Travel Hacking... and Why I Don’t

Travel hacking is the art of collecting credit card bonuses, frequent flier points, and miles to get free flights, hotels, tours, and more.  There are many people busy earning free trips, and googling “Travel Hacking” leads to a gold mine of tips.  It seems like a frugal dream.  Why don’t I jump on that?

A Couple Reasons...

  1. The thing all travel hackers seem to have in common is spreadsheets, spreadsheets, spreadsheets.  Miles expiring, credit card minimum spends to reach, annual fees coming due, credit card cancellation reminders, company phone numbers, credit card numbers, accounts in case a wallet is lost or stolen... all that has to be tracked.  That’s a lot of time and energy.
  2. The more there is to keep track of, the more room there is to miss something important.  For example, missing a payment can be detrimental to a credit score, and forgetting to cancel before the annual fee hits can wash out the benefit entirely.  I personally have so many things going on (a day job, Airbnb, blog, etsy business, and wedding to plan) that I would be a prime candidate when it comes to missing important things, but anyone can miss anything.  I pay all my credit card balances off entirely every time my paycheck hits my account (so twice a month), but forgetting a charge or forgetting to link the account to Mint?  I’d be in trouble, especially when it comes to tracking expenses throughout the year and preparing for tax time.
  3. Travel credit cards often lock you into their specific brand.  They’ll give you plenty of bonuses, but the miles can be difficult to take advantage of.  Often the routes are inconvenient, they won’t give you a direct flight, or the dates you want are blocked out.  Even the Barclay Arrival Plus (revered in the travel hacking community for its sign up bonus and ease of use) earns only 2 miles per dollar, which equates to 2% cash back, but you have to redeem for travel and pay an annual fee.  A cash back card doesn’t lock you into travel, and often has no annual fee.
  4. If the plan is to travel anyway, it’s no big deal to be locked into the category.  But what if you accumulate all the points and then can’t use them, either due to a busy work schedule or health issues that come up?  The points will expire, and you’ll be left with nothing.  Instead, you could have gotten the cash back.
  5. If you are using what could have been cash back to travel, you’re still paying for it, just in a different way.  It’s no different to get $200 cash back and buy a $200 trip than it is to redeem points/miles for a “free” $200 trip. You can still allocate the cash back money toward travel, but have flexibility to spend elsewhere if you wanted to.  Cash is fungible.

The Credit Cards I Use

I have an Amazon card that earns 5% cash back for all Amazon purchases.  I use my Chase Freedom card and my Discover card for 5% cash back with rotating categories (I have a sticky note with the current category attached to the card in my wallet so I remember).  For everything else, I earn an automatic 2% cash back on everything with my Fidelity card.  I save that 2% throughout the year, and then I use it to jump start my IRA contributions in January.  It’s usually about $200 or less toward the IRA, considering most of my spending is house bills (paid with cash), Amazon, or one of the rotating cash back categories.However, it’s still a nice extra bump.​

With my 800+ (I believe it was 809) credit score, opening new cards is easy.  I tend to be strategic when opening new cards.  Right now, I have a 0% credit card that I am using to tap future the cash flow from Airbnb early, since January is a time of piling money into the IRA and March is the busy season when cash pours in.  I did open a card in November when wedding spending was going up, just to get an extra sign-up bonus for spending I was doing anyway. However, I generally prefer simplicity, and find that cash back adds more ease.

Strategically Opening New Cards

Almost all the benefits of travel hacking come from the sign-up bonuses.  Open new cards when you have increased spending coming up (like a $2,000 deposit on the wedding venue).  Don’t spend for the sake of getting the bonus, since that’s just wasteful and detrimental to your long-term goals.

If you have a very specific trip in mind, it often makes sense to travel hack.  There can be extra perks like free bags, discounts, etc. from holding the credit card.  However, your trip planning should start first.  For example, say you were flying from Tampa to Detroit regularly because you just moved across the country and miss your family and want to make sure you’re not missing out on birthdays, holidays, etc.  Spirit Airlines has cheap ($100 round trip), direct flights at convenient times most weekends.  Open that Spirit Airlines card and take advantage of the sign-up bonus and perks.  Don’t get sucked into a trip you aren’t eagerly planning for just for the sake of redeeming miles you didn’t really need to accumulate to begin with.

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