Intro to Travel Hacking via Credit Cards


Disclaimer: There are no credit card signup affiliate links in this post. All the links go to the original places I found the offers. Also, you should start by joining the respective frequent flyer programs and make sure you have good credit before taking advantage of credit card travel hacking.

I decided to make this site after a conversation I had with my friend who asked me the best ways to accumulate frequent flyer miles and credit card points for travel. I wrote him the following email below and then compiled a list of sites, blogs, and forums I regularly visit so that he could get more in depth knowledge on his own. Then another friend asked me for the same advice, and then another. I forwarded the same email and list to all my friends that asked. Eventually I just decided to publish the list online in aggregated RSS format so that I could just refer everyone that asks to a single link. And hence, this site was born. Here is the original email below (some of the methods/offers may no longer be available, but the gist of the travel hacking I explain is still the same).

David,

I know you’re asking mostly about the best cards for travel (ie no foreign transaction fees, etc), which I’ll get to, but I’m going to bring you up to speed on how “travel hackers” travel as often as they want, often via first class on international flights and in 5-star hotels, very very cheaply.

There’s two aspects to credit card points (including frequent flyer miles) which you should consider. First is the actual bonus points you get for signing up for a specific card, and second is the type/quality of points you can earn with the cards once you have it.

Sign up bonuses

Credit card companies often give anywhere from 10K to 100K (very rarely) bonus points for signing up for a credit card. Take any major American airline flight, and they’ll force you to listen to their current bonus miles offer for their branded credit card as you approach your destination. For the standard program, any offer above 50K points/miles is worth considering.¬†Something to keep in mind, there’s often much better signup bonuses than the ones offered. For example, the mass consumer offer for the American Airlines Citi Executive Mastercard right now is 30K Miles: https://www.aa.com/i18n/AAdvantage/earnMiles/beyondTravel/creditDebit/citi-platinum.jsp?anchorLocation=baggage&title=citi. You should do a google search yourself too, just to see what you come up with. The average offer for the card is usually 30K points. That’s usually what the average consumer signs up for. BUT if you know where to look, you can find special offers for 50K miles, or the rare, 100K bonus miles! and everything in between.

FYI, that 100K bonus mile card is probably the most generous offer out there right now across the major airlines and credit card companies. So how much are 100K American Airlines miles worth? Well if you look at the awards chart, it can be 5 economy tickets from the US to Europe or 6 tickets from the US to parts of South America. That’s pretty good for just signing up for a credit card.

So what’s the caveat? Well first, the credit card companies have minimum spend requirements to earn the bonus miles, and second, some cards have annual fees. In the case of the American Airlines Citi Mastercard, to get the full 100K bonus, you need to spend $10K dollars within the first three months, and there’s also a $450 annual fee. This is where the concept of “manufactured spending” comes in, which I believe I talked to you a little about the other day.

Manufactured spending is, as is sounds, the concept of finding ways to spend money on your credit cards where you break even on your money (or pretty close) but come out way ahead when you calculate the value of points or miles earned by doing so. ¬†One of the more famous examples of manufactured spending was the exploitation of the US governments attempt to add dollar coins into circulation: http://pointsbuzz.com/travel-hacker-hall-of-fame. Travel hackers found a way to use the US government’s incentive to use dollar coins as a sort of loophole to generate free points/miles on their credit cards. Another recent one was the use of Vanilla Reload cards, a hack that was used in many variations: http://www.mybanktracker.com/news/mbtslider/credit-card-hacks/. You can imagine the possibilities with this. Unfortunately, CVS ended the purchase of Vanilla Reload cards just this month after people had exploited it to the tune of many millions of dollars in manufactured spending.

Fortunately, if you’re just a little creative, there’s still plenty of ways to manufacture spend. The concern in this blog post hints at a pretty common method ongoing right now: http://hackmytrip.com/2014/04/chase-might-drop-5x-rewards-ink-business-cards/.

This is going on way longer than I thought. Chew on it for a little bit and we can talk later today on other travel hacking tips, like how to fly first class to Europe for only 25K points, and I’ll actually make a recommendation for you for a good foreign travel card.

In the meantime, if you want to read up more on this stuff, here’s a list of the most popular travel hacking sites: http://pointsbuzz.com/

Best,

J