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Travel hacking has saved me tens of thousands of dollars. Just as importantly, the techniques and strategies you’re about to learn have given my family incredible travel experiences we couldn’t have otherwise afforded.
This guide covers everything you need to know to get started with travel hacking. I’ll even provide examples of actual trips you can book, including airfare and accommodations.
This hobby, which I took up over a decade ago, has brought tremendous joy to my life. My goal with this article is to help you learn how to best use the many travel hacking tools and methods that are available, so that you and your family can enjoy your own incredible experiences and adventures.
Let’s get started!
What Is Travel Hacking?
Travel hacking is a term most often associated with earning and redeeming rewards points and airline miles for free (or nearly free) travel. The fastest and most discussed way of earning points and miles is through credit card rewards.
In its simplest form, there are two steps involved in travel hacking:
- Step #1: Earning rewards points and airline miles (typically through credit card rewards).
- Step #2: Redeeming those points and miles for travel.
Well… yes and no.
There are a lot of finer details involved — details that took me time to learn. These details are why you’ll want to read this entire post.
What to Know Before You Get Started Travel Hacking
Before jumping into earning points and miles, there are some important concepts to know. Understanding these concepts is the difference between saving a few hundred dollars on an upcoming trip and earning one or two free trips per year for the foreseeable future.
Here’s what you need to know…
Tip #1: Travel Hacking Is Never Worth the Cost of High-Interest Credit Card Debt
No credit card rewards are worth the cost of carrying high-interest debt! If you’re currently in debt, stick to cash or debit cards, get your credit score up, and come back when your credit cards are paid off in full.
Tip #2: Start With a Travel Goal
Travel hacking can get complicated. Between award charts, points, airline partners, loyalty programs and more, there’s a lot to learn.
That’s why the simplest thing to do is start with a specific travel goal.
When you have a goal, you only need to learn what’s necessary to get from Point A to Point B.
I’d start by setting a goal of earning enough points to fly somewhere and/or stay at a specific hotel.
Setting a goal that requires both an award redemption for airfare and a hotel stay takes more time and effort on your end. However, as far as being able to do such a thing, know that it is certainly possible.
Tip #3: Done Right, Travel Hacking Should Improve Your Credit Score
Just as no credit card rewards are worth the cost of high-interest debt, no rewards are worth damaging your credit score for. A good rule is to make sure every action you take has a positive long-term impact on your credit score.
Keeping that in mind, it’s important to know the five factors that impact your credit score:
- Payment History (35%) – your record of paying your past/existing debts on time.
- Credit Utilization (30%) – the amount of debt you currently carry as a percentage of your available credit.
- Length of Credit History (15%) – the length of time each account on your credit report has existed.
- New Credit (10%) – the amount of new accounts you’ve opened.
- Types of Credit in Use (10%) – At only 10% of your score, you don’t need to go overboard to try and maximize your types of credit used. However, the credit bureaus do like to see different types of loans on your credit report.
Knowing this, you should have at least a general sense of the types of actions that would be good or bad for your credit score.
Here are some best practices to follow.
- Pay your balance in full using auto-pay. Never miss a payment. Not one. This is Rule #1.
- Aim for low credit utilization. Maxing out all the credit available to you will hurt your credit score. A good rule of thumb is to keep your credit utilization at less than 30%. For example, if you have three credit cards with a combined credit limit of $10,000, you want to keep the balances below $3,000 total.
- Monitor your credit score. You should have an idea of what your credit score is at all times. I use the free app Credit Karma to monitor my score.
- Start slow. Space out new credit card applications so that they’re at least two or three months apart. This will help you avoid a drop in your score resulting from multiple new credit inquiries.
- Start with cards you plan to keep. Make sure the first few cards you plan to apply for are ones you’ll keep long-term. In other words, don’t start with cards that have unsustainably high annual fees, unless you plan to keep those cards in your wallet for a long time. Why? Closing your account will reduce your available credit and lower the average age of your accounts, which are both negative credit score factors.
By following these best practices, not only will you avoid hurting your credit score, you can actually raise it.
Setting a Travel Hacking Goal
Where is it you’d like to visit? What’s on your travel bucket list?
To many people’s surprise, hardly any destinations are out of reach for travel hackers.
Is round-trip airfare for a family of four to Hawaii possible? Yes.
How about a first-class international flight from Chicago to Buenos Aires for two? Yep.
A five-night stay at a five-star hotel? You bet.
Within reason, there’s very little you can’t do with travel hacking. The three examples above are from my own experience.
