Or how Ellen discovered travel hacking and saved over $2,000 this year traveling with her family of six for free!
(Disclosure: This post will contain links to the credit cards I mention and I will get a referral bonus if you sign up with my link. Links are in red. It’s no added cost to you and just helps me keep traveling on the cheap!)
I’ll elaborate…
Where it all began
In January of this year, I read an article in Money magazine about travel hacking. Sounds illegal, right? Well, it’s not! It simply refers to using credit card points from sign-up bonuses and and maximizing each card’s bonus categories to travel for free by using points to pay for travel expenses. The article was about a guy who has made this his business. He has an entire website (10x Travel) and a Facebook page dedicated to teaching others how to use credit card points to travel for free. He also has 20+ credit cards! Say what? What about Dave Ramsey? Credit cards are evil! Well, used responsibly, they can be pretty awesome and they open up the ability to travel more because many of the expenses can be covered by points! And, since it’s expensive doing anything as a large family, I figured that if I could learn how to get our family of six to travel for free? Sign me up!
A Caution
Now, I will say, if you don’t have the discipline to pay off your credit cards each month, then quit reading. Flee now. This is not for you. You will dig a hole for yourself and make the whole awesomeness of points not worth it because you’ll waste money paying crazy high interest fees. So, just don’t go there. This only works if you are mature and disciplined to pay your credit cards off each month. And, don’t spend more than you have! Treat your credit cards like they are debit cards. Okay, moving along now to the good stuff and what makes me giddy!
Getting Started
Despite my husband’s skepticism, but with his permission, I jumped in! And, if you know me, you know that I am physically unable to do anything halfway. I go a little overboard in anything I do. So, I read and read and read and then, I read some more on various websites about this. Do your own research before you start! I learned so many things! I learned that opening a lot of credit cards does not lower your credit score. It may drop it a little initially from the bank doing a credit check but it will bounce right back within a few weeks. I learned that Chase cards tend to be considered the best cards in the market because they have excellent sign-up bonuses. However, Chase has a rule called the 5/24 rule. This means you cannot open more than 5 cards (any cards, not just from Chase) in a 24 month period. So, you need to plan strategically and not just start opening cards willy-nilly! So, don’t do that! Research and develop a plan! Avoid the temptation at Lowe’s or other stores who try to talk you into opening store cards. This takes a valuable spot and doesn’t give the value other cards will!
So, what was my strategy? After lots of research, I decided I wanted my first card to be the Chase Sapphire Preferred. Why? Because the Chase Sapphire level cards allow you to transfer points to their transfer partners, two of which include Hyatt and Southwest. Most of the research I read frequently listed that Hyatt gives you the best bang for your buck on points for hotels. And, you know how much I like a deal. They also have the Hyatt Place brand which has rooms with an occupancy of 6, and they have free breakfast.
We’ve had a cashback credit card for over six years. It has been our only credit card. We always thought the best thing to do was to redeem the points for statement credit every Christmas. And, it was nice to get $600-$700 back every year during an expensive month. But, if points could pay for travel we are already doing, and go further than that $600-$700, then why not explore that?
The Chase Sapphire Preferred currently has a $95 annual fee and you get 60,000 points if you put a $4k minimum spend on it within 3 months. You get 3% back at restaurants and 2% on travel. Chase also, according to the articles I read, has the most generous travel categories. Tolls, parking garages, hotels, flights, etc. all count as travel. It even counted our 5 days in the cheap airport parking lot at the Cincinnati airport recently. You get 1% back on everything else. That 60k points could be redeemed for $600 of statement credit. But, if you redeem them for travel, you will get much more value. For example, many Hyatt Places are between 5k and 8k points per night. You could potentially stay TWELVE nights with that 60k points for FREE. The average cost for a Hyatt Place is $100-150 per night! And, transferring points is easy and takes less than 5 minutes and points are instantly available. But, you must have a Sapphire level card with Chase in order to transfer to travel partners. There are a whole host of other benefits of the card as well like no foreign transaction fees (which saved me about $50 recently on a trip to Canada), trip cancellation/delay insurance, lost baggage reimbursement, and more. The benefits far outweigh the $95 annual fee. You also have the ability to combine points among your various Chase cards. I can move points from my Freedom card to my Sapphire card to use for travel expenses. You could also transfer them to Southwest which goes a long way as well! We haven’t paid to fly in 3 years!
