Travel hacking is a unique hobby where people use credit card rewards, frequent flier programs and other travel loyalty programs to travel for free or as cheaply as possible.
Some people prefer to get as much value as possible from travel hacking. Others aim to get access to luxurious travel experiences they would not otherwise be able to afford.
Either way, traveling for free is possible with a bit of careful planning. It may seem too good to be true, but it’s not. My family has used credit card rewards to get free flights, hotel stays and cruises on more than one occasion.
I’d say we’ve easily earned over $10,000 worth of credit card rewards and free travel since we got started a few years ago. Here’s what you need to know if you want to start travel hacking as a beginner that has no experience at all.
How to Get Started with Travel Hacking Today
If you’re ready to get started travel hacking, here’s a quick step-by-step guide to help you along the way.
Step 1 – Decide What You Want to Travel Hack
Do you want a free trip to the beach? Or maybe a free trip to Europe? No matter what travel you want to get for free, decide what you want your trip to look like.
Then, plan out the costs for that trip. This allows you to identify what types of credit cards and rewards you need to lower the cost of your trip.
Step 2 – Plan Out What Cards to Apply For
After you’ve determined your trip costs, you need to work on reducing those costs.
If a flight is part of your trip, look for a travel or airline credit card that can help you get the flight for free. If you’ll need to stay in a hotel, look for a travel or hotel credit card that can offset your hotel costs.
Then, see if there are other costs you still need to cover. A cash back card could help with these other costs.
I keep an up to date list of some of the best credit card sign-up bonuses available each month to help people figure out what credit cards might be worth applying for. Check it out if you’re looking for cards to help you travel for free.
Step 3 – Map Out Your Credit Card Applications
Once you know which cards can help you get your travel for free, it’s time to figure out when to apply. You’ll want to make sure your spending can meet the sign-up bonus requirements.
This may require you to apply around the time your six-month auto insurance bill or another large bill is due if you don’t have a ton of expenses to put on a credit card. Mapping out your applications to match your anticipated spending helps to make sure you don’t overspend.
Step 4 – Start Applying and Earning Points
Once you have a plan, it’s time to put that plan into action. Apply for the cards, earn the bonuses and accumulate the points you need to travel for free.
Step 5 – Book the Trip and Enjoy
After you’ve accumulated the points you need, you can start booking parts of your trip for free. When the time eventually comes to depart on your trip, you’ll have the satisfaction of knowing you travel hacked your way to a much cheaper or free vacation.
Credit Card Rewards Are The Key
The key to most travel hackers’ strategies is credit cards. While you don’t technically have to use credit card rewards to travel hack, they speed up the process immensely. There are a variety of types of credit card rewards travel hackers use to travel cheaply or for free.
Some credit cards are generic and let you use points for cash back or travel. Other credit cards work with the loyalty programs of specific brands to allow you to earn airline miles or hotel points for that brand.
Cash Back Rewards
Some credit cards only allow you to earn cash back. These cards may not have the ability to earn outsized value, but the flexibility cash back offers is immense. You could use cash back to pay for literally anything.
One good example of this type of card is the Citi Double Cash credit card. It gives you 1% cash back on all purchases and an additional 1% cash back when you pay for those purchases.
Once you have enough cash back built up, you can redeem it for a statement credit, a check in the mail or a direct deposit to your bank account. Recently, Citi added the option to convert your cash back to ThankYou points which make the rewards even more flexible.
Hotel Rewards
Hotel rewards credit cards are usually pretty easy to understand. When you make purchases with your card, you typically earn points for that hotel’s loyalty rewards program.
For instance, if you have an IHG branded credit card, you’ll earn IHG rewards points when you make purchases with that card. You can then use those points to book free hotel stays at the chain’s hotels.
Airline Rewards
Airline credit cards, like the Southwest Rapid Rewards cards, work similar to hotel cards but you earn airline loyalty points or miles with the branded airline.
Once you earn enough miles, you can use them to book free flights. You may still have to pay taxes and fees when you book your free flights, though.
Flexible Credit Card Rewards
Cards like Chase Sapphire Preferred give you many options to use the points you earn. This particular card allows you to redeem your points for cash back, shopping at Amazon.com or Apple.com, gift cards, merchandise, travel or to transfer points to several partner travel loyalty programs such as Southwest’s Rapid Rewards program.
These cards are more complex because different redemption options result in different values for the points you redeem. Cash back is worth a penny per point, but booking travel through the Chase Ultimate Rewards portal values your points at 1.25 cents each.
