1. Pay Your Credit Card Balances in Full Each Month
This is one of the most important rules to start your travel hacking journey with points and miles. You must pay your credit card bill in full and on time each month. If you run up any interest charges, it will offset the value of the points you are earning on your purchases. The credit card companies are able to offer these great benefits and perks because of the people who pay loads of interest each month. That is the cash flow for these banks. Don’t let that be you, and we will all keep collecting the rewards and points.
The other part of this first step is to spend within your means. If there is a new card with a high signup bonus, make sure you can get to that sign up bonus without stretching your wallet. If spending $6,000 in three months is too much, that is ok! It is more important to stay within your means and reroute to a different card.
2. Must Hit Minimum Spend for the Sign-Up Bonus
Following step one, the second step is meeting the minimum spend. When you open up that credit card, you must know that you are able to meet the advertised minimum spend in the allotted amount of time. $4,000 in three months. $15,000 in six months (for those big spenders out there). Both of these are minimum spending requirements that you must hit before getting the sign-up bonus. Once this is done, the sign-up bonus is awarded. These sign-up bonuses will be the easiest and best way to earn the most amount of points. This is where you can optimize the points earned and leverage these bonuses for your next vacation.
3. Set a Goal Before Opening a Credit Card
Once you are ready to open a credit card, you should first set a goal. This will help you know what trip or reason that you are looking to work towards. The main two questions to ask yourself should be:
- Are you opening a card for a specific trip?
- Or are you just accruing points that can help you plan a trip down the road?
For a Specific Trip:
Congratulations! You have already gotten that travel bug and picked a destination. Now, the goal is to find a cheap way to get there and stay there, so you can spend your money on what matters most…food.
I would say to first start with finding your flights on the days or range of days you plan to travel because flights will most likely be your biggest expense and the least flexible. You want to try and build up your points to book the certain flight. If that perfect flight from Chicago to London on United is available for 40,000 points round trip, then you want to look to open a Chase card such as the Sapphire Preferred or Sapphire Reserve with a 60,000 point sign up bonus. Once that bonus hits, you’ll transfer the Chase points to United and book the flight!
For hotels, they are second to think about because the point values stay mostly the same compared to flights. Because of this, if you find that perfect Hyatt property in London, you have time to build the points up or that are left over after booking the flights. So, for example, if you found that one United flight for 40,000 points round trip. Then, you find a Hyatt Hotel for 3 nights for 6,000 per night. You would look for a Chase card with a signup bonus of at least 58,000 points to cover the full trip (probably not possible in London, but you get the point). Same concept if you needed more than one card and two sign up bonuses to cover the trip. I offer a Card Consultation where I can offer you strategies of what card to open next based on your destination and desired trip!
Accrual of Points Over Time:
The other option (or an idea if you aren’t currently traveling) is accruing points over time. This strategy is selecting a credit card based on the best bonuses available at the time. I recommend to most everyone who isn’t planning for a trip. This is opening the Chase Sapphire Preferred or the Capital One Venture X because they have solid bonuses and are transferable to many different options. Gaining points is the name of the game. Then, once that trip is possible, you will be ready to book and already have the points.
These are the first three steps to take when you are starting your travel hacking journey with points and miles. Having responsible spending habits and knowing to hit your minimum spends are the two most important factors to consider. Then, once you establish that, you can start the fun stuff. Planning trips and earning points! I’m always available to help you if there are any questions when first starting. I have my Travel Hacking Guide, and I also offer a Credit Card Consultation Service where I can help plan out your next cards to open to be able to book that next bucket list trip for nearly free on points and miles.
