Travel hacking with US credit card points

What the heck is travel hacking?

I have been traveling for decades, mostly on a shoestring budget (and I mean a real shoestring budget, not $50 a day). I write about travel hacking in the United States since that’s where I’m based and what I know. The US banking system offers more perks than any other I’ve looked at and if you live here, it would be a crying shame not to take advantage of it.

This is a primer on travel hacking and how I go about it.

Travel hacking is a legal way of collecting loads of credit card points and bonuses to be used for booking flights and hotels. Striving for a loyalty status with a hotel or an airline for added perks, upgrades, and freebies is also a part of the game.

Travel hackers pride themselves on getting the most value out of their points. Some go for luxury experiences that would otherwise be out of the reach of mere mortals, some go for quantity (the most flights or hotel nights for the least number of points), and the majority (myself included) do a combination of the two.

My personal record was 2 completely free nights (zero dollars, zero points) at Park Hyatt Sydney and 2 at Park Hyatt Vendome in Paris (both valued at $900-1300/night) and a flight to Bali with a 2-month layover in Europe for only 30k points. The offers I used no longer exist but there are plenty of new ones to take advantage of.

Here’s how I do it:

1) Make sure you have an excellent credit score

I talked about the how and the why of a good credit score here: A quick guide to a stellar credit score. For travel hacking purposes, it should be above 700 but higher is, obviously, better.

A credit score measures how trustworthy you are and how long you’ve been proving it. I keep my accounts organized. I have a budget, I use spreadsheets to track my accounts, spending, payments, and bonuses, I pay on time and in full, and check my score regularly.

My current credit score

2) Research what perks the various cards offer

There are many reward programs out there. Do you have a favorite hotel chain or airline? Do you want to travel within the US or all over the world?

I write down my priorities and travel dreams. Then I look up cards that offer points transferable to hotels and airlines that would make those dreams possible.

I like Hyatt hotels, I want to have a big pool of airlines to choose from for each trip and I want to travel far and wide. For me, the best reward program is the Ultimate Rewards with Chase bank. I can collect points with their many cards and transfer them to Hyatt and any of the Star Alliance airline partners.

Star Alliance partners

I also look up what other perks the card offers. Some give me cashback on each purchase, some offer insurance on travel, cellphone, or rental cars, some let me access airport lounges, some give me a hotel status and some give me all of the above.

For example, if you’re planning a big purchase, the Ink Business Preferred from Chase Bank is your girl. It rewards you with 100k points (a minimum $1000 worth, much more if used for travel) for spending $8k in the first 3 months, the ability to transfer the points to “travel partners” (Hyatt hotel and Star Alliance airlines), Rental car insurance, Cell phone insurance (up to $1000), Travel emergency assistance, No foreign transaction fee, Extended warranty (by one year), Purchase protection for items you buy with it – for 120 days against damage or theft, up to $10,000 (and a hefty referral bonus to boot, which you can generate as soon as you get the card). I wrote about getting a business card without a business here, have a look.

Ink Preferred benefits are well worth the $95 annual fee

3) How much are points worth?

Not all points are created equal. With Bonvoy points, you can expect to book about 0.7 cents per point worth of hotel stays, whereas Hyatt points are worth about 2.8 cents each. So you’d need 3x more Bonwoy points than Hyatt points to book a hotel room of a similar value.

For example, the 100,000 Chase Ultimate Rewards points that you earn by applying for the Chase Ink Preferred card, spending $8000 in the first 3 months, and paying the $95 annual fee, will get you over $2000 worth of nights at Hyatt, or 3 flights between the US and Europe, or $1000 in cash (as a statement credit). As you can see, getting cash is often the worst value for your points but free $1000 is still an amazing deal.

Examples of 100,000 Chase Ultimate Rewards redemption options, at the time of writing this:

• $1000 statement credit
• 16-28 nights (depending on the season) at a Category 1 Hyatt hotel such as Hyatt Place in Cabo, Mexico
• 2 nights at the best Hyatt hotel I’ve ever stayed at – Category 8 Alila Ventana Big Sur, California
• 3-4 nights at Category 7 Park Hyatt Maldives
• 3 flights between the US and Europe with Air France (or another Star Alliance airline)
• $1250 worth of travel booked through the Chase Travel Portal
• and many more options, just look up “travel hacking with Ultimate Rewards points”

Thank you if you’re considering applying through my link. For the first five readers that get approved, Chase will throw points my way. You can then generate your own “refer-a-friend” links.

The redemptions can be much greater – I went to San Diego for New Year’s, I spent 2 nights at the Manchester Grand Hyatt in a penthouse suite worth $1100 per night and it “cost” me only 24000 points. All the resort fees, taxes, and parking were also included. And because the hubby has a Hyatt Globalist status, we also got access to the lounge with free food and soft drinks. We also spent 55 magical hours at the all-inclusive heaven of Alila Ventana in Big Sur, California. This little escapade would’ve set us back $6400 had we not used Hyatt points. There’s no catch, that amazing stay cost us nothing.

4) Have enough money to pay the cards in full each month

If I pick a card that requires me to spend $3000 in the first 90 days, I make sure that I will be able to pay it off in full each month. The interest rates on credit cards are exorbitant so I don’t carry any balance into the next month.

5) Choose a card and read the fine print

Credit card companies don’t just hand over the points. Each card has a different set of conditions you need to fulfill to earn the bonus.