Other flexible credit cards focus on travel. The Capital One Venture allows you to redeem miles for travel statement credits at a value of a penny each. However, the miles are only worth 0.5 cents each if you redeem your miles for non-travel purchases.
Sign-Up Bonuses Make It Easier to Earn Rewards Faster
Most credit cards offer one to five points per dollar spent on purchases. It would take quite a while to earn enough points at this rate. Thankfully, credit card sign-up bonuses give you a way to accelerate the process of earning points.
Credit card companies offer sign-up bonuses to entice new customers to sign up for their credit cards. These bonuses require you to make a single purchase or a certain dollar amount of purchases within the first few months of getting the card to earn the bonus.
These bonuses could be as small as $50 or be worth as much as $1,000. Generally, the larger the bonus is the more money you have to spend to earn it.
As long as you pay your credit card balance off in full each month and you don’t spend more than usual to reach these spending requirements, credit card sign-up bonuses can be very lucrative. They can also speed up your travel hacking plans immensely.
How Do You Know How Much Credit Card Rewards Are Worth?
Valuing credit card rewards can be tricky. Some programs have points worth more than a cent each while others have points worth much less than a cent each.
To get an idea of the value of the rewards you’ll earn, I suggest checking out a points value list like this one offered by The Points Guy or U.S. News and World Report.
Of course, the actual value of your points will depend on your particular redemptions. If you’re considering redeeming points for less than these values, you might be better off paying with cash and saving your points for better redemption options.
Do You Have to Sign Up For Loyalty Programs Before Applying for a Card?
When travel hacking, you’ll need to learn how each travel loyalty program works before you get started. Doing so allows you to make sure you understand the value of the points you earn and how the programs work. This includes learning whether points expire as well as how you can earn and redeem your points.
Some programs may work better if you sign up for a loyalty account before you sign up for a credit card. Then, you can input your loyalty number on the credit card application. Other programs may automatically assign you a loyalty account when you sign up for their associated credit card assuming you don’t already have one.
Don’t let this aspect slow you down from getting started. You can almost always call the credit card company after you apply for your card and update your associated loyalty program number.
An Example of a Free Flight
I’ve used my credit card rewards to get a free flight for my brother on Southwest Airlines from Los Angeles, California to Panama City Beach, Florida.
I had originally signed up for the Chase Sapphire Preferred credit card and spent the necessary money to earn the sign-up bonus. Once I earned the bonus, I had over 50,000 Ultimate Rewards points sitting in my account with no plans to use them.
Once I knew my brother needed a flight home to visit family, I used the Chase Sapphire Preferred’s ability to transfer points to partner loyalty programs.
After logging in to my Chase account, I clicked the option to transfer points. I transferred enough points from my Chase Sapphire Preferred card to my Southwest Rapid Rewards account. Once the points moved, I used them to book a flight in my brother’s name.
An Example of a Free Cruise
My family has taken many cruises for free using credit card rewards. Each cruise has different costs and credit card bonuses change over time. Rather than give a specific example that is dated, here’s how I’d go about earning $1,500 in credit card rewards to pay for a cruise today.
First, I’d apply for a common travel credit card. This card offers 50,000 bonus miles for spending $3,000 on purchases in the first three months of card membership. Each dollar spent earns two miles, so we’d end up with 56,000 miles.
Once I earned the bonus, I’d book my cruise using the card with a $560 deposit. Next, I’d redeem my 56,000 miles I earned as a travel statement credit to pay off the balance on the card.
I’d then have my wife apply for the same card and make a $560 payment on the cruise after she earned the bonus. She’d use her 56,000 miles as a statement credit to pay off the cruise.
Finally, I’d apply for the a premium rewards credit card. This card offers 50,000 points for spending $3,000 within the first 90 days of opening the account. This spending would result in earning at least 4,500 in points on purchases.
Unfortunately, the card charges a $95 annual fee in the first year. After I earn the bonus, I’d have at least $450 worth of points, net of the annual fee, I could use to finish paying off the $1,500 cruise.
In total, earning the sign-up bonus with regular spending on these three cards would result in a net value of at least $1,570 in credit card rewards to use toward the cruise. If you took the full three months to earn each bonus, this would take nine months to complete.
It’s easy to see how you can get great values travel hacking with credit card rewards. If you feel you can manage the system without going into debt or paying interest, it could be well worth your time.