Travel Hacking for Beginners
Hello, and welcome to your beginners guide to travel hacking! This post is all about how to get started!
You are in the right spot if…
- You have good credit and you have built a credit history.
- You NEVER carry a balance on your credit card/you pay your card off in full every month.
- You are not currently in or in danger of being in any credit card debt.
I would like to preface this post by saying that I am not a financial adviser. I do not claim to be an expert. This particular travel hacking strategy is only worthwhile it if you use your credit card like you would use cash for every day spending. (You’re not spending more than you have in the bank, you pay off your bill in full and on time each month, etc.) You will be negating any benefits you get from these credit cards by carrying a balance and paying interest.
If you’re not currently in good financial shape to start travel hacking, do not despair. All is not lost! Just start working on it today. Make it a priority until you can. You won’t be doing yourself any favors if you go into debt trying to travel hack. That would completely defeat the purpose, because the purpose here is to save you money!
Spend what you would normally spend, earn bonuses, and travel more for less!
Ready to Begin?
If you’re still here, that means you are in good financial shape, and you’re ready to get started!
If you have never had a credit card before, you will need to do some baby steps first.
I highly recommend the Chase Freedom Card. There is a nice little sign up bonus, and it is not difficult to hit (at all). Plus, there is no annual fee!
You earn a bonus of $150 CASH BACK after you spend $500 in your first three months. Really this card is a no brainer if you are JUST getting started on your credit journey.
- Low spending threshold to earn your bonus.
- Start building a credit history.
- No annual fee.
This card is perfect for someone fresh out of high school and/or college (or someone who has never used a credit card) looking to get started with building a credit history. Practice healthy financial habits from the start. If this is you, get started now so that you can easily transition into travel hacking later when you’ve got a steady source of income and some stability in your life. Plan ahead 😊
Once you establish some credit, get comfortable spending on a credit card, and practice paying off your card in full, then you’re ready to up your game!
If you know that you want to do some big travel hacking down the road, HOARD THOSE POINTS! I explain more on why later in this post 😉
Intermediate Travel Hacking Stage
You may be able to skip this stage too depending on your own unique circumstances. It’s totally up to you given your credit history, financial stability, and comfort level with travel hacking.
This is a good step if you’re looking to get your feet wet and build some confidence.
This was me a few years ago. I knew I was interested in traveling and wanted to travel more, but I was just starting to dabble. The perfect choice for me at that time was the Gold Delta SkyMiles Credit Card from American Express.
If you are totally new to travel hacking and/or just like I was a few years ago, I recommend this card. It’s a good way to get your feet wet. There is an annual fee of $95, but it’s waived your first year. That’s a good opportunity to try this out and see if it’s for you!
There is a nice sign up bonus right now of 40,000 miles when you spend $1,000 in the first 3 months + a $50 statement credit when you book your first Delta flight in that time period too. The bonuses on this one fluctuate often, so when you see a good sign up bonus you have to snag it! If this is a card you are interested in, you’ll want to keep your eye on those bonuses and sign up while the bonus is high!
With the Gold Delta SkyMiles AmX, every 5,000 miles is worth $50 towards a flight. The 40,000 bonus miles equates to $400 worth of free travel! Because you need to spend $2,000 in your first three months of opening the card to get the bonus, it’s smart to plan for this card when you know you’ll have a large expense coming up. The perfect time to apply really is when you’re about to book a flight.
If you know that you 100% will not spend $2,000 in the first three months, then this option isn’t for you. There’s no point going into debt or just recklessly spending money in order to hit that bonus. If you do some creative planning of expenses though, then you can probably do it…especially if you’re booking a special trip!
I have had this card for 4 years (going on 5 years) now. It has served me well for a time, but I have moved on to more advanced travel hacking. I have outgrown the card.
You may find that after your first year you have outgrown the card too. If so, just call American Express. Tell them that you’d like to close out your account and transfer your credit to a different card without an annual fee 😉 I have a hunch that they’ll end up waiving the annual fee for another year for you if you make that call…
I have already made a switch to the ULTIMATE AND BEST TRAVEL REWARDS CARD AVAILABLE. Before my annual fee is due on my American Express, I’ll be switching it over to a fee free card.
Here are a few of my reasons why…
Keep in mind, I feel that I have reaped the best possible rewards from this card, and now it’s time for me to move on.
When I signed up, they offered a huge sign up bonus of miles, a statement credit, free checked bags, priority boarding, among other perks. It was a great deal, and I flew to both San Francisco and Salt Lake City (two separate trips) for free ($11.20 in fees/trip) with miles left over! The value of those trips combined was at least $1000.
Sounds amazing, right?
