What is travel credit card hacking? I, myself, hadn’t even heard of the term until last summer, when I began thinking about getting a new credit card for my move across the country. But it turns out that many Americans use credit cards in an intelligent manner, signing up for new cards every so often to receive a large number of points. And often, points can then be transferred into miles (which, of course, get you free flights!).
How I started travel credit card hacking
If you, like me, have a solid credit score, then credit card hacking may have an easy point of entry. I signed up for the Chase Sapphire Preferred last summer, which I’d heard was one of the best travel credit cards on the market. It waived its $95 annual fee for the first year. (Though I actually believe this is no longer the case — make sure that your anticipated mileage return outweighs the annual fee on a lot of these cards.) By spending $3,000 in the first three months since the date I applied for the card, I could earn 50,000 Ultimate Rewards points. I wound up spending the required amount, and I used these points to book two round-trip tickets from San Francisco to NYC, as well as a round-trip ticket from San Francisco to San Diego.
You may be thinking: didn’t these three flights cost you the $3,000 you had to spend in order to get the points? Well…no. Of course, you apply for a credit card with a massive spending bonus before you have large expenses coming up, it’s easy to justify your purchases as necessary and think the resulting flights are “free.” But I used my card to pay for things I had already planned to pay for. This included a ticket to San Francisco, during my initial move to the West Coast, as well as to buy furniture, culinary necessities, and other household essentials, from stain remover to toilet paper. I also used my card to buy monthly public transit passes, clothes specific for my new job that I didn’t realize I’d need until I moved, and even the right kind of Tupperware for my new meal prep lifestyle. Case in point: if you time your credit card application just right, then regular purchases slowly transfer to free flights thanks to minimum spending bonuses.
How I responsibly continue the credit card hacking cycle
And then, six months later, you can apply for a new card, and the process continues! But what if you don’t have large purchases every six months? In that case, I always do a few things:
1. Offer to pay for every group meal, and have my friends Venmo me their portions.
2. Plan ahead, and buy gift cards for the stores that I frequent often using my credit card. For me, this is Safeway, Trader Joe’s, and Walgreens. Then, over the next few months, I can spend extremely minimally by using these gift cards for the majority of my purchases. (Of course, you may have to plan your budget well ahead of time in order to do this.)
3. Use my credit card for every single purchase — this includes adding it as my preferred card on Uber or Lyft, so that I don’t miss out on any possible purchase opportunity. (Just make sure you are only paying for purchases you know fit in your budget.)
4. Use my credit card to pay for recurring bills or payments on PayPal. I recently bought a Hamilton ticket off of a friend of a friend through PayPal, and paid an additional $3.99 in fees so that the purchase could be added to my credit card. IMO, the resulting miles are worth a lot more.
5. Make a list of upcoming necessary purchases, and bring out that list when I have a credit card spending limit I need to reach. Since I know I’m going to get a new card every few months or so, I write down any essentials that I need to buy and wait to buy them all at once on a new credit card. Right now, my list includes new shoes for work (since my current ones are somewhat broken), new jeans (since my current ones are two sizes too big) and a haircut (which can be pricey because I have curly hair).
6. Attempt to pre-pay for services I know I’m going to continue. For instance, you could budget to buy a Spotify gift card and use it to pay your bill for the next year. I also spoke to my gym and paid for six months of my membership in advance, which wound up helping me reach my spending goal that much faster.
Plan ahead to use your credit card smartly
Of course, all of this takes a lot of planning ahead, and you should not pay for anything with a credit card if you haven’t budgeted for it. It can be scary to get into credit card hacking, but the rush of receiving miles that you can use to travel for free is absolutely worth it. Just remember to always pay off your credit card bill on time and in full, and to downgrade any credit cards with annual fees that you don’t want to pay for after the first year is up. [Editor’s note: if you downgrade to a no-fee card with the same provider, you can avoid tarnishing your credit history on your credit report.] I recommend having an Excel spreadsheet that tracks each card, the date you applied for it, the date by which you need to meet your spending limit in order to earn your bonus, and the date when the credit card company will charge you for their annual fee. You can also take advantage of other perks of the card (like free TSA PreCheck or Club Passes or Travel Credit) to make sure that you make the most of its benefits before you downgrade it.
While credit card hacking can be a challenge while living on a budget, I justify it though the habits I listed above. It’s not for everyone, but it has saved me hundreds of dollars already, and I plan to continue to “collect” credit cards — and miles!
Keertana Anandraj is a recent college grad living in San Francisco. When she isn’t conducting international macroeconomic research at her day job, you can find her in the spin room or planning her next adventure.
Image via Unsplash