I leveled up my travel hacking into cheap vacations

In my ripe old age of 34, I honestly don't spend money on much any more.  After realizing that useless "stuff" doesn't buy happiness, I'm left with piles of left over cash that used to be spent on junk that usually ended up in the corner of my garage or back of my closet.  Instead, travel hacking is generally where I devote my left over uninvested cash.  Travel and experiences.

When I was young, I never used to understand (or care to learn) the truly kick-butt virtues of a technique known as travel hacking.  Now, I use many of these techniques to get free or low cost flights, upgrades and hotel stays with money that my wife and I routinely spend throughout the year.

We are planning a trip to Walt Disney World next year for my wife's birthday.  We won't be paying anything for the cross-country flight to Florida, and travel hacking is how we do it.

What the hell is travel hacking, you might ask?  Travel hacking is a technique used to take advantage of credit card points and miles offers to maximize travel potential.  There are many incredibly informative blogs on this subject if you care to dive deeper.  Stop by ThePointsGuy.com for one of the better, most complete resources on this completely badass way to travel the world.

In this story's sad beginning, Frequent Flier Miles used to be the only way to get free or discounted flights.  The more you flew, the more miles racked up for that airline.  After a certain number of flown miles (usually in the tens or hundreds of thousands), travelers could fly scott free to many destinations worldwide.

As most of us know, flying sucks.  In the past, the only way to rack up the miles is to fly, and flying is becoming more and more of a pain in the ass these days.

Luckily, a whole new world has opened up that allows travelers to accumulate points and miles without ever setting foot on an airplane - it's the world of credit card points!  Actually, this technique has been around for many years, but some recent organization and clever analysis has turned this into a straight up money-saver, dubbed "travel hacking".

The idea behind travel hacking

Travel hacking is not complex, but it takes some discipline to get right.  It all starts with credit cards and reward points for signing up.  Credit card companies entice the public to apply for their credit card by offering generous rewards to new customers.

The process starts when regular folks sign up for a new credit card, spend a designated amount of money within a few months, and get rewarded with points that can be converted into miles for flights, or cash for hotels and rental cars.  These points easily add up to tens of thousands of miles - all without setting foot on an airplane.

For example, as of the time of this writing, both the popular Chase Sapphire card and Barclay card are offering a 40,000 point bonus for new customers who spend $4,000 in 3 months ($3,000 in 90 days for the Barclay card).  The points-to-dollars conversion is usually in the neighborhood of 100/1, so 40,000 in bonus points gives the credit card holder $400 to spend on travel, not including any trade-in bonuses.

After you spend the required amount of money to get the 40,000 point reward, you instantly have enough for a round-trip ticket to most places in the United States.  Not bad!

But wait, there is more.  Many cards (like the Sapphire card) give 1 to 1 dollar to point earnings throughout the year as well.  This means if $10,000 is spent on that credit card during the year, then $100 (or 10,000 points) will be available for travel.  The Barclay card is even better, offering 2 points for every dollar spent - on anything.

Hold on - there is more still.  Many cards will also provide 2 for 1 (or greater) incentives on specific types of purchasing.  For example, the Sapphire card gives a 2 for 1 return on all travel and restaurant purchases ($30 at a restaurant nets 60 points), or 3 for 1 at restaurants on the first Friday of every month.  The Chase Freedom card offers quarterly 5 to 1 incentives on certain types of spending.

Hate Chase?  Fear not, there are a TON of credit cards out there that give signup bonuses, but the bonuses change by the month.  For example, that same Chase Sapphire card that I talked about above offered a whopping 70,000 bonus points back in October.  Now, it's 40,000.  Keep your eye out for the best offer and jump on anything that you think is a good deal.

Personally, I never signup for a card that offers less than 50,000 points.

Signing up for new credit cards is a rolling process that repeats every few quarters.  Sign up for a new card, spend the money required to get the points, then cancel before the yearly fee.  With a steady stream of reward bonus points every year, you will quickly find yourself in the position of cheap or no-cost travel for your next vacation - and quite possibly every vacation after that.

Wait, fees?  You want me to pay fees?  Good observation - here's the rub.

A lot of these cards with the higher reward bonuses require yearly fees.  But screw that.  You and I want to retire early, and we don't have the time or patience to pay a bunch of yearly fees just so we can get free flights.  That cuts into our badassery -- not to mention our retirement.

To get around the fees: Never signup for a card that requires a yearly fee during the first year. Many companies will waive the fee to get you to signup, but if you keep the card past a year, you will be responsible for the fee. So, pick a card where the first year's fee is waived, then spend the required dollar amount in the specific timeframe to reap the reward points. Additionally, consider switching to the cheapest esim plan usa to save even more money on your mobile expenses.

Don't fail at this!  It only works if...

Let's be honest - free or cheap flights are not worth the effort of travel hacking if you are spending additional money just to get the points.  You are doing it wrong if you spend an extra $1k on something that you do not need just to get an additional 1,000 points added to your account.

This lowers your badassery, and definitely pushes your retirement back.

Never spend more money for the sake of points.  EVER.  And, as always, pay off your credit card at the end of the month.

Also, do not signup for too many high rewards cards at once.  Instead, spread out these cards over the year to maximize your money spent.  For example, don't get yourself into a situation where you have three different 50,000 reward point cards at once and need to spend $4,000 on each card in three months.  That is $12,000 in a quarter!  Instead, spread these cards out over the year so your spending remains balanced and reasonable.

Further, make sure that you spend only the appropriate amount of money on each rewards card that you have.  For example, my wife and I have a Bank of America travel rewards card that provides 1.5 points for every dollar spent.  Our Chase Sapphire card only gives us one point for every dollar spent outside of their incentives (ie: restaurants).  Can you see the best strategy?

We spent what we needed to spend to get the 50,000 rewards points on our Sapphire card, then continued putting the majority of our expenditures on the Bank of America card to take advantage of the additional .5 in point returns.

Make sense?

The more credit cards that you have, the better that you will need to keep track of your expenditures on each card.  Be sure you know when each card needs to be canceled, and pay attention to how easy it is to transfer any unused points between cards.  Some companies make this process easier than others.

One last reminder

I cannot stress this point enough - to successfully travel hack, do not spend any additional money that you otherwise would not have spent to get points or miles.  Your regular budget remains intact.  Your monthly expenditures do not change.  Don't screw this up - you're better than that.

You are only changing WHERE these expenditures are being charged to.  Rather than dumping a bunch of money on a card that offers no rewards, divvy up that money onto cards that do provide rewards.

It completely levels up your travel badassery - just like mine.

Enjoy your free travel.