Then, something super disappointing happened. This happens a lot with airline rewards cards…American Express and Delta completely devalued the program. All of a sudden, my miles were worth 2X LESS than they had been before. I estimated that my two flights out west were a $1000+ value. In order to score those flights with rewards miles now, I’d have to have 100,000 miles! I had no where near that when I booked those flights. I believe I had around 50,000 miles. Then, throw in the $95 annual fee every year after the first year. Boo.
They took the miles program and made it a fixed rate program. Each 5,000 miles accrued is only worth $50. (Or 10,000 miles is worth $100…my brain likes those number better.) With this card, you only get 1 mile per dollar spent on all expenses except flights. There are other cards out there (like the one I recommended earlier from Chase) that give you more points on different kinds of purchases. You accumulate lots of miles when you book a flight with Delta, but you would get those reward miles with your SkyMiles number (and without the card) anyway.
You can use points to pay for a flight or you can use a combination of points and miles. HOWEVER, if you do that (say you use 5,000 miles for $50 off your flight), YOU DON’T EARN ANY MILES ON THAT FLIGHT. UGH. WHAT THE HECK?
My biggest purchases that I’d like to get a discount on would be my longest flights. If I use my miles on those flights, then I miss out on earning thousands of miles. My strategy here is to use points on shorter flights within the US.
Another problem that I ran into with American Express is that it is not widely accepted outside the US. Many places in the UK will accept it, but outside of the UK I haven’t had any luck.
My American Express has no international fees, but when it wasn’t accepted in Portugal and Spain and Greece, I had to use other cards. Those other cards charged a 3% fee per transaction. (I fixed that problem with my new and improved travel hacking strategy now!)
When traveling abroad, I was stuck with this American Express that I couldn’t use (for the most part) outside the US, paying an annual fee of $95, earning only 1 mile(point)/dollar spent, getting charged foreign transaction fees on my other cards, and the miles I had accrued lost a huge amount of value.
What’s a solo-travel-loving-girl-who-needs-to-travel-hack-to-cut-expenses TO DO?!?!
The Ultimate Travel Rewards Credit Card
Ok, so you’re beyond the stage of a “no-credit newbie.” You’ve also dipped your toes in the water, and you’ve decided that this travel hacking thing is for you! You’re ready to dive in!
Yay! I’m so excited for you! This is where things get REALLY GOOD.
Are you ready for this?!?! The mother of all mothers. The best of the best. DRUM ROLL PLEASE!!!!!
The hands down best credit card available for travel rewards (in my humble opinion) is the Chase Sapphire Reserve. This is the card that I switched to, and I am abso-freaking-lutely loving it!
Ok, so you have two options here. You need to assess your travel style and needs and then weigh the pros and cons of each card to figure out the option that will work the best for you.
Some questions to consider…
Do you travel AT LEAST once per year?
Do you purchase travel insurance on your big trips?
Are you interested in applying for Global Entry or TSA PreCheck?
Would you like priority access to 1,000+ airport lounges across the country/world?
The Benefits of the Chase Sapphire Reserve
This is where it is important that you answered yes to most of the questions above.
The Sapphire Reserve comes with a steep annual fee, but you NEED to hear me out on this one.
Ok, so the annual fee on this card is a whooping $450. OUCH.
I’d by lying if I said that I did not recoil in fear and disgust upon first hearing this. Keep reading.
When you look at the benefits of this card, that steep annual fee might just be worth it to you.
For me, the annual fee will MORE THAN pay for itself. It’s money that I would have spent anyway…
$300 Travel Credit –
If you spend at least $300 on travel annually, that annual fee gets knocked down to $150 right then and there. Uber and Lyft usage count toward the travel credit too. Yay!
Travel Insurance –
Baggage Delay, Emergency Evacuation & Transportation, Emergency Medical & Dental, Lost Luggage, Travel Accident, Trip Cancellation & Trip Interruption, Trip Delay, Roadside Assistance to name a few.
For my big trips like yacht week and my month-long trip to Portugal, I spent over $150 on travel insurance each time…
Auto Rental Collision Damage Waiver –
No worries if you rent a car on your travels!
Airport Lounge Access –
Priority Access to 1,000+ airport lounges in the US and worldwide. I have not been an airport lounge gal, BUT I AM ABOUT TO BE.
Free food, drinks, and WiFi anyone? A comfy and exclusive spot to relax before a flight? I’m in!
Priority Lounge Access is a $399 value, and it’s included with your card!
Global Entry or TSA PreCheck Fee Credit –
You read that right!
You get a $100 statement credit toward Global Entry or TSA PreCheck once every 4 years.
Global Entry covers both for $100, so go for that one if you do or want to do any international travel.
TSA PreCheck is $85.
What’s the value of Global Entry or TSA Precheck? Less time waiting in line at security and customs!