So, think big. Pick a goal that’s worth your time and effort. One that excites you.
Your goal should fall into one of the three following categories:
If there’s a specific time you’d like to take the trip, such as a honeymoon or during a specific season, include that in your goal.
- Best Tropical Family Vacations From the U.S. w/ Credit Cards Rewards & Points
- Best Family Vacation Ideas & How to Take Them for Free
The Beginners Guide to Earning Points and Miles
Once you have a goal in mind, the next step is earning enough points and miles to make your goal a reality. In the next section (which covers booking your trip), you’ll calculate how many points you need.
While credit card rewards are by far the easiest and best way to earn points and miles, there are many other (and often underrated) strategies for earning points you’ll want to know.
Strategy #1: Credit Card Sign-Up Bonuses
Topping the list of ways to earn points is credit card sign-up bonuses (sometimes called welcome bonuses). There are cards where it’s possible to book an international first-class ticket just by earning the sign-up bonus.
To earn a sign-up bonus, you’ll likely have to spend a certain amount of money on the card within a certain amount of time. For example, you’ll only get the bonus if you spend $3,000 within the first three months. This amount and timeline varies from card to card (see what the best available travel offers are right now).
My own rule of thumb is that either my wife or I are always working towards a sign-up bonus. This means we’re applying for around four cards per year — one business and one personal card each during every 12-month period. This strategy alone is enough to take two trips per year that cost us next to nothing.
Strategy #2: Optimizing Your Spending Through Bonus Categories
My second favorite strategy for earning rewards is through bonus spending categories.
Bonus categories will vary depending on which credit cards you have. One example that’s popular among travel hackers is the Chase Sapphire Reserve, which rewards you with 3X points when you use it for travel and dining.
There are plenty of other good bonus categories, both for personal and business cards. The thing to remember about bonus category spending is that your goal is to find the right mix of cards that optimize the amount of points you can earn based on your unique spending habits.
Strategy #3: Shopping Portals
Many credit card issuers, airlines and hotels have what’s known as a shopping portal. By using the portal, you can earn points at many of your favorite online stores.
As a recent example, British Airways had a limited-time offer that allowed you to earn 12X points at Apple.com. As I was in the market for a new laptop, I purchased the laptop through the British Airways shopping portal, earning enough points to book a one-way domestic first-class flight.
A smart habit is that before you make an online purchase, do a quick search at Cashback Monitor to see if you can earn points from your purchase.
Strategy #4: Traveling
Frequent travelers benefit most from the various loyalty programs offered by different airlines and hotels. For example, if there’s a specific airline you fly for business, you can earn miles every time you fly with that airline. For hotels, you can earn points every time you stay at a specific hotel.
I have friends who travel for work weekly, and they’re able to accumulate hundreds of thousands of points every year this way. For people like myself who typically take just a few trips a year and book them with rewards, there’s limited potential with this strategy.
Other Ways to Earn Points
Credit card sign-up bonuses (also known as welcome bonuses), optimizing your spending with bonus categories, using shopping portals, and traveling are the top ways of earning rewards. However, there are a few other strategies and tips that are vastly underrated that can help you earn points fast.
- Referrals. Many credit card issuers offer points for referring friends and family. Not all cards are eligible, but if a card you have is eligible, then referrals are a great way to earn points fast.
- Business cards. Some of the more lucrative sign-up bonuses available are for business credit cards. Yet many people avoid these cards as they feel they don’t have a “real” business. That’s a mistake because you can qualify for these cards based on running even the smallest of businesses, such as part-time freelancing or occasionally renting out a room on Airbnb. It’s a good idea to separate personal and business expenses as it is, and you can save money by taking advantage of tax breaks.
- Couples can double dip. Whenever there’s a crazy sign-up bonus, my wife and I make sure to both get the card. We did this when Chase Sapphire Reserve was at 100K points (which is now expired) to build up enough points for a trip for our family of four to Hawaii.
- Be strategic with large expenses. Large expenses are a great opportunity to hit a minimum spending requirement. Examples include new appliances, car repairs, and computers. I even put my taxes on my credit card (while the fee is close to 2% I’m confident I can get much more value with rewards).
- Bonus transfers. Credit card rewards programs constantly offer bonuses for transferring points to certain travel partners. Take advantage of those bonus transfers, as they can significantly increase the value of your points. A good tip is to sign up for each airline and hotel loyalty program to stay on top of promotions.
