Today, more and more people are realizing that relationships and experiences are what create a quality life on their journey to financial independence.
However saving up hundreds, even thousands of dollars for your next trip isn’t always that easy, let alone saving up for multiple trips regularly to fill your dreams.
But what if I told you there was another way that is relatively quick and simple?
What is Travel Hacking
Travel hacking is simple, as it is leveraging your good FICO score and ability to open lines of credit to build a large pool of travel rewards points.
There are hundreds of great cards that can give you benefits. When shopping for cards, look for ones that give you an introductory amount of points or miles if you spend a certain amount that will get you free flights, free hotels and even free car rentals.
What’s more… These travel rewards points you earn are currently non-taxable and could translate into $10K (or more!) in additional “tax-free” income if redeemed strategically.
In the end, if you are responsible with credit cards, can pay off the balances in full every month and have great credit, travel hacking could be a great way to accelerate the number of travel rewards points you can earn to travel the world with family and friends.
How to Travel Hack
Travel hacking can be as simple as opening up a credit card, buy something and start earning points. However, if you put a little more thought and energy into it, you can leverage your normal personal and business spending to earn MEGA points. Below are the high-level steps to travel hacking:
- Look at your recurring personal and business expenses and total these up. These are the expenses that you would incur anyway, so why not earn points for them!
- Open up a card that will allow you to get travel rewards for putting these recurring expenses on that card. The total expense amount should be at or above the spend you need to make in the introductory time period in order to capture the bonus points (don’t worry if you are a little short… there are some creative ways to make this gap up!).
- OR You can use that same card to make any large purchase that you need to make.
- Pay all of your bills and pay off the card in full every month.
- If you have a spouse, alternate opening cards in your name and in your spouses name in order to maximize the introductory points.
You might be thinking “This is great info, but is there a proven card strategy I can copy?”
Yes! Let’s cover one of the most powerful travel hacking strategies out there.
The Chase Gauntlet Strategy
One of my favorite travel hacking strategies is known as the Chase Gauntlet to maximize the Chase Ultimate Rewards system for flights and hotels.
Chase Ultimate Rewards are the most valuable points available today as you can book travel directly on their travel platform with 10 airlines and 3 hotel chains, and transfer to a myriad of other airlines and hotel partners, unlocking an almost endless possibility of travel options around the world.
My husband and I sat down and laid out our exact strategy to open cards focusing on Chase Ultimate Rewards Points and airlines. With 3 travelers in my family, I leaned in hard to airline rewards as we had other ways to subsidize our hotel and car bookings. The benefit of committing to the Chase Gauntlet is I could take advantage of their rules first to get the most valuable points on the market.
Here is how to execute the Chase Gauntlet strategy:
- Choose a Chase card that feeds into the Chase Ultimate Rewards systems. Chase only allows cardholders to open up 5 credit cards in 2 years. This includes being co-signers on other cards. So open the card under one person’s name only.
- If you actively opening loans (which we were at the time), involve your lender at a high-level in your strategy so you have no surprises.
- Pick the card(s) that meet your strategy. My strategy was to maximize all of the Chase Ultimate Rewards points as I possibly could. Some cards do have annual maintenance fees. Keep in mind, the points you will earn will outweigh the initial cost to open the card. You should close the card prior to the fees renewing. Here are the cards and the order in which we opened them. (Note: the links below are affiliate links that give us both bonus points when you use them. Win-win!):
- Chase Sapphire Preferred (60,000 bonus points)
- Chase Ink Business (80,000 bonus points)
- A sole-proprietor business (or one that you want to start, such as rental real estate) qualifies!
- Chase United Explorer MileagePlus (40,000 bonus points)
- Only open this card if you will use United for travel. If you never travel on United, skip the United card and substitute another Chase Ultimate Rewards card.
- Southwest Rapid Rewards (40,000 bonus points)
- Southwest Rapid Rewards Business (60,000 bonus points)
- Meet your minimum spends within the introductory period. We had several real estate rehabs going on at the time we were executing our strategy, so it was easy for us to maximize the spend limits and accrue 500K in points in our first few months of travel hacking. However, you may not have this level of spend. So, make sure you meet that spend before opening up another card (and miss out on the points!). Here are a few creative ways to meet the minimum spends on things you are already purchasing.