Let’s see if I can convince you. These trips that I mention below were already scheduled travel that we were able to use points to alleviate a lot of the cost which freed up money to use elsewhere…like savings!
Money Saved This Year
- Birmingham–I wrote a blog post about our trip here. But, essentially I used 10k points and saved $300 for two nights at a Hyatt Place.
- Denver–I transferred 20K points which is the equivalent of $200 to pay for all 6 of us to fly to Denver on Southwest. With all the taxes, it was going to cost over $350. But, when you pay with points, all you pay is the 9/11 tax of $5.60 per person. So, I saved a little over $150, but it felt like more since I used points and didn’t feel the sting at all except for $30 in taxes. I put the taxes on my Sapphire card to ensure that if our baggage was lost or trip cancelled that I could get Chase to cover it! For our hotel, we stayed 5 nights at a Hyatt Place in Denver. It was 8k points per night. Cash price was $140/night plus taxes. I simply transferred 40k points with a few clicks and booked our rooms. You don’t pay taxes on hotel rooms that you pay for with points! If I had redeemed those 40k points for $400, it wouldn’t have come close to covering our stay, which with taxes would have been over $700! And, we got free breakfast each morning. We were in Denver to attend a former student’s wedding and decided to go for a few extra days. All in all, I took 60k points and stretched it out to cover $1050 worth of expenses! It was also an amazing trip and we can’t wait to go back to the mountains!
- Niagara Falls-Hotels there are pricey. I wanted to be within walking distance of all the attractions since my parents were going to be with us. The Hyatt Place is 0.3 miles from the dock of the Maid of the Mist boat ride and less than a 15 minute walk from the other attractions. It is a Category 3 property which meant it was 12k points per night for a room. The cash price when we were there was $267/night! I booked 2 rooms and used 24k points. Normally I would have never even considered a hotel this expensive because I’m a cheapskate, but it was so conveniently located and well worth it since it cost me nothing! For the equivalent of $240 in points, I still paid less than the cost of one room and I didn’t have to worry about the logistics of being at a hotel that wasn’t within walking distance. Also, when I checked in, they comped my parking since I paid with points. This saved me another $100 since parking was $50/day. So, 24k points saved me more than $600. My family of six traveling for free was awesome, but I was also able to give my parents an amazing time as well!
Which Cards I Use and When
I opened the Chase Sapphire Preferred in February. Then, in April, I opened a Chase Freedom Unlimited. Why? Because it gives you 1.5% back on all spending, 3% back on restaurants and drugstores, and has no annual fee. I can also move the points from this card to my Sapphire card which then can be used for travel! So, this is my everyday spending card since it earns more than just 1%. By using a combination of the these 2 cards, you can really maximize your point earning potential for travel expenses!
And, finally…
There is so much more to say. I’ve really only hit the surface of the travel hacking world and my current strategy for earning. My Chase status is only 3/24. I will be filling the last two slots in the next few months as I open some Southwest airline cards in order to attain the Companion Pass (for now Google it, I’ll do a blog post on this eventually!). I haven’t yet delved into the world of American Express, Citi, or Capital One cards! But, there are some awesome sign up bonuses and different travel partners for them! That may come eventually, but I’m not in a hurry. For now, I’m going to keep my current card strategy going because I plan on my family of six traveling for free again next year, hopefully with one of us flying free with the Companion Pass! I’d love to answer any questions you might have, so leave me some comments! And, if you are intrigued and want to get started, I’d love for you to use my links! Thanks for sticking with me!