I’m going to skip right to how travel rewards hacking works. If you happened to land on this Part 2 article and feel lost, Please go back and read part 1 here.
Travel hacking is a outstanding way to see the world in a cost effective manner without emptying the bank.
Here’s how it works:
You open a credit card that offers travel rewards for using their card service, and then you use it to accumulate points. Is it really that easy? Well, yes it is. Here’s why. These aren’t your standard cards. Yes, these cards offer points per dollar spent, but the real kicker comes in the form of a bonus. Some cards will give you a bonus of 50,000-100,000 points for hitting a certain spend requirement in a specified time.
For example, Chase has a few cards that will give you 50,000 bonus points for spending $4,000 in 3 months.
Opening the right cards at the right time really matters! I can’t stress this enough and I’ll use Southwest as my example why in a bit. With some planning and foresight, you can really hit some incredible bonuses.
If you’re seriously considering this, Step 1 is figuring out if you spend the required amount within the timeframe to make hitting the bonus possible. We spend roughly $1,500 a month in credit card worthy purchases which puts us in a perfect position to hit that bonus.
What happens after the bonus:
After you’ve hit the bonus on your first card, it’s time to open another card and get that bonus. So basically, you churn from one credit card to another, hitting the bonuses and accumulating travel points to be used towards future purchases. Once you’ve completed one card, you can choose to leave it open or close it. This will be a case by case decision because closing some cards will cause you to forfeit your points.
We only close our cards for two reasons:
- Most cards will allow you to hit the bonus again after a set amount of time has passed since you last hit it. Chase, for example, will allow you to hit the bonus every 24 months. That’s why we close the accounts; so that we can open them again down the road.
- Most reward programs allow you to transfer points to other members of your household. So, we’re closing a card that would cause us to forfeit the points, I first transfer them to my wife’s account and then close the card, or vice versa.
We’re fortunate for the fact that every card we open, we get to do twice. Once in my name and once in Jessie’s. Therefore, a 50,00 point bonus turns into 100,000 after we both use the card to hit the bonus.
Like I mentioned earlier, you can get really creative with this. Here’s the Southwest example: Southwest (at the time of this writing) offers a companion pass if you fly with them enough to hit 110,000 travel points in one calendar year. That’s 50 round trip flights to be exact. That’s hard to do unless you travel very frequently.
It becomes much easier using the Chase Southwest cards. Chase offers 3 southwest cards, two of which offer a 40,000 point bonus. Now let’s say you open one card and hit the bonus in February, and open the second card and hit the bonus in May. What does that do for you? The exact same thing as 50 round trip flights. If you combine the 40,000 point bonuses and the points from your spending on those two cards, you’re much closer to hitting the 110,000 points needed for the companion pass. Then, you and a friend get two for the price of one on EVERY flight not only for the rest of the year. Wait, that’s not the best part, you get that same deal for the following calendar year as well! That’s a year and a half of BOGO flights with Southwest.
Do I have your attention now??
Sign up below (if you’re not already a part of our community) to make sure you don’t miss the rest of this series!