travel; beach

Travel Rewards Hack Pt 2: How Does It Work?

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:

  1. 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.
  2. 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.

Getting Creative:

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??

 

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This Post Has 34 Comments

    1. Hey Laurie! It’s definitely something to aspire to. It took us a little time to work up the nerve, but as you master a each new skill, they become less scary as confidence grows.

  1. Such good advice. My husband opened a SWA card last year, then closed it this year and I opened one – so we were able to get enough points for a few free flights each year, but I never thought of opening two in succession to get the friends fly free benefit. Great example.

    1. Thank you for the kind words! Glad we could help provide a little bit of a super charge to a skill you already have!! Let us know if we can help at all Pam.

  2. I don’t use credit cards, but this sounds like a good idea for people who do and like to travel.

  3. Excellent strategy. Nothing like getting benefits from the credit card companies!

  4. Great point even I am not a big fan of credit card, but I can see there is lots of benefit of it.

    1. It definitely has to be done correctly and responsibly!

  5. Opening the card at the right time is such great advice and probably easily overlooked sometimes.

  6. Interesting strategy. Thank you for sharing.

  7. We use our Chase Disney card and use the rewards for our vacation every year. I will be watching to see how your tips can help us achieve more travel!

  8. You’ve got this down to a fine art!

  9. Very interesting! I have never paid much attention to the points and what they can do, so having it explained like this was quite helpful. thanks!

  10. Wow! Such great tips. I knew about getting rewards through different credit cards but I never thought to open one, earn the reward, and then open the next. Great tips especially since we lover to travel.

  11. This is very interesting! My husband and I rarely use credit cards, your system makes sense. I just don’t like to use credit cards.

  12. Love this!

  13. We do something along these lines. We actually just each have 1 Reward card each – tried the opening and closing hack before and it dinged our credit too much..Aargh! Anyways my husband puts all of his business expenses on his and those sometimes run into the thousands every month; he gets cash per diem before the trip and uses that to pay the card off at the end of the month. I use my credit card for all our expenses – everything that will allow me to pay with a credit card – around $3200 a month and then I just pay it off every month. This has a double positive effect – it gives us GREAT credit and we earn a TON of free travel. What I like best about our Reward card is it can be used for ANYTHING travel related – food, taxis, groceries, airfare, hotel, etc. anything as long as your not in your home city. We rack up points which equal $1 and then anytime we use our credit card to pay for anything travel related we can use those dollars to pay the bill. It takes some time but we’ve definitely used it to our advantage. With my husband’s travel benefits from flying every where we haven’t paid for an airline ticket or hotel in about 4 years. We just spend a long weekend in the Keys and paid for nothing!! Great post!

  14. So much great information here. Thank you. I subscribed to your blog and pinned this article.

  15. It can be worth it to investigate the best card offers. I wish I had the time and desire 🙂

  16. I don’t have any travel rewards cards, and I feel like I’m missing out. If handled properly, they can be such a great resource.

  17. You’ve done your research! Awesome – great tips!

  18. This is some very good advice! I will be pinning this article for sure so I can remember this for the next time I travel!

  19. Interesting strategy – how does it affect your credit score? We do use one card and try to put larger purchases on it so we can get points.

    1. Hi Tina!

      Part 4 of this series will talk about the impact on credit scores. Stay tuned tomorrow!

  20. These are some great tips to help people get out of debt, and travel with a happy stomach at the end – knowing there is not an enormous amount of debt to repay.

    1. All important things!! 😀

  21. We love traveling on a budget which is why we do a lot of cruises. How does opening and closing accounts affect your credit score?

    1. Hey Monica!!

      Part 4 of this series will talk about the impact on credit scores. Stay tuned tomorrow! I hope you had a great weekend.

  22. We opened a southwest card this year, bec we knew we were buying granite. We’ve used points to go to Florida, Las Vegas and soon LA! Thx!

    1. Yes! That’s wonderful! It was one of the best decisions we’ve made!

  23. Wow – these are great tips!! I just got a big bonus on my JetBlue card and was able to use it to pay for one of our flights on an upcoming vacation!

  24. This is something I kinda did once but currently we have to clear all my credit cards before trying this method. Glad you were able to make it work for you!

  25. great tips! I’m certainly using them!

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