I got the travel bug early. Fascinated by other cultures and places, as a teenager I would sit in bookstores and flip through guidebooks for China, Italy, Kenya, Peru….I just wanted to go SOMEWHERE. But I had never left the United States. When I got to college, I made it a priority to travel internationally as much as I could, and it was an important part of my life. Thailand, Spain, China, France, Ireland, Germany….I spent as much time abroad as I could. But then, when I was 30, I had my daughter, and my mindset about travel shifted from one of understanding how to easily and cheaply go just about anywhere to one of feeling limited by the costs and responsibilities of parenthood. Because you can’t travel once you have a kid, right? Right?
It took me until my early forties to learn that the key to traveling the world with my daughter and husband was actually sitting in my wallet the whole time – the points and miles accrued by the credit cards I use for my regular everyday spending. When I learned how to start travel hacking, the sense of absolute possibility that I felt when I was younger came flooding back. Travel wasn’t something that had to feel like a major luxury – it’s now something that I can make a regular part of my life because it fits into my budget, and the money I spend on my regular expenses is consistently building a currency to make new adventures possible. Learning how to start travel hacking opened up a literal world of possibility for me.
If you’ve made it here, then you’ve probably heard about travel hacking as a way of seeing the world for far less money than usual. You probably have a lot of questions – like how to do it, whether it’s legitimate, and how it might impact your credit score. I’ll answer all those questions and more, and show you how to start travel hacking with credit card points and miles.
Step 1: Evaluate your finances
Step 2: Understand the 5/24 rule
Step 3: Make a travel plan
Step 4: Learn what points you need
Step 5: Find the best card for you
Step 6: Apply for the card
Step 7: Meet the minimum spend
Step 8: Book travel
Step 1: Evaluate your finances
Learn what travel hacking is & what it isn’t
Travel hacking is the practice of using credit card sign-up bonuses to maximize opportunities for travel, or to upgrade the level at which you usually travel (for example, flying first class instead of economy).
It should NOT be a debt trap, or an excuse to spend ANY money that wouldn’t already have spent.
Figure out your credit score
If you don’t already know your credit score, it’s easy to find at www.creditkarma.com.
Most banks are looking for you to have at least a 700. If you aren’t there yet, that’s okay! Lots of banks and financial news sites have great info on boosting your score.
Keep in mind:
- You actually have multiple credit scores, depending on the bank and the credit rating agency. You’re just looking for a range.
- Your credit score fluctuates daily. Again, you’re looking for a general range.
Understand how travel hacking impacts your credit
The #1 question people who learning how to start travel hacking ask is “won’t this hurt my credit score?” And I’m so glad they ask! Your credit score is important and you should protect it. Thankfully, the answer is no. If you follow best practices and pay your balance in full, your score may even go up. Mine did!
Make sure that you can reasonably meet the minimum spend for any card you apply for
Meeting the minimum spend for a card in the time allotted is absolutely crucial – miss the minimum by even $1, and you can kiss that signup bonus goodbye. So when you’re choosing a card, decide if the amount is something you can meet without spending more than you would normally.
PAY YOUR BALANCE IN FULL EVERY MONTH
This is non-negotiable! We are not paying interest or late fees, folks. Not on my watch. Interest and fees will erase any benefit that the signup bonus would bring you. If you cannot commit to paying your entire statement balance in full, on time, every single month, then you should not start travel hacking.
Step 2: Understand the 5/24 rule
What does “5/24” mean?
When you’re learning how to start travel hacking, you’ll see a lot of references to “5/24.” This doesn’t mean May 24 – it means having 5 personal (and some business) cards opened in 24 months.
Most banks do not use this as a metric towards approving or denying you, but Chase will automatically deny you if you have opened 5 cards in the last 24 months – otherwise known as hitting 5/24.
Why is 5/24 important?
Knowing how many cards you’ve opened in the last 24 months is important because the blue bank’s cards can be some of the most valuable in the points and miles arena. If you hit 5/24, they will deny your applications for both personal and business cards.
So, is being at 5/24 bad?
Not necessarily. I’m at 5/24 as I write this! All it means is that I have to wait until my “under 5/24 date” to apply for any more Chase cards. But when you’re just starting out, knowing that this rule exists can help you to craft your card strategy.
Should you try to stay under 5/24 at all times?
No, that’s not necessary. But try to make most or all of your first five cards of travel hacking be from Chase. Once you have hit 5/24, you can focus your card strategy on other banks’ cards, like Capital One, Citi, and American Express.
Do all cards count towards 5/24?
No! You have many options for cards that won’t show on your credit report and count towards 5/24. Mostly these are business cards – including, ironically, cards issued by Chase. You may be eligible to apply for business cards – I will cover that topic in a future post.
