Using Your Credit Cards & Other Methods to Travel Hack Responsibly and Safely
Travel hacking may be a good option if you’re looking to take a vacation without spending much money. Some people have even used “hacking” to finance their vacations around the world. The reality is if you aren’t careful, your trip could take a wrong turn quickly.
Travel hacking does not involve hacking into computers or data servers. In its simplest form, it means making the most of rewards that credit cards, airlines and hotels have to offer. The end goal in all cases remains the same — saving money.
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Best Ways to Start Travel Hacking
Finding good deals is one part of travel hacking, but it’s not everything. It’s also about using certain programs to make your journey easier and more lucrative. To start, you should look closely at credit card, airline and hotel rewards which can help you score easy upgrades, travel points and bonuses.
Credit cards are one of the best ways to earn perks. Between sweet welcome offers and rewards points based on your spending, you can easily earn hundreds of thousands of travel rewards. Several cards can make your travels more affordable by also offering discounts for commonly purchased items like food and gas. Below are a few ways to make the most out of your cards.
Apply for the right card
Select a travel credit card that you can earn bonus points upon signing up. One way to earn points is to collect them through regular or category-based spending. For instance, you may find cards that let you earn up to three times the reward points when you spend on specific categories, such as getting gas for your vehicle or choosing to fly with a certain airline.
Meet spending criteria to meet the welcome bonus
Meeting the card’s spending criteria can help you get bonus points. To reach the limit, use the card to make big-ticket purchases. Be careful about overspending. If you find yourself in debt, you can still work your way out of debt.
Redeem your points to pay for airline travel, flight upgrades or accommodation. Be sure to take advantage of promotional offers that can help you rack up bonus points and benefits such as airport lounge access, priority boarding and travel insurance.
We ranked the best travel credit cards you can get this 2022. Capital One Venture Rewards Credit Card X Rewards offers up to 10X miles with great travel benefits such as access to Capital One and Priority Pass airport lounges and complimentary Hertz President’s Circle status. If you don't mind paying the $395 annual fee, you will surely get the most out of this card as this comes with no foreign transaction fees.
Another great travel rewards card is the Chase Sapphire Preferred Card. This card lets you earn 3x points on eligible dining, 5x on travel thru Chase Ultimate Rewards and 2x on other travel purchases and 1x on all other purchases. It charges no foreign transaction fees and only comes with a $95 annual fee.
Unless you’re taking a road trip, airlines are an inevitable part of the travel process. They’re also one of the most pricey. Travel hack your way through the airline sector to eliminate the hefty expense of airline tickets by doing the following:
Sign up for airline-branded credit cards or non-co-branded cards, such as the Chase Sapphire Preferred Card or Reserve credit card or Amex cards, or book your flight tickets directly through an airline's website after signing up for a frequent flier program. You stand to earn bonus miles just by registering.
Use an airfare aggregator
You can use popular aggregators like Google Flights or use others like Skyscanner, Kayak and Expedia. These less popular sites run a vast number of searches to find the absolute best deals on national and international flights — and usually offer discounts if you book a car and hotel stay at the same time.
Set flight notifications
Most leading flight aggregators have price or fare alert tools. Use notifications to stay aware of price drops on your desired routes. Note that using a private browser is also not a proven way to save money. In some cases, logging into your account might actually give you access to better deals.
Being flexible can make travel more affordable. Look for smaller local carriers, book your tickets ahead of time and reserve your own flights unless you have a special circumstance that requires consulting a travel agent.
We reviewed the best airlines and miles credit cards to help you rack up on miles.
If you are looking for a basic miles-earning card with a few significant travel perks, consider the United Explorer Card credit card. Cardholders enjoy priority boarding and a free first checked bag. This card also offers an appealing intro offer with a $0 annual fee for the first year.
For business travelers frequently flying with Southwest Airlines, Southwest® Rapid Rewards® Performance Business Credit Card is a great credit card to have. It offers 1-3 points per dollar spent, 3X rewards rate on air travel, and comes with a welcome offer, anniversary bonus, and basic travel insurance. It charges no foreign transaction fees but does come with a $199 annual fee.
A number of hotels have co-branded credit cards or function as travel partners with existing rewards programs. Often, rewards points can help you score a suite or land a reservation at a moment’s notice. Here are three tips when using your hotel cards.
Before you get a hotel-branded credit cards, look into its annual fees. You find some with low fees, but some may have higher fees that you may be comfortable paying for. If that is the case, determine if you might be able to offset the additional cost by using a card’s rewards and benefits.
Identify hotels that fall under a single umbrella
For example, some of Hilton’s many brands include Waldorf Astoria, LXR, Conrad, Canopy and DoubleTree. The Hilton Honors rewards program covers more than 6,500 properties spread across 199 countries and territories. Knowing what’s included can help you get an idea of what your possibilities are.
Some benefits include the ability to earn extra points for travel-related spending, bonus points for signing up, complimentary upgrades on membership status, airline credit to cover for incidentals, 24/7 travel assistance services and round-the-clock access to concierge services. Check out what’s offered before you commit.
