Tag Archives: Free Travel

Travel Hacking: Round Two

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.

This post might contain affiliate links.

Please be sure to read the Disclaimer Page.

 

Travel Hacking: Round One

Until recently, I have never tried travel hacking.  As a member of the financial independence community, I have not looked favorably at credit cards.  I saw them as a way for undisciplined people to spend more than they earn.  In my opinion, I saw them as tools that banks use to hack high fees and interest payments out of people who have fallen victim to materialism.

My view on credit was to only borrow when it was a must and to pay it back as quickly as possible.  Since I started working full-time, I only used credit when I needed it.  However, I knew that having a high credit score was important.

My wife and I both have high credit scores but have not borrowed much.  I once had a car loan that I paid off in my early 20’s.  When I went to college, I paid cash for my first two years and took out student loans for my Junior and Senior years.  My wife and I also took out a home equity loan to remodel our house.  That is currently our only debt.

For years, my wife and I only had one credit card.  We used it for travel, shopping on Amazon, and for other purchases when a credit card was more convenient than cash.  We have always just used a basic bank card that paid 1% cash back.

I did not know if 1% was good or not.  I was more interested in using the card when it was required and just paid off the balance every month.  At the end of the year, I would get $500 back and just use the rewards money for holiday bills.

The focus of my personal finance management and writing has been saving and investing.  My approach has been to focus on career growth, saving as much as possible, and capture average market returns by investing in index funds.  Hacking has not been on my radar.

Over the past year, I have started reading more and more blogs about people who are taking two or more vacations per year for free.  Since some of the most trusted bloggers promote it, I decided to read more about it.  It was not until I attended a meet-up in New York City where a group of bloggers from Rockstar Finance got together.  At this event, I got turned on to travel hacking and decided to give it a shot.

The idea of taking a vacation or two per year for free excited me.  We travel anyway, so why not enjoy our trips for free.  I started to do some research.  I also took the Travel Miles 101 online course.  Travel Miles 101 is a comprehensive course that explains all that a person needs to start travel hacking.  I recommend it to anyone who wants to learn more about travel hacking.

After taking the travel miles 101 class and reading many other blogs, the consensus card to start with is the Chase Sapphire Preferred credit card.  The Chase Sapphire Preferred card has a $0 introductory annual fee for the first year.  The annual fee after that is $95 per year, but as part of the hack, you set it up to never pay that fee.

So, what do you get with the Chase Sapphire Preferred credit card?  If you spend $4,000 in 3 months, you earn 50,000 bonus points.  Those 50,000 bonus points add up to some nice rewards. The redemption value is worth $625 in airfare, $625 towards hotels, or $300 in cash.

There are other nice benefits With the Chase Sapphire Preferred credit card.  A cardholder will receive 2X points on travel purchases.  When you dine out, a cardholder receives 2X points on restaurant purchases worldwide.  Every other purchase equals 1 point per $1 spent.

Based on all of the suggestions, I opened a Chase Sapphire Preferred credit card.   In order to hit the target of $4,000 to earn the points, I set up all of our monthly household bills to be charged to this card. Since it was November, it did not take long to hit the $4,000 with all of the extra holiday spending.

After I reached the $4,000, my wife opened a Chase Sapphire Preferred credit card.  We followed the same plan and used the card for all of our bills and spending.  It took us less than two months for us to hit $4,000 on her card.

Now for the fun stuff.  It was time to redeem our points.  We decided that we wanted to visit Dublin, Ireland this summer.  To redeem the points, there is a portal to access the travel section on the Chase Dashboard.  It is as easy as booking a flight on any other travel website.

We decided to fly out of Philadelphia (PHL) and wanted a non-stop flight.  Based on the value of our points, these tickets were going to only cost us about $150 in out of pocket expenses.  Before we booked our flight, I decided to check if there was a cheaper flight out of the Newark Airport (EWR).  I typed in our travel dates and a round-trip ticket from Newark to Dublin on Air Lingus was only $605 per ticket.  We booked our flights and had points to spare.  It was that easy.

I do not know if travel hacking is for everyone.  If you are not good at paying your bills every month, travel hacking might not be for you.  If you end up with a balance and have to pay the high interest, the credit card company is actually hacking you.  You also need to have the required spend to earn the points.  If you do not spend enough to qualify, you should not just spend money you otherwise would not spend to just earn points.

Does travel hacking hurt your credit score?  I have only opened two cards, so I do not have any personal evidence to share with you.  Based on many other blogs, there is minimal change and most credit scores increase over time.  The most important thing is paying your balance every month.

If you are responsible for paying your monthly bills and enjoy traveling, you should look into travel hacking.  Travel hacking also requires a person to be structured and to know when to close a card before the annual fees will be charged.  There are many great travel websites and points tracking tools like awards wallet to make the process easier.

I hope you found this post useful.  Moving forward, I will share our experience with every new card we open and hack.  Please keep your eye out for round two in the next few months.

This post might contain affiliate links.

Please be sure to read the Disclaimer page.