Those cards give you points for signing up and spending money you already spend. And most of the time, those airline credit cards not only give you points, but lots of points. You can redeem these points for enough miles to fly to Europe or Costa Rica or Hawaii. And the best part is that you can repeat this with several credit cards.
I’ve used this technique to travel to Thailand, Greece, Prague and Mexico. All because I spend money on a credit card instead of a debit card. I pay off my credit card every month so I don’t pay interest and I have reminders set up so I never pay the annual fees.
Good vs. bad credit card use
Most people use credit cards very poorly. Most people one use one or two credit cards in their life and carry a balance (debt) over every month. They then have to pay interest on this debt. This is exactly the opposite of what I’m recommending you do.
Instead, you should sign up for several cards a year and never carry a balance, avoid annual fees, and never pay interest. You should find credit cards with large signup bonuses. All while making sure that you’re not spending any more money than you normally would. Then once you close or downgrade the cards you have, open more cards. This is travel hacking.
Credit cards are the easiest way to fly for free
Credit cards are the easiest way to earn free flights all over the world. You see, credit card companies want people to sign up so badly, they offer lots and lots of points as a signup bonus. People often use these points on low value rewards like toaster ovens or cash back. Instead, you can redeem the miles for high value rewards like airline tickets. For instance, you could fly to Greece for 60,000 miles round trip. And it’s possible to get that many miles from just opening one credit card.
How you can make sure you meet the minimum spend
These signup bonuses are contingent on you meeting a minimum spend. This is just an amount that you have to spend on the card in the first 3 months to earn the bonus. This is important because this can seem like a really large obstacle. People will see that they have to spend $3,000 (or whatever it is) in the first three months and they will decide not to open the card because they’re not sure they can meet the spend. And this is a totally reasonable thought process. But the reality is you can always meet the minimum spends.
There are 3 ways to always meet a minimum spend
1) Deferred spending
2) Manufactured spending
3) The old fashioned way
Deferred spending us just the idea that you can charge things to your card now, but not actually spend the money until later when you’d normally spend it. The easiest way to do this is to buy yourself gift cards to places you know you’ll spend money later. Like coffee shops or gas stations or retail stores. In the past I’ve put $500 on gift cards to Chipotle, Starbucks and Shell gas station to meet a minimum spend.
Manufactured spending is spending money without spending any money. For instance, for a while you could deposit money into a Target account with a credit card. Then withdraw the money immediately with no fees.
Manufactured spending changes a lot so you have to jump on them quickly. But when you get one that works its really fun. If I put a specific way to do manufactured spending in this post, it would become outdated very quickly. So my best advice is to google ‘manufactured spending’ or browse flyertalk.com to find current ideas for manufactured spending.
The old fashioned way
The old fashioned way is the most reliable and the easiest for most people. Just ask your friends or family if they have any large purchases coming up. Then go with them to the store, use your card to pay and have them pay you back.
The bottom line is that the minimum spend is not a problem.
So here we are. These credit cards give you lots of points that you can use to fly all over the world. You know you’ll be able to meet the minimum spend and you’ll spend the same amount you’d always spend just on a different card. The next question I’m often asked is, “won’t this hurt my credit?”
Won’t this hurt my credit score?
Opening new credit accounts will generally lower your credit score. But only by a few points and only for a short time. If you manage your cards correctly, your credit will likely improve. When I started travel hacking, I had very little credit. The more I’ve managed my cards responsibly, the better my credit has gotten. Now I have an “Excellent” credit score. This is a result of not missing any payments combined with the other credit factors – age of credit history, total accounts, and credit usage.
Now you know that Travel Hacking is simple. Sign up bonuses get you lots of points, you have 3 great ways to meet minimum spends even if you don’t normally spend much money, and you know it won’t hurt your credit. Still feel a bit worried about this whole thing? I did too until I set up a system.
I was worried that I’d forget a payment, or that my credit would be ruined or I would be stuck paying some huge hidden fee that I couldn’t get out of. And these fears are totally understandable.
The key to travel hacking is the system. You need to know when to open cards, when to cancel or demote them and how to book flights that give you the most value for your points. And you need to put this system into a calendar so you don’t forget. The system is what makes travel hacking responsibly possible.
Recently, I’ve been looking at what it takes to help people start travel hacking. It’s a bit more than I can cover in this post so I’ve put together a free email course that details exactly how to set up a solid system and earn miles to book free flights all over the world.
This is the same system that I’ve used to travel to Greece, Thailand, Mexico, Prague and several places in the United States in the last few years.
I’ll walk you through opening your first card to booking your first flight. And I’ll show you how to do it so it improves your credit. All for free.
Check it out here: learntravelhacking.com