Travel hacking is a great way to travel for free. Travel Hacking is the practice of opening premium rewards credit cards to capture the generous initial bonus points that these credit cards offer to new cardholders. The hack is based on getting the bonus points, closing the card before the annual fee is due, and never paying interest or carrying a monthly balance.
I first learned about travel hacking from reading The Millionaire Educator. It sounded interesting. It was not until I attended a Rockstar Finance Meet-Up in New York City that I really got turned on to this practice of traveling for free.
In my post Travel Hacking: Round One, I wrote about my first experience with Travel Hacking. The first card that my wife and I opened was the Chase Sapphire Preferred Card. We used the bonus points from this card to buy two round-trip tickets from Newark, NJ to Dublin, Ireland.
As the result of my first experience, I have decided that travel hacking will be a major part of my financial plan. My wife and I take at least two vacations per year. Even though I am frugal, we still have the monthly household spending to earn enough points to pay for two trips per year.
The second card that I opened was the Chase Preferred Ink Business Card. Unlike the Chase Sapphire, the Chase Preferred Ink Business Card is a business card. In order to qualify, having a small business like a blog or an Etsy store would qualify. For sole proprietors who do not have a tax id, they could use their Social Security number when signing up for business credit cards.
Another benefit that the Chase Preferred Ink Business Card offers is that it does not count against the Chase 5/24 rule that Chase has for opening new cards. Chase only allows individuals to open 5 cards in a 24 month period from any issuing bank, you will not be approved for new Chase credit card. That also applies for anyone who is an authorized user. Since it is a business card, it is not counted as being part of the 5/24 rule.
The Chase Preferred Ink Business card offers a very rich benefits program. After the cardholder spends $5,000 in 3 months, they receive 80,000 bonus points. When you redeem those points through Chase Ultimate Rewards, 80,000 points are equal to about $1,000 towards travel.
When you open the Chase Preferred Ink Business Card, there is a $95 annual fee. Unlike the Chase Sapphire Preferred card, that fee is not waved for the first year. Based on the value of those 80,000 travel points, it is easy to justify the $95 for one year.
On additional spend, cardholders earn 3 points for every $1 in spending. The 3 points for every $1 in money spent is good for up to the first $150,000 charged. After that, cardholders earn 1 point for every $1 in spending.
My wife and I used this card for all of our monthly expenses. We try to put all of our monthly reoccurring bills on the card. We also use it when we go out to eat at a restaurant or fill up our car at the gas station. It took us two months to reach the $5,000 in spend to equal the 80,000 points.
So, how did we use these points? My wife’s birthday is in December. She does not know it, but I booked a Western Caribbean Cruise. While going on a cruise is exciting by itself, this cruise departs on December 23rd. What makes that exciting is that winter is in full swing in Pennsylvania at that point, so we will even appreciate the cruise more.
I wish that I was able to report that I was able to book the cruise for free. Unfortunately, that was not the case. Hopefully, I will be able to share a post about taking a free cruise with you in the future. I have not reached that level of travel hacking success yet.
What I did apply the points towards was our flight. I have never booked a flight from Pennsylvania to Florida in December. When I went to book this trip, I was shocked to find out how inflated the prices are this time of year. After giving it a little bit of thought, it makes sense due to the holiday traffic and snowbirds who are flying south for winter.
The normal cost for a ticket from the Scranton International Airport to Tampa is around $300. This flight cost $625 per person. Our flight to Ireland was less expensive.
The total amount of points that were required to cover our two tickets were 112,000 in Chase Points. At this point, I had 88,000 in chase points from the Chase Preferred Ink Business Card. My wife and I also had 30,000 in points from our spending on the Chase Sapphire Preferred Card. By combining the points from the two cards we were able to cover the airfare.
With the remainder of our points, we booked our hotel. The cruise departs on Sunday, December 23. We are flying down the day before. I was surprised, but we were able to pay for one night at a 3-star hotel for only 6,000 points. That was the only value that I have found so far on this trip.
Even though the flight was expensive, it ended up being free for us since we took advantage of our points from the Chase Preferred Ink Business Card. Otherwise, we would have had to shell out over $1,200 for a 3-hour flight from Pennsylvania to Tampa, Florida. It might seem expensive, but I am sure that I will be happy to be cruising the Western Caribbean instead of dealing with at best a wintery mix at home in Pennsylvania.
I am excited about the money that I will be saving on travel as the result of travel hacking. Even though it sounds fun, be warned that travel hacking is not for everyone. Travel hacking is only for those who are ridged and hyper-focused when it comes to managing their personal finances.
If you struggle with paying off your credit card bills every month, travel hacking is not for you. If you do not have enough in normal monthly spend, travel hacking is not for you. If you have to try to generate artificial spend to try to earn points, travel hacking is not for you.
Please keep your eye out for my next post in this series on travel hacking. The next post will be about the Chase Southwest Rapid Rewards Premier Business Card. I look forward to sharing about how I am getting free flights and to share with you about where we are planning on visiting next.
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