A Step-By-Step Guide to Booking Your First Trip
- You know the mistakes to avoid before getting started.
- You’ve set a travel goal you’re excited about.
- You understand the basics of earning points and miles.
Which means that now you’re ready to learn how to actually book a reward trip!
When I first started booking reward flights, I made mistakes. But these mistakes led me to create a process for each trip I booked — a process that gets me from idea to vacation in the shortest and most efficient way possible.
If you’re looking to book a flight or hotel using rewards, here’s a step-by-step guide to ensure you’re getting the best deal.
Step #1: Research the Amount of Points You’ll Need
The goal of Step #1 is to find out the amount of points and miles you need to book your trip.
I find the best way for someone to learn this is with a real example. For this post, we’re going to see how many points and miles it takes to earn roundtrip airfare from Chicago to Bermuda, as well as a five-night stay at a four-star (or better) hotel.
Researching The Flight
When it comes to airfare, my goal is to find a reasonable flight from Chicago to Bermuda. I plan on flying economy. For first class, a good rule of thumb is to double the number of points needed.
I like to start my search with a visit to AwardHacker, where I can see the different options to get to my destination of choice using rewards.
Using AwardHacker, there are a few things we now know:
- The airlines that have availability from Chicago to Bermuda.
- The reward programs that allow you to transfer points to each of those airlines.
- The price (in points) per round-trip ticket.
See also: The complete AwardHacker user’s guide.
Verifying Your Flight Details
Award search engines are far from perfect. I’ve found that while they usually get the big details right (such as the airlines that have reward availability), they’re often inaccurate when it comes to specific details like the amount of points a particular ticket costs.
That’s why it’s important to verify the information you find on sites like AwardHacker directly with the loyalty program. To do this, simply sign up for each airline’s loyalty program, enter your trip details, and record the information.
In my case, I’ll sign up for the top four:
- Cathay Pacific (CX) Asia Miles
- Japan Airlines (JL) Mileage Bank
- American Airlines (AA) AAdvantage
- Delta Air Lines (DL) SkyMiles
Here’s what you’re looking for when you search for a flight in each loyalty program:
- Are the dates available for your flight? (Some destinations have blackout dates for awards travel.)
- If your travel dates are flexible, is there a better time to fly?
- What’s the total travel time of the flight, the number of stops, etc.?
- How much will that flight cost in points?
- What are the total fees involved?
All airline loyalty programs are free to join. So this process is simply a matter of signing up for the top three to five loyalty programs you found via AwardHacker to confirm the details.
Tip: Make sure you’re selecting the option to pay with rewards or miles:
Repeat the Process For Hotels
If I was looking to book a flight only, I’d move on to Step #2. But since I’m also looking to book a hotel with points, I need to find a place to stay.
To do that, I’ll start my search at Hotel Hustle.
Just as AwardHacker allows you to search for award flight availability, Hotel Hustle allows you to search for hotel availability.
And when I search for award availability in Bermuda, here’s what I get:
Hotel Hustle searches the Comfort Inn, Hilton, Hyatt, IHG, Marriott, Radisson and Wyndham rewards programs. So, those programs are out.
Fortunately, there are other options.
One is to see if I can find a hotel directly through a credit card company’s travel portal. The downside here is that you must already have a credit card open.
As an American Express cardholder, here’s an option I get when I search for Bermuda hotels through travel.americanexpress.com.
As a Chase cardholder, here’s what I get when I search for award availability through Chase Ultimate Rewards.
For 13,203 points per night (or 66,015 points total), I can stay at the Cambridge Beaches Resort & Spa. A quick look at TripAdvisor shows the hotel has some great reviews, so this looks like a winner.
But remember… for the purposes of this lesson, we don’t actually have the points yet. So, we must figure out if it’s possible to earn enough points to book both the flight and hotel.
Step #2: Earning the Points
The goal of Step #1 was to figure out:
- Options for traveling from Chicago to Bermuda, including the airline and the amount of points it will take.
- Options for where to stay, including how many points the stay will cost.
Now we’ll find the best way to earn the points necessary to book the trip.
Let’s start with booking the flight.
Picking the Best Travel Rewards Card For Your Flight
By logging into each airline’s loyalty program, I know the exact amount of points I will need to book my airfare. I can then search the current top travel rewards cards on the market with this in mind.
To give you an idea of what you’re looking for, I’ll take you through a few options on the list.