We reviewed the best hotel credit cards to help you earn more points and maximize your rewards. For example, Chase has a great credit card for you whether you are a Marriott or Hyatt loyalist. Marriott Bonvoy Boundless® Credit Card offers up to 17x points when you spend at participating Marriott properties. All other purchases come with 2x points. You get Silver Elite Status automatically, and you receive 15 Elite Night credits each year.
World of Hyatt Credit Card, on the other hand, offers up to 2 points per $1 on everyday spending, let you earn up to 60,000 rewards points* on the first six months, and gives you a free night on your card anniversary.
The Pitfalls of Travel Hacking
Despite the benefits that travel hacking has to offer, it comes with risks as well. For instance, you might end up paying more in interest than the value of the points you earn if you maintain revolving balances on your credit card accounts. In general, it’s best to err on the side of caution.
If you stay informed, you’ll be able to avoid many of the most common risks associated with travel hacking, including increased debt, account closures and credit hits. Below are a few issues to take into account.
1. Increased Debt
Some people get carried away in the euphoria of earning bonus reward points and end up spending more money than they normally would. No deal is worth the trouble if it causes you to accrue large amounts of credit card debt.
- Pay balances in full: Aim to make purchases that you can pay off in full before the next billing cycle. The best way to avoid accumulating debt and paying interest is to also pay on time.
- Look for cards that offer low APRs: If you plan to keep revolving balances in your credit card accounts, having a low APR (annual percentage rate) can keep your expenses down.
- Check your options: If you have outstanding balances on cards that charge high interest, consider looking at what balance transfer cards have to offer.
2. Account Closures
Keep in mind that some credit card companies have an idea that people may be travel hacking. If an issuer notices a cardholder has a pattern of using a credit card just to earn and redeem points, the credit card company might decide to shut down an account.
- Check the terms: Some banks enforce rules that limit the number of cards someone can apply for within a two-year period. When opening a card, look online to see how many cards you are allowed to apply for. With American Express, you can be approved for two products in a 90-day period — the 2/90 rule. For Chase, the rule is 5/24, which refers to the company denying you a Chase credit card if you open five or more cards within a 24-month period.
- Track your accounts: Keeping tabs on your cards and paying your bills on time can help you avoid account closures. If you’re able to set automatic payments on a monthly basis, you’ll have a better chance of staying organized.
- Consider downgrading or locking your card: You can consider downgrading your card to one with a lower annual fee. Some cards have no annual fee that you can hold on to for as long as you would like. You may also consider locking your card to prevent yourself or anyone from using it.
3. Credit Hits
Making repeated credit inquiries can have a negative impact on your credit score. You also need to account for the impact that canceling a card might have on your debt to credit or credit utilization ratio. This essentially represents the total amount you owe in comparison to the total credit you have available, and it should ideally remain below 30%. Stick to responsible spending habits to keep your credit score on track.
Tips for Safe and Responsible Travel Hacking
As much fun as it is to get a good deal, here are some additional tips to keep in mind when it comes to travel hacking safely and responsibly.
- Do your research. Determine how much you might end up spending on accommodation, food, sightseeing and shopping in advance. Having a general understanding of your budget can help you stay within bounds.
- Use non-credit card, airline and hotel-related travel hacks. Look for additional ways to save, such as minimizing travel expenses by traveling light and looking for freebies, travel passes and affordable accommodation. Other hacks include staying with people you know, finding free events and forming mutually beneficial partnerships with other travelers and people you trust.
Understanding the Rules
Travel hacking by using credit cards, airline and hotel reward programs is not only legal — it’s a key part of the travel industry. As long as you abide by the fine print, you’re not doing anything out of the ordinary. Credit card issuers and airlines know how travel hacking tricks work and craft their promotions accordingly. Just be sure to understand the rules so you can get them to work in your favor.
Expert Advice on Travel Hacking
MoneyGeek spoke to various experts to gain insight on the best ways to travel hack.
- What advice would you give to people with little to no financial knowledge if they want to start travel hacking?
- What would an average consumer need in order to have enough spending power to benefit through rewards programs? Are there certain rewards programs they should focus on more so than others?
Travel Hacking Coach and Founder of Geobreeze
Associate Professor at The Collins College of Hospitality Management, California State Polytechnic University Pomona
Founder & CEO at Odynn
Resources for Travel Hacking
From airfare aggregators to tools that can help you keep track of multiple reward programs, many resources can help you start travel hacking.
- AwardWallet: This website can help you keep a track of all your hotel and frequent flyer rewards. It works by automatically logging into a user's loyalty accounts on their behalf to retrieve miles and points.
- Skiplagged: A relatively new kid on the block, this airfare aggregator for cheap flights shows hidden-city ticketing trips, in addition to routine deals offered by sites like Expedia, KAYAK and Travelocity.
- Momondo: Momondo functions as an online travel agency and can help you plan your trip. It searches across hundreds of travel sites, from major booking sites to individual companies, to show you the best prices.
- Skyscanner: Skyscanner is a flight aggregator that continues to hold its own by consistently offering the lowest fares across various sectors. It also provides helpful fare alerts.
About the Author
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