It seems like every time I get on the debt free community posts they are talking about travel hacking. For those of you who dont know, travel hacking is basically maximizing your credit card usage to be able to go on trips for free or reduced costs using points. I’ve always travel hacked some. I haven’t paid full price for a hotel since I got my current job. But I’ve never intentionally used my credit cards to pay for a trip. So I want to share what I’ve learned to teach you how NOT to travel hack.
My first ‘real’ credit card was the Bank of America cash rewards card. I call it my first ‘real’ card because I don’t count the Maurice’s store credit card I got when I was 18. Anyway, I didn’t look into what this card could offer me before I got it. I got it because I was 20 years old, had basically no credit, wanted to start building my credit, and was already banking at Bank of America at the time.
My next card was the IHG rewards card. I signed up for this card because my coworkers told me I should, because IHG is the brand where we stay the most often. This card was pretty much my introduction into travel hacking. Every time I stay at an IHG brand hotel I accumulate hotel points. Every time I use my card to pay for that stay, I earn 10 points for every dollar I spend.
The third card I applied for was the Chase Sapphire Preferred. Everything I read about this card was about how great it was for travel hacking and it was on every top list for good general use cards. I applied for the card, was approved, and received the sign up points. I’ve had the card for a year and have only accumulated 13,000ish more points after the sign up bonus. It is overwhelmingly unimpressive.
With these cards in mind, I want to share what I’ve learned about how not to travel hack…
1. Always know what benefits your cards provide vs. what benefits you are looking for. I’ve had my Bank of America card since 2012 or 2013. Sometime along the way, they changed the rewards program where you can sign up for 3x cash back on certain categories and I had no idea. I logged into my account recently and saw I could be getting 3x cash back on gas. The only thing that goes on that card at this point is a couple of random monthly bills and definitively not my gas bill. If cash back was my goal, who knows how long I could’ve been maximizing cash back.
2. Have a plan. If you want to get into travel hacking, I HIGHLY recommend looking into The Points Guy. He makes his money teaching people how to travel hack. He talks about doing ‘the Chase Gauntlet’. It’s basically applying for the whole Chase suite of cards in order to maximize the sign up points they offer. Chase points can be redeemed through Chase on their Ultimate Rewards portal and it offers a lot of benefits to go through their portal. Maybe you don’t want to apply for every card that Chase has to offer. But you should definitely think about what you want from each card and how you can best use the points they provide before applying.
3. Do your research. I have been doing all my spending this year on my IHG credit card to accumulate hotel points. I wanted to pay for my mom’s and my Disney trip later this year in points. As of the end of June, I was up to 120,000 points, which was enough to pay for three nights at a hotel that would offer us their ‘magic extra hours’. So I used all of my points to pay for just three of our six nights at 40,000 points per night. After I got done ‘paying’ for the hotel, I logged onto the Chase portal and booked our flights. It cost almost 60,000 points to book two flights and pretty much cleared out my Chase points. After I booked my flights, the Chase portal told me I had 16% off hotels so I decided to see if that included the hotel I had just booked for Disney. It turned out, not only did it have the same hotel, it had the same hotel for only 9,000 points for night instead of 40,000 points per night. Instead of using the IHG card all year, I should’ve been using the Sapphire card and it would’ve cost me way less points.
After I was thoroughly disappointed about ‘wasting’ so many points, I started reading about the Chase Ultimate Rewards portal. Apparently a lot of the time the best way to book isn’t though the portal, but to transfer points from the portal to one of Chase’s ‘travel partners’ which includes a whole slew of airlines and hotels. You are able to transfer points from Chase’s portal to their partners on a 1 for 1 basis. I decided to check how many Southwest points it would take to book the same flight I booked through the portal for Disney and it turns out it would’ve been 10,000 points cheaper to transfer the points to Southwest instead of booking through the portal. For those of you keeping track at home, for this trip alone I could’ve saved about 76,000 points if I would’ve done a little bit of research before booking.
I mentioned that the Chase Sapphire card is one of the cards in my credit card portfolio. Apparently the reason that it is on so many best lists is because of its access to the Chase Ultimate Rewards portal. It only accumulates 1 point per dollar spent on most purchases and 2 points per dollar on travel. If you want to maximize the Sapphire cards’ benefits, it APPEARS from my research that you should also apply for one of the other Chase cards. So I recently applied for the Chase Freedom card that offers 5 points per dollar on different bonuses quarterly. You can then transfer the points you earn on the freedom card to the Ultimate Rewards portal where they are worth more.
At the end of the day, I’ve saved a lot of money using my cards they way I have been. But with a little more thought, I could’ve taken the points (and my hard earned dollars) a lot further.
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