Travel Hacking
I just got back from two and a half weeks in Michigan. It was just lovely, getting to go to sleep with the sound of a lake lapping the shores. I honestly had no idea that lakes can look and be like the ocean, but they do in Michigan! While I’ve been away, I read a newsletter from my friend, Meg Wheeler, all about travel hacking, which I also LOVE to do. So, I asked her for permission to share what she wrote.
By CPA Meg Wheeler
It’s no secret that I love to travel, and I know many of you share in that love too! But with limited time and resources, my travel would be pretty limited if I didn’t have one tool:
Travel hacking.
Travel hacking is the practice of strategically using credit cards and other travel rewards programs to earn points and miles to pay for travel.
For this week’s Friday Money Tip, I’m sharing with you my favorite travel hacking tips. But first, a few pieces of advice:
If you struggle with credit cards or debt, or you’re feeling overwhelmed in life right now, or you’re barely scraping by enough to pay your bills, skip this email for now. You can always come back to it, but travel hacking takes time, discipline and flexibility that you may not have right now (and that’s OK!.
DO NOT get obsessed with travel hacking. It’s great to be able to take your family on awesome trips for free, but what’s most important are the experiences of traveling and spending time with people you care about. I’ve seen too many people become so obsessed with getting the best flight deal or maximizing their points so much that they’re barely present for the actual trip.
Don’t be afraid to still pay for travel. Sure, there are travel hackers out there who would cringe at the thought of paying anything for travel, let alone full place, but I say ignore them. To truly never pay anything for travel you’d have to travel hack A LOT and with many demands on our time, this just isn’t realistic. So don’t feel like you’re not doing it well enough or you’re getting a lesser deal just because you have to pay for travel. The truth? As much as I get lots of stuff for free, I also pay for travel - regularly.
OK… now onto the tips!
Follow other folks who do this regularly (don’t reinvent the wheel). My favorites are:
Nail down what your priorities are. Is your goal to take as many trips as possible? Or do you prioritize nicer seats on the plane or a better hotel room? Do you care about lounge access or seat upgrades? Once you understand your priorities, you can choose a strategy that makes sense for your goals.
Start by choosing the right credit card. While one of the strategies of travel hacking is to constantly open new credit cards to take advantage of welcome bonuses, I don’t recommend starting there. When not done correctly, you can harm your credit and end up paying costly fees and unexpected interest. Instead, find one card that gives you the most bang for your buck based on where you spend on the card and where (and how) you want to travel. One of my favorites is the Chase Sapphire Reserve card (affiliated link) because the points can be used with a lot of different brands and are generally easily transferable (in most cases).
Discover what benefits you may already have. You may already have a credit card that gets you upgraded status with an airline, an annual credit towards certain purchases, or other valuable benefits. A lot of professional organizations and societies also come with these benefits - so check everything in your wallet! Make a list of all of the benefits you have and then a plan to use them (but only if you want to, no pressure!).
Start assembling your travel hacking toolkit. Here’s what’s in mine:
Credit Cards
Chase Sapphire Reserve card: All of our monthly spending goes on this card, plus any big purchases (including travel). The card not only has great reward earning rates, but great benefits as well. For example, it has trip cancellation and interruption insurance - but only if you use the card to pay for the trip. And while the annual fee is steep ($550), the benefits can often offset it. For example, you get a $300 credit towards any travel purchases you put on the card.
American Express Delta card: This is not necessarily the right card for newbie travel hackers, but it’s valuable in my line-up for two reasons: 1) I fly Delta a lot (they have a lot of good flight options from Boston) and 2) I use the card to get and sustain my status with the airline, which gets me upgrades, reduced fares and other perks. Plus, it gets me access into the Delta lounges and the fancy schmancy Centurion lounges. Depending on where you fly out of, you might find that the JetBlue, American Airlines or United card works better for you. But I wouldn’t start out with an airline-specific card! Start with a more general card, like the Chase Sapphire.
Shopping Portals
Both of these are extensions to my internet browser and allow me to earn points every time I shop online (The Points Guy has a great guide on how to do this).
Cashback Monitor (aggregates all of the portals)
Trip Planning
Google Flights: Allows you to track flight prices and get alerts when they drop.
My10X: A new tool in my kit, My10X helps you manage all of your credit cards and loyalty accounts and helps you optimize the benefits you get.
TripIt: Not specific to travel hacking, but I use this tool to track every trip we take and it keeps me organized.
Set a concrete goal. Instead of starting travel hacking just for the hell of it, have a specific trip goal in mind (like taking the family to Disney or a girls beach weekend for your 30th). Having a specific travel goal in mind will not only help you stay focused but guide how you start earning your points.
My Strategy
How we Travel:<> Since my son is in school full-time, traveling a lot just isn’t an option for us. Instead, I prioritize 1-2 “big” trips with a few smaller trips sprinkled in each year, and when we travel, I prioritize traveling well (seat upgrades, nicer hotel rooms, etc.) since we’re not traveling as often.
How we Spend:<> I don’t spend the extra time maximizing my credit card spending like I could. For example, I don’t put groceries on one card and restaurants on another depending on which one pays more points per category type. This is absolutely something people do - I just don’t have the time for it. Everything goes on our Chase card, except for my son’s school which goes on the Delta Amex to hit the spend for my status. I also try to pay the bill any time we go out with friends (who then reimburse me) and put all of my business expenses on a credit card (which then gets paid off).
How I Book:<> I also don’t spend my time scouring Google Flights for the cheapest flights or jumping on mistake fares. We usually have a specific window of time we can travel (due to school schedules) so our dates are not as flexible as most. That means that I’m more focused on tracking the flights I want so that when they go down in price, I jump on them - either by paying outright or using points.
This is also why I like putting mostly everything on our Chase card. I can easily transfer the Chase points to many airlines and hotels, so if I find something that works it’s easy to book it (side note: don’t book your travel directly through the Chase rewards site - too many issues!).
Lastly, I’m very on top of the rewards that come with all of our cards and memberships. These are some of the most valuable benefits I currently have:
$300 travel credit (Chase Sapphire Reserve card)
Annual Delta Companion Pass, which can be used for one free First Class ticket to anywhere in the US, Caribbean or Central America (American Express Delta Reserve card)
Save 15% when I use miles to book award travel on Delta (American Express Delta Reserve card)
Access to the Delta lounges and Centurion lounges (American Express Delta Reserve card)
Access to the Chase Sapphire lounge (Chase Sapphire Reserve card)
5x points for travel booked via Amex Travel (American Express Platinum Business card)
$189 CLEAR Plus Credit so that my annual CLEAR membership is free (CLEAR is an expedited security process which gets you through airport security faster and can even help you jump the line at certain sporting or entertainment venues!).
Bottom line - travel hacking is an ENTIRE world and while it can lead to exciting adventures, it can also become overwhelming and time-consuming real fast.
So pick your priorities, set a goal and start small.
Got questions? Contact Meg Wheeler at Equitable Money Project.
Meg K. Wheeler is a CPA and financial literacy coach who founded the Equitable Money Project to offer free financial education and done-for-you tax, bookkeeping and CFO services for primarily marginalized business owners.
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