Travel Hacking 101: Ultimate Guide to Getting Started

Hacking Rewards: A Beginner's Guide to Travel Hack With Points Using Reward Credit Cards

The strategic use of credit cards to get free vacations is an art form. One of the most exciting and lucrative aspects of travel reward credit cards is leveraging them to your advantage. You can make your everyday purchases work to your advantage and earn free vacations just by using the right card on the money you are spending anyway. Everyone has monthly household expenses: groceries, car insurance, clothing, gas, restaurants, etc. 

You may be wondering what exactly travel hacking is. Travel hacking is earning free travel by using a mix of the right credit cards, hotel loyalty programs, and airline miles to earn free flights and free hotel stays.  I taught myself how to travel hack and take wonderful vacations for free. So far we have travel hacked Disney World, Disneyland and Universal Studios, an all-inclusive in Jamaica, Miami, New York City, Lake Placid, and others. This blog post will guide you through the basics of tracking and hacking travel rewards using credit cards, which can help you unlock a world of benefits and perks. 

You can also check out our YouTube post on Travel Hacking 101

Understanding Travel Reward Credit Cards:

Reward credit cards offer users various perks for making purchases of things you are already buying. These perks can come in the form of cashback, travel miles, points, or other redeemable benefits. To make the most of these rewards, it's crucial to understand the types of rewards offered and how to play the reward points game.

Choosing the Right Travel Reward Credit Card:

Choosing the right new credit card can be paralyzing, there are so many options. Start with what makes you comfortable and work your way up. My suggestion is to start with a free airline or hotel co-branded card and work your way up from there. 

Step 1. - Choosing a card

The first thing is to figure out which would be the best credit card for your travel desires.  Do you have a favorite airline or hotel chain? Many hotel chains have a co-branded credit card (Marriott, Hilton, Hyatt). Most major airlines  (American Airlines, British Airways, Jet Blue, United Airlines, Qatar) also have a co-branded credit card. Choose a cobranded card that has credit card bonuses also known as a sign-up bonus for new cardholders. 

Many cobranded groups offer multiple cards within the same chain. For example, Hilton has 3 cards offered by American Express (Hilton Honors card, Surpass, and Aspire). You should always select the lowest level card in a co-branded group (Hilton Honors card in this example). By selecting the lowest level credit card available, you can earn the sign-up bonus for all 3 Hilton cards, however, if you start with the Aspire, you will not be able to earn the sign-up bonus for the Surpass or Hilton Honors card.  To learn more about selecting the lowest card in a group check out "Essential Guide to the Perfect Starter Travel Credit Card."

Ensure you can meet the minimum spending requirement before applying for the card. For more on how to pick your first travel reward credit card check out "Travel Smart: Choosing Your First Travel Rewards Credit Card and begin Travel Hacking." When selecting a card be sure to read the fine print. Some travel reward cards have an annual fee, which can be waived for the first year. Not all annual fees are bad, in fact, sometimes the benefits of the card are worth more than the fee. For example, many cards have huge bonuses making award travel easier to obtain, offering a companion pass, or elite status. To learn more about credit card fees check out our post. I started travel hacking with the American Express Hilton Honors card and earned enough hotel points for a free trip to Lake Placid pretty quickly. I have since earned free trips every year using my Hilton Surpass card. 

Step 2- Charge ALL of your expenses to your new card

The whole point of travel hacking is to use our everyday spending to cover travel expenses. So to meet your travel goals, you have to charge all our regular expenses to travel reward cards to earn enough points. We pay for cell phones, internet, groceries, gas, eating out, clothes, Amazon, etc to our travel reward cards. You can earn points for all these expenses. There is no reason to not use a travel rewards card for any of your expenses. You cannot earn credit card rewards on charges that are made to different cards.  Travel hacking takes financial discipline. We do not want to spend more money than we would have if we were not travel hacking. To qualify for the best travel credit cards and best deals,  your credit score matters. Make sure you pay your bills on time and do not go into debt on your credit cards. Stay within your monthly budget. Being able to pay your credit card bill at the end of the month is important.  Check out our travel hacking strategy post "Earning Reward Strategically-Use Credit Card Points for Your Next Vacation".

Step 3- Sign up bonus met- Repeat over again

The next step after you have met the signup bonus for your first card is to look for and apply for your next card. The most efficient way to earn enough points for cheap flights and free hotel rooms is from sign-up bonuses. You can either pick the next level up of the cobranded card you selected in Step 1 or pick a different cobranded credit card and stick with the lowest-level card in that brand. The best credit cards for you will vary on your travel desires. One of the best ways to get a great deal on travel rewards is to have a goal in mind and select the cards to meet that goal. Let's say, your goal is international travel flying in business class. A credit card earning frequent flyer miles will be a better deal for you perhaps over hotel rewards. It is possible to book flights for a round trip international flight in business class on points only. If that is your goal, you will be selecting many levels of cards that are affiliated with frequent flyer programs. However, if your goal is to stay in a fancy hotel that has a cobranded card, and maybe it is a domestic flight then your best credit card would be a cobranded hotel card and a cobranded airlines card. It all depends on what you want to do. Another example, I took my kids to Disney World this year. My original goal was to stay at the Swan Reserve Hotel since I could use Marriott points and get the perks of an on-property hotel. So I applied for the Marriott Bevy, as did my person 2. To learn more about our magical Disney trip check out "Our Magical Experience on a Disney World Vacation."

After signing up for your next travel reward card, make sure you will be able to meet the minimum spending requirements. If you have a big purchase that will help you meet the minimum use the new card for that purchase. If not, transfer your regular spending from the card you obtained in Step 1 to the new card to meet the requirements. To learn how to keep getting sign-up bonuses check out "You Reached Your First Travel Credit Card Sign-Up Bonus: Now What?"

Utilizing Bonus Categories:

Credit cards often feature rotating bonus categories that offer higher reward rates for specific types of spending. Bonus categories are a great way to earn lots of points without needing to spend much money. The best part is many cards have bonus categories for things you are already spending money on such as gas stations, groceries, or restaurants. Keep track of which cards have bonuses for which categories and be sure to use the right cards. Stay informed about these categories and adjust your purchasing behavior accordingly. Find out which of your credit cards are the best cards for each spending category. Different credit card companies offer extra points for different purchases. 

For example, if card 1 offers bonus points for groceries, use it specifically for groceries. If another card offers bonus points for gas, use that card for gas purchases. However, always make sure to meet any minimum spending requirements to meet sign-up bonuses. To play the travel hacking game, you will be managing multiple credit cards. On different cards, you can earn a signup bonus or get bonus points for specific categories. Staying organized with your credit cards is important to avoid fees and get the most out of rewards. Check out our post on managing your travel reward cards. 

Once you get the hang of using bonus categories, you can buy gift cards at stores that offer bonus points, for other stores that you normally shop at. For example, if a credit card offers a bonus category for grocery stores you can purchase gift cards at a supermarket for other stores you may shop at such as Amazon or Target. This will essentially get you bonus points for your purchases at Amazon or Target even though they are not a part of your bonus categories. 

By following our ultimate guide, you too can become a travel hacker. You can have wonderful vacations on a tight budget by using our travel hacking strategies. Last year we went to an all-inclusive resort in Jamaica completely free.