Most often it’s a minimum spending requirement. This is usually between $500 and $6000 in the first 3 months after you open an account. More often than not, the bigger the spending requirement, the bigger the bonus. I try to pre-plan my purchases so I’m always working towards some minimum spending requirement.

My favorite cards are ones with no annual fee or ones where the annual fee is waived for the first year, in which case I’ll think hard about whether to keep or cancel the card when the 12 months are up. I usually cancel. I always keep one premium card (one with an annual fee) – Chase Ink Preferred or Chase Sapphire because you can’t transfer points from the no-annual-fee Chase cards directly to travel partners (hotels and airlines). I transfer them first to a premium card and then either to Hyatt or Star Alliance Airlines, depending on what my trip requires.

6) Getting multiple credit cards doesn’t hurt my credit score

Getting multiple cards never hurt my credit score by more than 5 points for each card, and it recovered within a few months. Your credit score is, first and foremost, the measurement of your reliability. I always pay my bills on time and in full. Again, you can look at the Quick Guide to an excellent credit score where you’ll find some useful tips.

7) Apply for the best travel hacking card

I apply for the card that best suits me at the moment. If I’m approved, I set a new due date (I have all my credit cards set to the same due date so I can pay them all on the same day, which makes the whole process simpler). I pay online and track my spending, payments, and bonuses. I use the new card for all my purchases.

Many banks will expedite the shipping of your new credit card and send it to you wherever you currently are, even to your vacation spot abroad. You just need to call or message them.

8) Meet the minimum spending requirements

I use my new credit card for everything I buy. No cash, no bank card, and no other credit cards. Everything goes on this one. If my regular spending is not enough to meet the minimum spending requirement, I’ll prepay my bills. My phone bill is prepaid for 12 months ahead as I write this.

Probably the craziest (and the most lucrative) way I met the minimum spending was through a bet with a company called HealthyWage on my own weight loss. I wrote about it here: Meet minimum spending, lose weight, win cash.

The bulk of my points comes from the sign-up bonuses. Earning points with regular spending after the initial 3 months is very slow unless you regularly spend tens of thousands of dollars each month, in which case you’d probably not have the motivation to travel hack. I compare the minimum spending required on each card and pick one I know I can fulfill. If you regularly spend $500 a month on credit cards and have no other purchases coming up, it would be useless for you to get a card that requires you to spend $5000 in the first 90 days. You can get a couple of Chase Freedom cards instead, that have a $500 in 90 days minimum spending requirement and earn you $200 in the form of 20000 points for each – and I’ll get 5000 points for the first 10 readers who get accepted. I wrote about earning points here: Make an easy $1100 or How to get started with credit card bonuses.

After the first 90 days (or sooner, if I meet the minimum spending requirement), I apply for a new card and repeat the whole process. I will occasionally still use an “old” card if the perks are worth it, like 5% cash back on purchases or some travel perk like a rental car or trip insurance.

9) Look up flights and hotels

When I’m ready to use the points and have a destination in mind, I look up the hotels and flights that my rewards program covers and see the options for the dates I want to travel. I compare the price in points to the price in cash to see if points are worth using. Usually, they are.

10) Transfer points to travel partners

This process is slightly different for each rewards program but essentially, I log into my online account, find the “redeem rewards” tab, find the hotel or airline I want to use, and transfer however many points I need. With the Ultimate Rewards by Chasse, only points held in a premium card that charges an annual fee (like Chase Ink Preferred) can be transferred to travel partners (hotels and airlines). The good news is that I can collect the points on any Chase card, transfer them to my Ink Preferred card, and then, from there, to travel partners.

The magic of travel hacking is in finding the sweet spots, the sales, promotions, and amazing routes that allow you to maximize your travel while using the minimum number of points.

11) Book travel

All that is left to do is book my hotels and flights with the points I transferred. Hyatt hotel doesn’t charge anything extra, in fact, even resort fees, taxes, and parking are free when I book with points. Airlines charge taxes for award tickets (tickets booked with points). The taxes differ by airline and even by flight, but I usually pay between $10 and $90 per international ticket.

12) Always earn points

Before I meet the minimum spending on one card, I research and apply for the next one, ideally with a referral link from the hubby so he earns a referral bonus. I want to always be working towards some welcome bonus, where the bulk of my points are made. Here’s that link again, on how to start earning bonuses: Make an easy $1100 or How to get started with credit card bonuses.

13) Earn also when you travel

Travel hacking doesn’t stop when you set out on your trip. Before any journey, I make sure I have a point-earning, no-foreign-transaction-fee credit card with me. The Ink Preferred card mentioned above usually does the trick. That way I’m earning some points for every purchase I make.

I also carry a debit card that reimburses me for ATM fees anywhere in the world for those cash-only situations. Credit Karma has a good article on debit cards to use for international travel, I carry the #1 on their list, the Charles Schwab Bank High Yield Investor Checking Account. It’s not really “high yield” since the APY they offer is tiny but they have saved us hundreds of dollars in ATM fees over the years. For a high interest rate, I use a Wealthfront Cash account earning 5.5% APY at the time of writing this. You can read about it in more detail in the September issue of my Mappy Monday Monthly newsletter.

So there you have it. Travel hacking is not simple but with a bit of discipline it’s doable and fun. Most of all, it allows you to have travel experiences that might otherwise be out of your reach.