Business cards issued by Capital One, Discover and TD Bank DO count towards this number. Home loans, student loans, car loans and personal loans don’t impact 5/24.
Do rejections count towards 5/24?
No, they don’t. Most card applications will result in a hard pull on your credit report, which is something to keep in mind, though, and is why I recommend spacing your applications out by 60-90 days in order to prevent lots of pulls on your credit report at one time. But they won’t impact your 5/24 number.
How do I keep track of how many cards I have opened in the last 24 months?
I recommend using the Travel Freely app. It will keep track of how many cards you’ve opened and, if you reach 5/24, the date at which you will be under it again. I’m not affiliated with them, just a big fan of the app!
Step 3: Make a travel plan
Think about where you’ve always wanted to go
This is the fun part! It’s time to decide where you want to go for your travel hacked vacation.
If money was no object, where would you travel?
Is there somewhere new that you want to go? Or is there a place that you’ve been dreaming of getting back to?
Who will be going with you?
Is this a solo trip? A honeymoon? A family vacation? Determine how many people you will need to find airfare and hotel stays for.
What time of year would you like to travel?
Do you want to spend Christmas in Germany? Cherry blossom season in Tokyo? See the Northern Lights in Iceland?
Try to plan for a trip that is at least 12 months from now. Earning points takes time – unless you are looking for true last minute deals, travel hacking rewards patience and advance planning.
What type of trip will this be?
Do you want first class seats? (It’s possible!) Would you rather stretch your points farther and fly economy? Are you looking for an all-inclusive resort, or more of a place to drop your stuff while you’re out and about?
Step 4: Learn what points you need
Now you can develop a points strategy
Now that you’ve made a travel plan, you can start to put together a points strategy.
The first part of this strategy will include:
- What airlines and hotels you want to use
- What points will transfer to these airlines and hotels
Start with transferrable points
Transferrable points are points earned through cards from Capital One, American Express, Citi and Chase. These points can be transferred to a number of travel partners, depending on the card issuer. Points and miles earned directly through companies like Southwest or Hilton cannot transfer and must be used for bookings with that company only. Both are very valuable, but when you’re starting out, start by earning transferrable points.
Find routes to your destination
First, search Google Flights for routes from your home airport to your destination. Make note of which airlines fly this route.
When you’re more experienced, you can work with advanced strategies like working within alliances and booking positioning flights. For right now, though, let’s keep it simple and focus on one or two airlines!
Learn what points transfer to your target airline
Next, find out what points will transfer to that airline. Simply google “transfer points to [airline name].”
For example, when we google “transfer points to Qantas Airlines” we learn that you can transfer points from AmEx, Citi, and Capital One
So, if you were planning a trip to Australia on Qantas Airlines, these would be the points you want to focus on earning!
Step 5: Find the best card for you
To find the right card, you need to compare
Keep in mind, though, that it’s almost universally acknowledged that Chase has the best starter cards due to their 5/24 rule that we discussed in Step 2.
Points & miles cards fall broadly into two categories
Transferrable points cards – cards that earn the bank’s currency, which can then be transferred to airlines or hotels Non-transferrable points cards – cards that earn points or miles with a specific company
For this comparison, let’s focus on cards that earn transferrable points, since that’s what you’ll want to start with
When comparing offers, consider the following things:
How much is the minimum spend and how long do you have to reach it? Can you reach it without spending any more than you typically would?
How many points/miles are being offered? How does this compare with the number of points/miles you need for your trip?
What benefits does the card offer beyond the sign-up bonus? Will you get lounge access, Global Entry fees covered, free hotel nights, etc?
What is the annual fee? Do the card’s benefits offer greater value than you would spend for this fee?
“Hey wait, what about the interest rate? Shouldn’t we compare that?”
Honestly? No.
If you’re planning to pay interest, you shouldn’t be doing this.
Because I pay my bills in full, on time, every month, the amount of interest charged by a card is irrelevant to me.
Don’t get paralyzed trying to find the perfect card
Ultimately, almost any sign-up bonus will bring you some kind of value. Don’t let the large number of available offers overwhelm you, and don’t get bogged down in worrying about finding the absolute perfect card. As your card strategy grows, you’ll come to find that cards complement each other in different ways, and no one card can give you everything you’re looking for.
Step 6: Apply for the card
Make sure to keep track of the most important info
Once you’ve applied and been accepted, write down or screenshot:
- The date you applied
- The date you were approved (if you’re not approved automatically)
- The minimum spend that you have to meet
- The date by which you need to meet the minimum spend
Don’t panic if you aren’t automatically approved
Ideally, when you apply, you’ll receive a quick “Congratulations! Your application has been approved” message. But that’s not always what happens. Other things that might happen:
Your application could “go pending”
This is when your application is not denied immediately, but neither is it approved automatically. Typically this means that your application is going to further review and/or the bank needs more information. You’ll see differing opinions online about what to do in this case. Some folks advise calling the bank immediately; personally, I recommend waiting at least a few days. Sometimes doing nothing is the best thing.
