Travel hacking and Travel rewards credit cards is not something I am an expert in, so here is a guest post by my friend Jayson who travels the world for next to free thanks to travel hacking. I hope this posts brings value especially to the American viewership of my blog!
What is Travel Hacking?
Travel hacking is the art form of earning large quantities of travel reward points & miles that are redeemed for free flights, hotels & so much more. With travel hacking you can often get 95%-100% off the cash price of a flight. Learning the ins and outs of airline frequent flyer programs & travel reward systems can have huge payoffs. The more time I spent learning these systems, the more insane value I found. I have used travel reward points/miles to have experiences that would be impossible for me beforehand.
A few of my favorite “travel hacks” were: a $5,500 trip to London for my Mom and I (cost me $200 total), a free first class flight to Bali & a flight from Finland to Singapore that actually paid me $515 to fly. Before I fully understood the value of these systems I was very skeptical if they were worth my time or truly had value. I didn’t really believe the hype until I booked a trip to Thailand, From Denver on 3 days’ notice for free and finally saw the value first hand. Becoming a travel rewards expert has truly changed my life and given me the freedom to travel full time and fly for (nearly) free to (almost) anywhere on the planet.
What are Travel Rewards Credit Cards?
Travel rewards credit cards are cards issued by a bank with a travel based incentive to encourage new customers to sign up. Travel credit cards by far the fastest and easiest way to earn lots of airline / travel miles that can be redeemed for free travel. These are dozens of different travel reward cards available with a variety of benefits. Some of the popular perks include airline miles, hotel points, free access to airport lounges & 2x-3x points for certain spending activities such as dining, travel or online advertising.
Often a large sign up bonus is given to a customer after they meet a minimum spending requirement over the first 90 days of the account. For example, the Chase Sapphire Preserve card gives its customers a 50,000 point sign up bonus after you spend $4,000 in the first 90 days of account opening. This card lets you redeem the points: inside its own system, transfer directly to airline / hotel partners, receive cash back, transfer to gift cards and more.
The question I am asked most often is “does opening new credit cards ruin your credit”? The short answer is no, opening new credit cards does not “ruin your credit”. If you are responsible, pay off your balance in full every month and don’t open and close cards like a madman you can often increase your credit score. I have increase my score from 720 to 810 since I started travel hacking. One of my clients increased his credit score from 660-750 in 6 months.
The 3 Types of Travel Reward Credit Cards
- Flexible Travel Reward Credit Cards – IMHO these are by far the most valuable travel cards. Flexible travel cards let points: inside its own system, transfer directly to airline / hotel partners, receive cash back, transfer to gift cards and more. Each system has strengths and weaknesses and are each a little different. The most popular travel reward systems are Chase Ultimate Rewards, American Express Membership Rewards, Citi Thank You & Starwood Preferred Guest. Each system has several cards that can be used together to stack your points high.
2. Airline Specific Credit Cards-Almost every major airline has a branded credit card. The airlines cards are more restrictive than Flexible Travel Reward cards but can still have incredible value. The airline branded cards are especially valuable if you fly a specific airline frequently or live in a hub of a major airline. The airline credit cards also often have benefits such as improved boarding class, free checked bags and improved award flight availability.
The biggest mistake most people make with the airline cards is not realizing that you can redeem your points on travel for all the partner airlines of your branded credit card. For example: United Airlines is part of the Star Alliance, you can redeem United miles for flights on their 28 partner airlines such as Lufthansa, Air Canada, Tap Portugal, Turkish Airlines and more. Sometimes you can book these partner flights online but you may need to call the airline you hold points with to book partner airlines flights.
3. Fixed Value Credit Cards – Fixed value cards are very simple to understand and use. Basically you redeem your miles for any travel related purchase of your choice. You just make a travel related purchase with your card and go inside the system and have it erased. These cards often have a lower total value than Airline or Flexible cards but are very popular due to flexibility and ease of use.
Best Travel Rewards Credit Cards of 2018
Besides the perks, the most fun part about travel rewards cards is there is always some kind of promotion going on. Banks offer increased sign up bonus to increase hype, awareness and obtain new customers. The most famous travel reward card promotion was the Chase Sapphire Reserve 100k bonus about a year ago. These card promotions are always changing but when one ends, a new one usually pops up. I try my best to only sign up for cards when they are offering an increased bonus.
My favorite blogs to keep up with special promotions & new cards to & The Points Guy. Since these promotions are always changing, there is not a straightforward answer on what cards are best. Depending on the sign-up bonus at the time, the value changes greatly. That being said, there are a couple of cards that have been around for a while and always offer huge value, regardless of when you sign up for them. Here are my 5 favorites.
Chase Sapphire Preferred
This is my go to card for beginners & a favorite among the travel hacking community for years. Everyone should have this card! This flexible travel rewards card is easy to use, super flexible & has a $95 fee that is waived the first year and offers 2x miles for any dining or travel purchase. You earn 50,000 Chase Ultimate Reward points with the signup bonus for this card. Chase UR points are by far my favorite as well as the most valuable in my opinion.
Chase Business Ink
This flexible travel reward card is only available to businesses owners. Any small business owner with a Sole Proprietorship and up can qualify. Don’t be concerned if your businesses is not generating significant revenue. Chase approves many new businesses that are not generating lots of income yet. This card has a sign-up bonus of 80,000 Chase Ultimate Reward Points. Other benefits include 3x points for travel, online advertising & many other businesses expenses. This is the best business card on the market right now.
Capital One Venture / Barclays Arrival
These two fixed value cards are almost identical so I will group them together. Both cards offer 40,000 point sign up bonuses that can be redeemed for $400 in travel purchases. Both cards offer no annual fee the first year. Just make the purchase on your card and have the system erase the charge. I love to use these cards for Airbnb purchases. The only major differences in the two cards are a $59 fee for Capitol One Venture (free first year) & $89 for Barclays Arrival (free first year). The other major difference is to redeem a travel purchase on the Barclays card, the purchase must be $100 or more. Capitol One Venture does not have this $10 minimum restriction.
American Airlines Aviator
This card is very interesting. Most of the time, I would not place it on my top 5 list. Currently the sign-up bonus is 60,000 AA miles which is double the normal 30,000. The 60,000 mile bonus is unlocked after the first purchase. You can’t beat that! You basically trade the $95 annual fee for 60,000 AA miles which should be enough to get you a roundtrip ticket somewhere awesome. This card also give you priority boarding and a free checked bag.
American Airlines miles are not as strong as they used to be. The program has been devalued recently and their availability for award flights is very poor. A 60,000 mile bonus for only one purchase is too good to miss out on. The 60,000 mile bonus is only available until November 30th so get on it!
Chase Sapphire Reserve
This flexible travel rewards card is my personal favorite card and is hugely popular due to the 100,000 point sign up bonus offer when it was introduced a year ago. Currently it’s only offering 50,000 Chase Ultimate Reward point bonus. There are lots of other great perks such as free access to Priority Pass Lounges, Free TSA Pre-Check & 3x points on travel or dining related expenses. This card does have a $450 annual fee but gives you a $300 travel credit so the annual fee is really $150. I believe $150 annual fee is absolutely worth the price. I hate to have 3/5 on my list Chase credit cards but they really are the best cards around right now.
I hope these travel hacking tips helped. If you want to learn more about travel hacking follow me on your favorite median. Cheers!
- Nomad Travel Hacker (Website)