6 Financially Intelligent Travel Tips
Before you start with luxury traveling & travel hacking, it’s imperative that you already have a very good handle on your personal spending and overall goals. At the same time, if you have debt (credit cards, student loans) that isn’t paid off in full each month or have an immediate need for a top notch credit score then you are not quite ready to embark on some of these travel hacking strategies.
I will say this, travel hacking can teach you very useful financial management skills. You have to really be on top of your spending and bill payments, monitoring your credit score and looking for travel value. Saving $6,000 per year after-tax, or $10,000 pre-tax is effectively giving yourself a $10,000 raise plus the vacations you enjoy to boot.
So let’s jump in:
1. Play The Miles Game using Rewards Credit Cards
This is also known as credit card churning. It combines the top aspects of airline and hotel loyalty programs to book expensive travel for almost nothing.
Banks that back the rewards credit cards today are giving away pretty big sign-up bonuses for applying for their cards. We are talking about bonuses large enough to redeem four round trip tickets overseas.
So credit card churning involves repeatedly signing up for multiple credit cards in order to rack up hundreds of thousands of miles in sign up bonus points to be spent on travel.
Caveats – To be eligible, you have to pay off your credit cards every month and meet minimum spending requirements on the cards. At the same time, you should have a credit score well north of 700 and not have an immediate need for a top notch credit score (as this strategy my temporarily lower your credit score). Also, you should be aware that this strategy takes time to implement and manage. So it may not be for everyone. To combat the effects on your credit score you and your significant other can alternate signing up for cards so you only get half of the dings on your credit.
The upside is that by the time you reached your minimum spending requirements (e.g. $2,000 on your Visa by U.S. Bank in 3 months), one credit card application is almost worth the cost of an international flight. Combine that with the fact that you can be approved for up to 8 credit cards per round of applications, this can be a pretty worthwhile hobby.
My suggestions is to keep it simple. Have a travel goal and work one or two cards to get the appropriate rewards.
2. Have a Goal
Before you begin the Miles Game, have a goal. Determine where you want to go? Is it a trip overseas? For two of you?
Figure out what your future travel plans are so you can determine what cards to apply for so you can minimize the effort and maximize the impact. At the same time, determine how much this travel will cost you in dollars and points.
If you want to fly a large family far overseas, focus on airline affiliated miles or flexible rewards programs. If you want luxurious hotels, look into hotel reward cards like that offered by Starwood.
3. Research the Best Available Offers
Go to ThePointsGuy.com, Nerdwallet.com and FlyerTalk.com to find out offers and research those cards that you are considering. You too may find additional bonus miles as these sites list usually list the best available links when it comes to signing up.
4. Determine The Number of Cards You Will Apply For
How many miles do you need based on your goals? How much spending do you reasonably do in a month? How many cards can you manage?
Don’t apply for more than one business card and one personal card from the same company per round of applications.
5. Sign Up For Rewards Cards and Programs
When you a ready to sign up, consider hosting an App Party as famed blogger ptmoney.com does. An app (application) party is when you sign up with several credit cards all at once to maximize your bonus points and minimize your credit score impact.
Make sure you sign up for any rewards membership numbers at hotels and with airlines. It’s free and all you have to do is fill in your membership number during the reservation process. Sometimes your receive other miles/points and other benefits.
As far as good travel rewards cards go here are some to check out and a very valuable resource to maximize your travel points.
6. Travel During Off-Season and Use Flexible Travel Dates
I know traveling off-season is not always not always possible but it is something to consider as the difference in prices and reward rates a week before or after a non-peak season can be up to double the price.
And when it comes to flights, the best way to find a cheap flight is to be flexible with your travel dates. It’s pretty simple really. The more options you give yourself, the more likely you are to find a better price.
I suggest you use Kayak.com. When searching for flights, tell Kayak.com your dates are flexible +-/ 3 days on both ends, even if they aren’t. Also, tell Kayak the main dates you are search for, not the exact dates but target dates.
Doing this may save you hundreds of dollars or points at a time.
All that said, playing the miles game is quite simply one of those rare win-win propositions that in your career or in life, you’d be foolish not to take advantage of in some way shape or form. It allows you to create meaningful experiences, teaches you sounds money management skills and puts money in your pocket each year and for your financial future.
Go fly the friendly skies.