3X Points on Travel Worldwide
3X Points on Dining Worldwide
1X Points/$1 Spent on Other Purchases
50,000 Bonus Points –
You do have to spend $4,000 in the first 3 months. Like I said before, pick a time when you have a big expense already coming up. For example, I timed mine for a trip that I am planning to Italy. I can hit my bonus when I combine those expenses with my regular monthly spending. I will also earn 3X the points on these travel related purchases.
50% More Value in Travel Redemption –
When you redeem for airfare, hotels, car rentals, and cruise lines through the Chase Travel Portal those 50,000 bonus points turn into $750.
If you have any other Chase cards (like the one I recommended earlier for a true beginner), you can combine those points with your Sapphire points to get that extra 50% value! YES!!!
You can also transfer points (1:1) to any of Chase’s travel partners and use them that way too. WIN.
If you’re smart about how you redeem your points, you can get a huge return!
No Blackout Dates or Travel Restrictions –
Chase has one of the most flexible and robust travel redemption programs out there!
Contactless Card –
I just think this is super cool…especially if you’re traveling in Europe. Just tap and pay! I’m so excited to try this!
Luxury Hotel & Resort Collection
Car Rental Privileges
Elite Hotel Benefits
No Foreign Transaction Fees
Access to Visa Infinite Concierge
Purchase Protection & So Much More!
So yes, I know that the annual fee is steep. However, considering the $300 travel credit, the $100 to cover my Global Entry fee, the Priority Lounge Access worth $399, the Travel Insurance that I would have spent at least $150 on…I’m actually coming out ahead here.
Plus, I’ll have $750 in bonuses to spend after I hit the required spending in the next 3 months.
If the time comes when I’m not taking advantage of the benefits, I will switch to a different Chase card…more on that next.
I realize that this card is not for everyone. You also need to have great credit to be approved. I think it helped that I have already been a Chase Customer for…my entire life. I’ve had a credit card with them for the past 10 years at least (the Chase Freedom Card that I recommended earlier).
If you’re young and just starting out, get that first Chase card now! Did I mention that the Chase Freedom card has 5X points in rotating categories every few months (gas, groceries, etc.)? Just another reason why I recommend that card if you are a complete newbie to credit cards. Save all those points for when you are ready to add the Sapphire Reserve to your wallet 🙂
Not Sure If The Reserve Is Right For You?
If this card is too much for you, the Chase Sapphire Preferred would be the way to go.
It is similar to the Reserve, but the annual fee is only $95 and is waived in the first year.
You have the same spending bonus (50,000 miles for spending $4,000 in the first 3 months), but the points are only worth 25% more verses the 50% more you’d get with the Reserve when redeeming in the Chase Portal.
You also only earn 2X points on Travel & Dining whereas you would earn 3X points on Travel and Dining with the Reserve.
No $300 travel credit
No fee credit for Global Entry/TSA PreCheck
No Priority Lounge Access
No Travel Insurance
& So On
Personally, I believe that the Sapphire Reserve is the best value if you’re ready to get serious about your travel hacking strategy.
If you aren’t going to use the benefits or you can’t get approved for the Reserve, then the Preferred is a good second choice!
One more thing to be aware of in your travel hacking strategy is Chase’s 5/24 rule.
You won’t be approved if you have opened 5 or more cards in the last 24 months (your Victoria’s Secret, Express, and Home Depot cards all count in that 5/24 rule). This is why it is important to start early and to create a strategy that will work for you and your lifestyle.
After you have hit your spending bonus with the Reserve, your strategy can be to only use it for Travel and Dining expenses to get those 3X points. Then you can research and apply for other cards with high bonuses and put all your spending there until you hit that bonus and so on.
If you have the Chase Freedom Card, you can go back to using that on purchases in the 5X points category to really up your strategy. With a little research and planning, you can be rolling in rewards points!
I have already thrown A TON of information your way, so I do not want to overwhelm you any further. This is definitely enough to get you started and keep you busy for a while.
If you’re interested in more travel hacking strategies (some involving credit cards and others NOT), put your email in below so I can keep you in the loop! Make sure to check your spam folder if you don’t see a confirmation email.
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As always, thank you for your continued support!
Disclaimer: First, I want to stress again that I am not a financial adviser, and I am not claiming to be an expert. You need to be honest with yourself about you finances and your credit habits before opening any new credit cards. I absolutely do not want anyone to go into debt trying to travel hack. Second, this post does contain referral links. If you use my link, apply for the card, and are approved, I may receive a referral reward. Please know that I put my name and reputation behind any product or service I refer. Therefore, I only recommend products and services that I use and love. Referral bonuses and affiliate links help me to offset the cost of this blog. You do not need to use my referral links, but I would be grateful if you do!