Option #1: Cathay Pacific
AsiaMiles, the reward program by Cathay Pacific Airlines, offers flights from Chicago to Bermuda for as little as 20,000 points. Although you book through AsiaMiles, the flights are operated by American Airlines. This is made possible by the fact that both companies are part of OneWorld, an alliance between multiple airlines.
Airline alliances like OneWorld allow you to book a rewards flight on partner airlines within their network. Other popular airline alliances are OneWorld, Star Alliance, and SkyTeam.
After logging into AsiaMiles and looking for award availability, I tested multiple dates and each time found that there was no award availability. So, what first looked promising is no longer an option.
Option #2: JAL Mileage Bank
At 23K points for one round-trip ticket, Japanese Airlines is another low-cost option. After some research, I found that there’s a JAL Mileage Bank Credit Card — but the sign-up bonus is low.
Under transfer partners, I see that MB (which stands for Marriott Bonvoy) is a transfer partner to JAL Mileage Bank. Points transfer from Marriott Bonvoy at a 1:3 ratio. So, to book two tickets, I’d need 46,000 points inside of my JAL account, which is a total of 138,000 MB points.
A quick look at the top hotel credit cards shows that the best welcome offer does not provide enough points to get two tickets.
Option #3: American Airlines
With American Airlines, I can book award flights for 25K points round-trip.
Searching the top airline rewards cards, I see there’s a good sign-up bonus available right now through Citi to earn AAdvantage points with a business card.
Knowing this, I head over to AAdvantage to see what my options are for booking the flight. Scanning my options it looks like the lowest cost option is 30K points round trip (or 60K for two), including $260.94 cents in fees.
When I then take a look at the top airline credit cards available, I’m hoping to find a sign-up bonus that will earn me enough or very close to 60K points. There are a few great options, which is a good sign for my chances of booking the trip!
Note: Sign-up bonus offers change constantly. To avoid confusing readers, I’ve left out specific examples of current offers that tend to change frequently.
Option #4: Delta
Knowing I have one decent option available, I can now compare how Delta stacks up. And just like American Airlines, Delta has some quality sign-up bonuses currently available. At 30,000 points for a round-trip ticket, I’m looking for a credit card that has a sign-up bonus above or near 60,000 total miles.
One thing that caught my eye when I was scanning the “Transferable From” column inside of AwardHacker was that MR is a transfer partner of Delta Airlines. In award terms, MR stands for American Express Membership Rewards.
With a bit of Googling, I learn that I can transfer American Express Membership Reward points to Delta at a 1:1 ratio. So, not only should I look for the best welcome bonuses for Delta co-branded airline cards, but it’s worthwhile to see if it’s easier to earn 60,000 American Express Membership Reward points vs. 60,000 miles with Delta.
Looking at the available American Express cards, it seems like there are some good welcome bonuses available right now above 60,000 miles.
Choosing the Right Card For Your Flight
In this example, choosing which credit card to go with depends largely on my situation. The co-branded Delta and American Airlines cards have some great sign-up bonuses that would allow me to earn enough points for a flight. In addition, American Express has cards that would allow me to earn the miles, then transfer those miles to Delta to book the flight.
One rule of thumb I stick to is to always do what’s best for my long-term credit.
I could see myself holding on to a few of the American Express cards available right now. Plus, American Express Membership Reward points can be transferred to a number of airlines, so there’s a lot of flexibility down the road.
On the other hand, I’m not sure about the long-term value of holding on to a Delta card, as I rarely fly Delta. If I held on to the card long-term, I’d continue to earn points with only Delta’s SkyMiles loyalty program. That would limit my options in the future.
Another option, which makes sense for those who fly American Airlines (or another airline with a hub in your city), is the Citi AAdvantage card. With the first checked bag free for you and up to four people, the annual fee can certainly pay for itself if you’re a frequent flyer on American (which I happen to be, as it’s the airline I take most frequently to visit my out-of-state family).
In theory, after all of this research, I’d apply for the card that’s ideal for me and reach the minimum spending requirement. Once I have enough points in my account, I’ll transfer the points (if necessary), and go ahead and book the rewards.
Step #3: Booking Your Hotel
Bermuda is small. As such, there are not a lot of options when it comes to hotels. As we found out through Hotel Hustle, the big hotel loyalty programs don’t have any hotels in Bermuda.
But for most destinations, Hotel Hustle will provide award availability for a number of hotels. So if something did pop up on the search, I’d repeat the process I conducted to find flights: sign up for the free hotel loyalty programs and confirm the details.
Another option is to book hotels right through the credit card travel portal.