Your application could be denied
Everyone in the travel hacking game has been denied when applying for a credit card. I’ve been denied twice in the last year! It’s nothing to be ashamed of, and can be due to a myriad of factors.
You have two options for what to do if you’re denied:
Call the bank and ask for a reconsideration.
If you genuinely think that you should have been approved, and don’t have extenuating factors like a lot of recent inquiries on your credit report, and you’re not at 5/24 if you’re applying for a Chase card, it doesn’t hurt to ask for them to take another look.
Accept the denial and move on.
The bank should send you a letter in a few days explaining the reason for the denial. Most of the time I’ve found that there are reasonable explanations for each denial, based on the bank’s written or unwritten rules (Citi, for example, is very sensitive to how many inquiries you’ve had on your report in recent months).
If your application is denied, I recommend waiting a couple of weeks before submitting another application, so that you don’t have back-to-back inquiries in quick succession. But you likely don’t need to wait longer than that for most banks’ cards.
Take a few important steps right away
Once you’re approved, you should take a few steps:
Move all spending to the new card
In order to meet your minimum spend and get the most value out of each dollar, you’ll want to move all of your regular spending onto the card.
Once you’ve met the minimum spend, you can choose to use cards with points multipliers in various categories (for example, after I’ve met a minimum spend, I use the Chase Sapphire Preferred for dining, since I get 3x points in that category)
Put your card info into an app like TravelFreely or MaxRewards
Being organized about your cards is very important. These apps will help you to track what cards you have, when your annual fee is due and when you should apply for your next card.
Add the card to Apple Pay or other mobile payment system
Instead of adding my spouse as an authorized user (which would take up one of his 5/24 spots), both he and I add the card to our Apple Pay app on our phones. That way, we can both apply charges to the minimum spend, no matter who has the actual physical card.
Set up auto pay
To ensure that you pay the full statement balance each month, set up auto pay. That way, you won’t have to worry about forgetting to make the payment and being charged interest or late fees.
Step 7: Meet the minimum spend
To get a credit card’s sign-up bonus, you need to meet minimum spend
Minimum spend is the amount of money the bank has specified that you need to spend in a certain period of time in order to qualify for the sign-up bonus
How to meet minimum spend
There are many ways to hit this minimum:
- Any planned upcoming large purchases
- For example, we paid for my daughter’s braces on two cards and hit minimum spend on both
- Move all regular bills to the card
- Put everyday spending – such as groceries, gas, etc – onto the card
- Even if there are multipliers for these items on cards you already have, it’s usually a better deal to ensure you hit the minimum on a new card first
- Put everyday spending – such as groceries, gas, etc – onto the card
How to track your spending
Some banks, such as Capital One, include a tracking bar when you log into your account.
Others, like American Express, leave the tracking up to you.
I use the MaxRewards app to track spending, since it can show your progress regardless of what card you have.
Regardless of how you do it, keep in mind that it is YOUR responsbility to track your spending and ensure you hit the minimum, not the bank’s. Keep track of your spending AND the date date.
What if I don’t meet minimum spend?
You don’t get the sign-up bonus. Simple as that.
Not getting the bonus is a major loss of value, so be sure that you can meet the minimum before you apply for the card!
And remember – don’t spend more than you normally would in order to get a sign-up bonus. Going into debt will fully negate any value you get from the points you’ll earn.
Step 8: Book your travel
Transfer your points
Once you’ve earned your sign-up bonus and the points you’ll accrue from the charges you made to earn it, you’ll want to transfer those points to the airline and hotels for your trip. The process is going to be a little different for every bank, but in general, you will need to:
- Create a loyalty account with the airline and/or hotel
- Log into your card’s website or app
- Find the page where you can redeem points in various ways
- Select the option to transfer or convert rewards
- Find your airline or hotel loyalty program
- Decide how many points to transfer
Usually the transfer is immediate or within a few hours. Sometimes, though, it can take several days. Both are normal.
Remember: Points transfers are final
Remember – once you transfer points to a transfer partner, you CAN NOT transfer them back. They’re in that program for good. So be absolutely sure you’re ready to book before you transfer them, and only transfer the amount you need for that booking.
Bon Voyage!
I am so excited for you to learn how to start travel hacking, and to learn how amazing it is to travel for almost-free. It’s changed my life and I bet it will change yours. Be sure to comment below with your travel hacking stories!
Need more help?
If you’re still feeling overwhelmed or confused, I’m here to help! I offer one-on-one consultations, as well as full service points and miles packages to help you make your travel goal a reality.
Leave a Reply