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- Prepay your childcare care
- Prepay gas, groceries, and household items by buying gift cards
- Prepay expenses for the year in your business (even as a Sole-Proprietor)
- Maintain your strategy. Keep track of your cards, how much of a spend you need to meet (and by when), and when you should close the card to avoid paying annual fees. Feel free to use this simple tracker here to track your card strategy.
- But, I didn’t close all of my cards. I kept my Chase Sapphire Preferred card open and put all of our everyday spending on it. I also kept my Southwest Rapid Rewards Business card open for business expenses.
Here is how to accelerate your strategy:
- Keep it in the family. If you meet the spend limits to get the bonus points, think about bringing your spouse or child into the strategy. When I opened a card, I would give my husband a referral code so he could open up a card as well and earn additional bonus points as a referral.
- Supercharge your strategy with the Southwest Companion Pass. The Southwest Companion pass allows for 1 traveler to travel for free with a paid (cash or points) traveler. The designated companion can also be switched up to 4 times. Getting the pass takes strategy since you have to accrue 110K miles in the same calendar year. For me, I opened both Southwest cards on January 1 to keep the points in the same calendar year. Unfortunately, my husband’s bike was stolen so we were able to max this spend out very quickly. As a result of executing this strategy in early January, the Southwest Companion pass would be good for the remainder of the calendar year (11 months) AND the following year (12 months). Essentially, our daughter is traveling with us for free for nearly 23 months to places like Costa Rica, Mexico, Cuba, along with seeing family and friends.
- It pays to be loyal. Unless there is a huge price difference, I book all hotels and cars through the Southwest platform to continue feeding in points in my Southwest Rapids Rewards account. I get 2 points for every dollar spent on the card in addition to points accrued just for booking through the platform.
- Rinse and repeat. After 2 years, my husband will open his two Southwest Rapid Rewards cards and we will repeat the Companion Pass strategy, keeping 1 traveler free (reducing flight costs by nearly one-third). Then it will have been two years and I can begin my Chase Gauntlet all over again!
Landmines to Watch Out For
Travel hacking works best if you can pay the cards off in full every month (the entire point is lost if you carry a balance on the cards). Below are more lessons I’ve learned in my past 2 years of travel hacking.
- If you are not responsible with credit cards, this strategy is not for you.
- If you are repairing your credit, this strategy is not for you.
- If you are qualifying for additional loans, know your FICO score will dip temporarily when you open a card. However, when you pay off the entire balance of the credit card on time, your score most likely will go up! Make sure to involve your lender to understand the best timing to open the card.
- Be aware, you have to spend the accrued introductory points before you close the card or you may be forced to return the bonus points (booo!). A workaround is to transfer the introductory points to the travel partners platform or to a family member before you close the card (point transfers are final).
- The Chase Gauntlet only allows 5 cards to be opened in a 2-year timeframe. This includes being an authorized signer on another card.
Conclusion
Travel hacking is a simple and quick way to leverage your FICO score, ability to open lines of credit, and everyday expenses (personal or business) to create a quality life on their journey to financial independence.
To recap, here is the Chase Gauntlet at a glance:
- Chase Sapphire Preferred (60,000 bonus points)
- Chase Ink Business (80,000 bonus points)
- Chase United Explorer MileagePlus (40,000 bonus points)
- Southwest Rapid Rewards (40,000 bonus points)
- Southwest Rapid Rewards Business (60,000 bonus points)
- Close cards as soon as possible without losing bonus points
- Repeat
Picking a travel hacking strategy, like the Chase Gauntlet, is a fantastic way to add $10K (or more points) tax-free to your bottom line to travel the world with those you love most.
And who couldn’t use both more tax-free “income” and time for experiences?
Cheers!
Whitney
PS. If you found value in this post, please consider using the affiliate links posted here so you and I can both earn bonus miles and continue “paying it forward”. Win-win!
