no fun to start your travel hacking only to be denied credit and get useless credit inquiries on your credit report.  You should have a minimum score of 700 to begin.  If you have any collections or incorrect information on your report, I recommend talking to a reputable credit advisor.  There are many scam artists in this arena so please find a reputable company by seeking referrals and by researching the company on the Better Business Bureau.

 

Go Slow and Steady

Do not apply for a bunch of cards at once.  Apply one at a time until you are comfortable with the idea of having multiple cards.  Advanced travel hackers have techniques such as an “app-o-rama” where they fill out multiple apps within 24 hours and get only a single inquiry on their credit report.  However, credit card companies are becoming wise to these techniques.  They may reject your applications or worse ban you from getting any of their credit cards.  Understand that your relationship with the credit card companies, be it Chase, Amex, Citi, or any other issuer, should be a mutually beneficial business relationship.  If they believe that you are trying to “game” the system, they may not want to do business with you.

 

Which Credit Cards should I start with?

Chase has a rule which is known as the “5/24 rule.”  This means that Chase will not approve additional credit to you if you have gotten at least 5 credit cards over the last 24 months.  For this reason, I recommend for newbies to start with Chase cards.  In addition, Chase business cards do not count toward the 5/24 credit card count so its ideal to start with a Chase business card.

Card #1

Chase Ink Business Preferred

What You Get

  • 80k sign up bonus (worth at least $1000 if you redeem the points through the Chase travel portal).
  • Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year.  1x points on everything else.
  • Minimum Spend Requirement (MSR) of $5,000 in the next 3 months.

Card #2

Chase Sapphire Preferred

What You Get

  • 60k sign up bonus (worth at least $750 if you redeem the points through the Chase travel portal).
  • 2X points on travel and dining at restaurants worldwide.  1x points on everything else.
  • Minimum Spend Requirement (MSR) of $4,000 in the next 3 months.

 

So far, if you are following the above guide, you’ll have 140k Chase Ultimate Reward points.  If you have a spouse and they follow the same guide, together you’ll have 280k points!  That’s enough to take some amazing trips already, but we are not done yet.  Assuming you are taking it slow and have met the MSR on the above cards and received your points, its now time to apply for the next card.  Also note, that your current status 1/24 since the Chase Ink Business card will not count against your 5/24 status (Only the Sapphire Preferred card will).   Let’s assume you live in the US and would like to travel domestically.  Let’s also assume you live near a Southwest Airlines hub.

 

Card #3

Southwest Rapid Rewards Plus

What You Get

  • 40k Southwest Rapid Reward sign up bonus
  • 2 points per $1 spent on Southwest® purchases and Rapid Rewards® hotel and car rental partner purchases. 1x points on everything else.
  • Minimum Spend Requirement (MSR) of $4,000 in the next 3 months.

 

Card #4

Southwest Rapid Rewards Premier Business

What You Get

  • 60k Southwest Rapid Reward sign up bonus
  • 2 points per $1 spent on Southwest® purchases and Rapid Rewards® hotel and car rental partner purchases. 1x points on everything else.
  • Minimum Spend Requirement (MSR) of $3,000 in the next 3 months.

 

After meeting your MSR on these 2 Southwest cards you’ll end up with 100k Southwest Rapid Reward points.  If you can manage to earn an additional 10k Southwest Rapid Reward points in one calendar year, you’ll earn enough to earn the Southwest Companion Pass.  The will enable you to designate a companion who can travel for free with you through the next calendar year.  This can be a huge savings for families.  You can still use your 110k points to book an award ticket for yourself and a companion can travel for free.  In addition, if you and your spouse both apply for these cards and you both earn 110k Southwest points, each of you can designate a companion to travel for free while each spouse can book a free award ticket.  Thats 4 free tickets!

 

 

Case Study

Let’s assume you are a family of 5 and you’ve followed the above steps.  What can you do with all these points.  Lets put together some sample itineraries.

Trip 1 – IND -> TPA

  • Each spouse has earned 110k Southwest points and has the companion pass.
  • Currently, on Southwest’s site a one way ticket to Tampa Bay will run 7,596 points for a total of 15,192 points roundtrip per person.  I checked flights for mid-October.  This may change during peak travel season.

 

So you and your spouse can use about 45k Rapid Reward points and purchase 3 award tickets.  Then with the companion pass you’ll get 2 additional seats for free.  You will have to pay taxes and fees for each traveller which is a measly $11.20 per person.  After this trip, you’ll still have 175k Rapid Reward points remaining and you still have the Companion Passes as well!

 

Trip 2 – IND -> SAN

Let’s assume our imaginary family of 5 would now like to travel to the beaches of San Diego.  Looking on the Chase Travel Portal, we can see that a round trip ticket from Indianapolis to San Diego in October will run about 21k Chase Ultimate Reward Points.

For a family of 5, thats about 105k points.  Then add about another 25k Chase points for a car rental and you are all in for 130k.  You’ll still have 150k Ultimate Rewards points remaining for future trips!

Of course much of this is dependent on where you are flying from and where you are going.  It’s also dependent on award seat availability and the amount of points may differ depending on when you are traveling.  But I hope this quick guide will be a good starting point for you to begin your travel hacking journey.

 


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