When doing my search, I found that the Chase Ultimate Rewards travel portal offered the best deal: for 13,203 points per night (or 66,015 points total), I can stay at the Cambridge Beaches Resort & Spa.
I’m seeing this offer only because I have the Chase Sapphire Reserve card, which allows me to redeem points for 1.5 cents each towards the cost of travel.
With other popular Chase cards, like the Chase Sapphire Preferred and the Ink Business Preferred, you’d only be able to redeem points for 1.25 cents towards the cost of travel. As such, this award would be closer to 16,000 points per night or around 80,000 total points.
As we learned from booking our flight, not all programs offer big sign-up bonuses. The next step then is reviewing the top offers available from Chase.
What we’re looking for is:
- Welcome bonuses that would allow us to reach 80,000 points (or 66,015 points if booking with the Chase Sapphire Reserve).
- The minimum spending requirements to earn those bonus points.
- Whether or not those minimum spending requirements fit within our budget.
Scanning the best Chase offers available, it looks like we have a few options:
- The Chase Business Ink Preferred offers a 100K welcome bonus after spending $15,000 in the first three months. (Points are redeemed at 1.25 each, so 80K points are needed).
- The Chase Sapphire Preferred offers a 60K welcome bonus after spending $4,000 in the first three months. (Points are redeemed at 1.25 each, so 80K points are needed).
- Then, there’s the Chase Sapphire Reserve, which has a 50,000 point sign-up bonus after spending $4,000 in the first three months. (Points can be redeemed for 1.5 each, so 66,015 points are needed.)
Now it comes down to finding the best strategy for you to earn the points:
- With the Chase Business Ink Preferred card and its 100K welcome bonus, you could earn enough to book the trip with just the welcome bonus. However, this only makes sense for those who would have $15,000 in business expenses over the next three months.
- The Chase Sapphire Preferred, with its 60K welcome bonus, is another option. Although, it leaves you 20,000 points short of booking the trip. The card earns 2X points on travel and dining, and one point on everything else. If you used this as your primary card, with your current spending habits and time available, could you accrue that extra 20,000 points?
- The Chase Sapphire Reserve has a smaller sign-up bonus, but you only need 66,015 points to book the hotel. There’s also a $550 annual fee (and a $300 travel credit). As it earns 3X points on travel and dining, you’d then need to earn an extra 16,015 points with this card.
A few additional strategies to consider:
- Chase allows you to pay in points plus cash. So, say you’d be able to get pretty close to 80,000 points — you can make up for the rest in cash.
- You can combine points between different Chase accounts you have, as well as with one individual in your household. This means that your spouse could get a card like the Chase Freedom Unlimited, which carries a $200 bonus after spending $500 in the first three months (which is 20,000 points). Once the bonus is earned, you can transfer the points to your other account.
As I’m a business owner, I decide to go with the Ink Business Preferred card. It’s a great fit for me as I can earn 3X points on up to $150,000 of spending on travel and in select business categories per account anniversary year.
The thing to realize here is that there’s no single best card for everyone. Do your research and find the card that fits your particular situation.
Additional Resource: Chase Sapphire Reserve vs. Preferred – Which Travel Credit Card Is Right for You?
Step #4: Hitting The Minimum Spend
- I set my goal of going to Bermuda for a five-night stay, using points to pay for both airfare and a hotel.
- I found the airline where I could book my flight, then applied for a credit card that allowed me to earn enough points.
- I found a hotel in Bermuda to stay at, then applied for a credit card that allowed me to earn enough points.
Unfortunately, when you apply for the card, the points don’t automatically hit your account. There’s typically a minimum spending amount you need to reach in order to earn the advertised bonus.
As most welcome bonuses typically require a minimum spend, it’s important to plan this aspect out. Depending on where I’m at with my business and personal expenses, it may make sense to space out these credit card applications.
Ideally, I’d hit these bonuses without impacting my budget. Remember Rule #1: always pay your balance in full. If you can’t follow this rule because you don’t have the cash on hand to pay off the amount you charge to your card, then don’t apply for these cards in the first place. It’s never worth upending your personal finance situation to score free travel.
Once I do reach the minimum spend, the points still take some time to hit my account. Typically, it’s when the next billing cycle occurs. Once they appear, I can finally go ahead and book my flight and hotel rooms.
Key Takeaways of Booking an Award Trip
This example may seem complex. However, when it comes to booking reward travel, this is pretty much what to expect.
