Credit Cards are the Travel Hacker’s bread and butter. Without them, it would take a lot of flying and a lot of hotel stays to save enough miles for free flights and the cost would far out way the benefit. More than the average Smoe can afford.
Singing up for a points-earning credit card should be the first thing on your Travel Hacking 101 list.
WHY CREDIT CARDS ARE IMPORTANT
Everyone should have at least one credit card. As long as you are financially responsible enough to not miss any payments and pay your monthly statements, having a credit card will help you build credit. In fact having multiple credit cards will help your credit score even more, because it shows that you are good at managing your money and paying off your debt on time.
Having good credit is hugely important in the US, and owning a credit card is the first step. Having a credit card doesn’t mean that you should now spend money you don’t have, not at all. You just use it instead of your debit card to pay for the things you were already going to buy, only now you are earning points and miles for your effort.
There are multiple ways for earning points with your credit card.
HOW MANY POINTS CAN YOU EARN?
It depends how many credit cards you have and how crafty you are! I have right now, 1 million frequent flier points. All from credit cards. Depending on how I use them, I can travel in first class, stay in amazing hotels, book holidays for friends and family, all for free. Using conservative calculations, my 1 million points are worth at least $10,000 of travel.
Half of travel hacking is all about earning miles and points but the second part which most people don’t spend too much time researching is how to use them for maximum value. For me personally, I will hopefully get at least $20,000 worth of travel from my 1 million points.
Unfortunately, you can’t use points for everything and a lot of points redemptions still come with fees and taxes, but despite this, my overall travel costs are significantly lower. Plus I use my credit cards when paying for any other incidental costs, thus earning more points to use towards my next trip.
There are other ways to earn mile and points but none will earn you anywhere near as much as signing up for the right credit card bonuses will.
HOW TO EARN POINTS WITH CREDIT CARDS
There are multiple ways for earning points with a credit card.
SIGN UP BONUSES
Most cards will have some sort of sign up bonus whereby you will receive a lump sum of points for spending a certain amount on the card within a certain period of time, usually the first 3 months. Something like 50,000 bonus points if you spend $3,000 in 3 months. If you don’t think you will spend enough to get the bonus, this is where manufactured spend comes in.
Most Credit Card will give you 1 point for every dollar you spend. Some credit cards will give you more, and some give you more for certain categories, for example, 3 points for every dollar spent on travel.
Some cards will give you extra points for just adding friends as authorized users to your card. Sometimes the bonus points can be substantial. You can add multiple friends with the sole purpose of getting the extra points and with no intention of them actually using the card.
The credit card companies want you to use the card and will, therefore, offer you other bonus from time to time if you meet certain goals. Some will even give you an extra 5,000 points just as an annual birthday present!
IS THIS LEGAL?
No, I started an entire blog based on an illegal hobby.
OF COURSE IT’S FREAKING LEGAL.
The credit card companies want your business, hence why they offer such great bonuses. The only risk is to your credit score and financial well being if you are careless. As long as you are not addicted to spending money you don’t have then you are fine! Remember the main point is to use the credit card to only spend money as you normally would. The only difference being, some cards will earn you more points on certain things than others, so you have to pick your cards wisely; Use once card for restaurants that earn 3x on restaurants and another for gas that earns 2x on gas for example.
Cheeky Tip:Depsite many thinking the opposite, more credit cards can actually increase your credit score. As long as don’t miss any payments or have high revolving debt, you are showing the credit card companies that you are good managing your money, and therefore a good candidate to lend to in the future. Using your cards responsible will help you build good credit, making it easier for you to take out loans, lease a car or qualify for a mortgage down the line. Be warned – misusing your cards or being careless with your payments can lead to bad credit and cause you major headaches in the future.
READY TO GET STARTED?
If you are reading this but you’re thinking “sounds great, but I don’t want to wait months to be able to eventually get a free flight, I want to fly next month” – I hear ya!
Subscribe to The Cheeky Traveler and receive a Guide on how to expedite the whole process. Start from NOTHING, and be flying FOR FREE next month. Ben Voyage!