For now, here are the key takeaways:
- Plan ahead. Don’t expect to take your first award trip in a matter of weeks. You should expect the process to take at least six months from the day you apply for a card.
- Think long-term. If you’re just starting out, don’t destroy your credit. Having an excellent credit score turns reward travel into a long-term hobby rather than a one-time experience. Two common mistakes that could hurt your credit score are (1) applying for a card where the minimum spend exceeds your budget, and (2) applying for too many cards at one time.
- Always verify the trip details. Award search engines like AwardHacker and HotelHustle are a great place to start, but they are not always 100% accurate. Always make sure to check directly with the travel program for up-to-the-minute offers.
The Best Travel Credit Cards for Beginners
Choosing the right credit card can be a daunting task for a beginner. To make things easier, below are my favorite cards I recommend to new travel hackers.
Not only do these cards have solid sign-up bonuses, they offer flexible options for redeeming your rewards. This is handy in case you’re not 100% sure of how you plan to use your points. In addition, these cards are ones that you’d likely hang on to for the long-term.
Chase Sapphire Preferred Credit Card
The Chase Sapphire Preferred card is my top choice for beginners.
Chase Ultimate Reward points are very flexible and can be transferred to many airlines and hotel programs. So, while this can help you achieve your short-term travel goals, it’s also a great card to have over the long-term.
The current sign-up bonus is enough to book two domestic round-trip tickets or one international flight.
For those who already have a Chase credit card, like the Freedom Unlimited (read my review), Chase’s Ultimate Rewards points can be combined. This is true for both you and one member of your household.
One last reason I like this card for beginners is that Chase has what’s known as the 5/24 rule. This says that if you’ve opened five or more credit card accounts in the past 24 months, you won’t be approved for a new Chase card. This means you’re more likely to qualify, all other things being equal (as you won’t have other new accounts on your credit report).
While this is a fairly strict rule with Chase, many other credit card companies have no such rule. Although, depending on the company, your chances of approval may decline with that many new inquiries.
Chase Sapphire Reserve Credit Card
Take what’s to like about the Chase Sapphire Preferred, add a few benefits, and you get the Chase Sapphire Reserve.
These extra benefits include:
- $300 in statement credits for travel purchases charged to the Chase Sapphire Reserve each account anniversary.
- Earn 3X points on travel and dining purchases.
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards (the Preferred card allows you to redeem points for 25% more value).
The big downside to the Chase Sapphire Reserve is the $550 annual fee. With $300 in travel credits, you can say that fee is more like $250. Nonetheless, you’re paying this fee upfront, so it may impact your cash flow.
The card also requires an excellent credit rating, according to CardRatings.
Chase Ink Business Preferred Credit Card
If you run a business, you can apply for the Chase Ink Preferred Business card. This card currently has one of the best sign-up bonuses available.
To apply for a business card, you only need to have any source of income outside of your salary. This can mean anything from freelancing to running a blog (as long as it makes money) to renting out a room on Airbnb.
Also, a business tax ID is not required. You can use your social security number to apply.
Business cards tend to have a higher minimum spending requirement, as is the case with the Chase Ink Business Preferred credit card.
As such, some planning may be necessary in order to hit the minimum requirement without busting your budget.
One tip is to know what is and is not a business expense. To many people’s surprise, expenses often considered personal are deductible when running a business. For example, if you sell on eBay, buying a new computer may count as a business expense.
Capital One Venture Rewards Credit Card
What I like about the Venture Rewards card from Capital One is the flexibility in rewards.
Capital One has both a fixed-value reward program and the ability to transfer to a growing number of partners.
A fixed-value reward program allows you to essentially erase a travel charge from your credit card statement. Points are worth one cent each, so $500 in travel expenses can be erased with 50,000 points.
This makes the rewards extremely flexible, as you can use your points on travel purchases such as an Airbnb, car rental, or even Disney tickets (if purchased through a provider like UnderCover Tourist that codes its transaction as travel).
Credit Card Reward Programs 101
When it comes to earning points with credit cards, you have the option of earning through a co-branded airline or hotel credit card. Or, you can earn points directly through credit card reward programs.
For example, the Chase Sapphire Preferred card earns Chase Ultimate Reward points. When you earn the sign-up bonus or spend money, you earn points within Chase’s Ultimate Rewards program. Points can be transferred to travel partners, or you can use your points to book travel directly through Chase.
In comparison, there are co-branded airline and hotel cards where, when you make a purchase or earn a sign-up bonus, the points go directly to your airline or hotel account.
Points earned within airline and hotel loyalty programs have far fewer options, and therefore it makes sense to prioritize flexible reward programs.
The five major flexible reward programs are:
- Chase Ultimate Rewards
- American Express Membership Rewards
- Capital One Rewards
- Marriott Bonvoy
- Citi Thank You Points
Knowing the ins and outs of each program can help you best maximize your reward redemptions.
Here’s a rundown of each.
Chase Ultimate Rewards
Current airline partners include:
- Aer Lingus AerClub
- British Airways Executive Club
- Emirates Skywards
- Flying Blue
- Iberia Plus
- Singapore Airlines KrisFlyer
- Southwest Airlines Rapid Rewards
- United MileagePlus
- Virgin Atlantic Flying Club
Current hotel partners include:
- IHG Rewards Club
- Marriott Rewards
- World of Hyatt
This array of transfer partners covers just about every travel goal.
Beyond transferring to partners, you can book travel through the Chase Travel portal.
With the Sapphire Preferred or Ink Business Preferred, points are worth 1.25 cents each when booking travel through the portal. With the Chase Sapphire Reserve, however, points are worth 1.5 cents each.
This may not sound like much, but there are a few situations in which this comes in handy:
- When there’s tight award space. Award space on flights and at hotels during peak season can be hard to find, because companies typically only offer a small portion of their available inventory to awards bookings. By booking through Chase, you open up more options.
- When you need access to a greater number of hotels. Not every hotel has a loyalty program. The Chase travel portal offers many independently-operated or smaller hotel chains.
- When you want to pay with points and cash. Just want to use some, but not all, of your points? You can decide how many points you want to pay with, then pay the rest of your balance with cash.
Other benefits of earning Chase Ultimate Rewards points:
- You can transfer points between different Chase cards you personally have (e.g., from the Chase Freedom to the Sapphire Reserve).
- You can transfer points between personal and business accounts (e.g., from Chase Ink Business Preferred to the Sapphire Reserve).
- You can transfer points from one account within your household (e.g., from one spouse’s Chase Freedom to the other spouse’s Chase Sapphire Reserve).
If you make earning Chase Ultimate Rewards points your top priority, you won’t regret it. The rewards are extremely easy to use and very flexible.
As for the best way to earn Chase Ultimate Rewards points, there are a few credit cards to check out:
American Express Membership Rewards
With 19 airline programs and two travel hotel programs, American Express Membership Rewards gives travel hackers great flexibility.
While American Express offers a travel portal like Chase, high-value redemptions are harder to find. As such, your best option is transferring points to one of the programs above. Make sure to read the fine print. Not all partners are a straight 1:1 transfer — some are more and some are less.
One nice thing about American Express is that they have a fair amount of quality welcome bonuses available.
Other things to know about American Express Membership Rewards:
- There’s a once-in-a-lifetime welcome bonus for each card (as opposed to cards from other issuers, which often allow you to close an account and then reapply down the road).
- All your points will be combined into a single account. However, you cannot transfer points between credit card accounts in the same household (as you can with Chase).
- American Express has multiple high-value welcome offers available right now. Moreso, some cards can earn up to 5X points per dollar spent in certain categories.
Citi ThankYou Rewards
While not as popular as Chase and American Express, Citi ThankYou points are a valuable transferable currency.
Citi’s travel partners include:
- Air France
- Asia Miles
- Avianca LifeMiles
- Etihad Guest
- EVA Air
- Garuda Indonesia
- Malaysia Airlines
- Singapore Airlines
- Thai Airways
- Turkish Airlines
- Virgin Atlantic
To be eligible to transfer points, you must hold the Citi Prestige or Citi ThankYou Premier credit card.
Citi also has a travel portal that works similar to Chase’s.
Other things to know about Citi ThankYou points:
- You can combine points from lower-tier cards to higher-tier cards like the Premier or Prestige.
- Sign-up bonuses tend to come and go with Citi, so make sure to periodically compare the latest offers.
- Citi has consistent bonus promotions for transferring points to certain travel partners.
Overall, Citi ThankYou points have a reputation for being a bit harder to find a great deal with. As such, there are a few options on Citi I will highlight:
- Singapore KrisFlyer, a member of the Star Alliance Network, allows you to book flights on United from the U.S. to Hawaii cheaper than going through United.
- Using Etihad miles, you can sometimes book flights on American Airlines at a lower rate than by going through AAdvantage directly.
- Virgin Atlantic is a good program for those who travel a lot inside the U.S., as the airline offers a good number of short-haul domestic flights.
While technically a co-branded card, the Marriott Bonvoy Boundless does allow you to transfer points outside the program to a large network of airline partners. However, Marriott points typically transfer at a 3:1 ratio. Therefore, it’s not my favorite way to earn rewards, although it can come in handy when you need a few extra points on a hard-to-earn airline.
The best value for Marriott rewards is typically with hotel stays.
Two ways I’ve found to get the most value for your Marriott rewards include:
- Lower-end Marriott hotels are decent places to stay and can be booked for as little as 5,000 points per night.
- On the other end of the spectrum, higher-end hotels can also offer some great deals. Off-season pricing for a Category 7 — which includes resorts from the program’s luxury brands like St. Regis and The Ritz Carlton — is currently 50,000 points per night.
As we touched upon earlier, Capital One has a very flexible reward program with a solid network of transfer partners and the ability to erase travel purchases with points.
A few scenarios where fixed-value rewards come in handy:
- You’re able to get a great deal on either a flight or a hotel by going through a site like Hotwire, Orbitz or Priceline.
- You like to stay in Airbnbs, VRBOs, or smaller hotels that have a rewards program.
- For other miscellaneous travel purchases like airline fees, hotel fees, Uber and Lyft rides, and theme park tickets (in some cases).
One thing I really like about Capital One is that they frequently offer bonuses for transferring your points to a certain airline. This is a great feature when you plan your travel far in advance, because when a bonus comes up, you can transfer your points and therefore reduce the total amount of needed to book your trip.
Travel Hacking FAQs
Here are a few common questions about travel hacking.
Travel isn’t the only option for redeeming rewards. Other options include cash-back, statement credit, and gift cards. Some reward programs allow you to buy an actual product like a TV or camera.
With the above options, points are worth about one cent. For example, 10,000 points are worth $100 in statement credit. When redeeming points for travel, you can get upwards of three to five cents of value per point. It’s not unheard of to book awards at seven to 10 cents of value per point.
One of my favorite redemptions was a first-class flight from Chicago to Buenos Aires for 50,000 Avios points on American Airlines. That flight would have cost me well over $5,000.
Say you earn two points for every dollar you spend. Redeeming those points at a value of seven cents per point is like earning 14% back on your spending. That means that in most cases, travel rewards are the better option.
New cardmembers are a very valuable thing for a credit card company to have. Every time you make a purchase, credit card companies earn money by charging the merchant a small fee. Considering that you may make tens of thousands of dollars of purchases on a new card, the bonus or the cash-back the company pays you for signing up for a card will pale in comparison to the amount of money they end up making from those swipes and dips.
Then there are the interest charges. While YOU are not going to break Rule #1 (always pay your balance in full!), most people carry a balance. This is the primary revenue driver for credit card companies.
My go-to strategy here would be using shopping portals with a debit card. Most of us make multiple large purchases every year, whether that’s for a new appliance, technology, or furniture. If you’re patient and wait for a time when an airline or hotel shopping portal offers additional cash-back, you can jump on it and earn a solid return.
There are certain limited-time offers, as shown in the Apple.com example above, that can net you above 10% cash-back.
Some airline loyalty programs have what’s known as a distance-based award chart, with the two most popular being British Airways Avios program and Virgin Atlantic (which is a hybrid). As such, there are cases where you can book short-haul flights for a surprisingly low number of points. For example, say I wanted to take a weekend trip from Chicago to Nashville. In this scenario, I could book an award for as little as 15,000 points round trip.
The cost of earning points and miles is that they come at the expense of earning cash-back, either in the form of statement credit or an actual check. The best cash-back/rewards credit cards allow you to earn around 2% cash-back.
Therefore, let’s say the cost of using your credit card rewards for travel is 2% of your expenses.
Miles and points, on the other hand, are not as easy to value as cash.
However, let’s say you were to earn on average two points for every dollar you spend. If you can redeem those points at a value above two cents, your points have more value than cash.
Travel Hacking Summary
Travel hacking is a skill. And just like any skill, it takes practice to improve at it.
But is it a skill worth learning? In my opinion, YES!
The key is to move one step at a time.
These steps are:
- Picking a travel goal that gets you excited — don’t be afraid to aim for your dream trip.
- Finding the best way to earn enough points to book that trip.
- Earning the points and airline/frequent flyer miles.
- Booking the trip within the first year.
Your first reward trip will be a memorable one, and if you’re anything like me, it will open up a world of free travel opportunities