I haven’t paid for a flight in two years.
Now, having a career in the states, I don’t fly as much as I did right out of college. However, on the rare chance I do get up in the air, I use bonus credit card points (miles) and pay next to nothing.
It’s called Travel Hacking and if you’ve never done it, you should think about starting.
Over the past six months my wife and I flew to Miami for vacation, she flew to South Korea to visit family and friends, and I bought a flight for my mother to fly to Toronto for a family wedding. All three of these trips were paid for using points!
To receive the points you sign up for credit cards, meet the minimum spending requirements and receive the points which can be used for flights, hotel stays, gift cards and sometimes cash. Many of the best cards have an annual fee but a lot of them are waived for the first year. This means you can use the card to get the points and then cancel in 11 months if you choose. Sometimes the yearly fee is worth the bonuses though.
By opening and closing these cards your credit score can fluctuate so make sure you have a high credit score to start! Also don’t spend money on stuff that you wouldn’t have bought already and pay off your card in full on or before the due date. It’s not worth going into debt for a few free flights!
Say for example you signed up for a credit card and in order to get the 50,000 point bonus – enough to fly to Europe round trip – you had to spend $5,000 over three months. The problem is you only spend $1,500 a month – and this includes your rent! Not worth getting the card, right? Wrong! There are ways to increase your spending without actually doing so.
Some tricks I use to maximize my spend:
1. Buy gift cards to places you already shop at. Costco is my favorite especially since I don’t have to use an American Express card if I buy the gift cards through their website. There are also ways to buy cash cards and put them in online bank accounts.
2. Use Amazon Payments. It will take about a week to set up an account. Once you are approved you can send a payment to another Amazon Payment user with a credit card – fee free! There is a $1,000 monthly limit. Think of this as PayPal but without fees. Each month, I send my wife the rent money via credit card and she pays the landlord from her bank account.
3. Get reimbursed. If you travel for work use your credit card for the flight, hotel and other expenses and then get paid back later. You can do this in other situations as well – such as dinners out – but I’ve found less and less people carry cash to pay you back instantly.
Right now I have an embarrassing amount of credit cards. I won’t get into the number – I would have to take off my socks and start counting on my toes – but I can tell you it doesn’t affect your credit score negatively if you pay them off on time.* I usually pay mine off early – I’m a little OCD – but I also set automatic payments in case I forget. My cards could run on autopilot if I didn’t want to check them anymore.
When picking out your card(s) you need to set your travel goals. My short term goal is to travel more in the US, long term I’d like to do a round-the-world trip with 5-10 stops. You may simply want to visit your cousins in Italy this fall and don’t want to fork over $1,000 for a ticket.
I recently signed up for two Southwest credit cards. Each one offers 50,000 Rapid Rewards (miles) after spending $2,000 over 3 months. This is a pretty easy spend using the tricks above. In 3 months I will have 104,000 miles if I meet the minimum spending requirements. However, if I get 110,000 miles I will be eligible for a Companion Pass. The pass allows me to have a companion fly with me for free through the end of 2015.
In Layman’s Terms:
1. Spend $10,000 on my two new credit cards.
2. My wife (companion) flies for free whenever I fly with Southwest through 12/31/15
3. Use the 110,000+ miles towards flights!
Right before applying for these cards I went to Southwest and looked at their flights out of SFO and SJC. Wow, they are super reasonable! San Francisco to Dallas for the UCLA vs Texas football game at AT&T Stadium is only 15,000 Rapid Rewards round trip. Miami was similar. Vegas was even less. My guess is we will be able to fly roundtrip 5-8 times using just these points. And if for some reason we use up all the points we can still buy one ticket and fly together through the end of 2015!
Only downside: The credit card fees of $99 and $69 aren’t waved so keeping these cards for a minimum of two years will cost $336. No doubt that’s a still a killer deal. Check this post for more information about the deal.
For a round-the-world trip I started to accumulate miles with my Citi AAdvantage personal and business cards as well as my American Express SPG personal and business cards. I had enough points for one ticket and was working on the wife’s when American Airlines did the most jerk move of all time and canceled their Explorer Award program with no warning!
I had no immediate plans to go on this trip, but this is still ridiculous! I plan to cancel all four of my cards that earn American Airlines points over the next few months in protest. I will use these points presumably to fly to South America and/or Europe but the deal won’t be close to the same value anymore.
With that being said, there are risks you run when signing up for cards. Also, there are tons of other cards out there from different banks such as Chase, Citi, American Express, Barclay’s, US Bank and Capital One. Do your researching before applying!
I would suggest visiting FlyerTalk Forums and going to my personal favorite travel hacking site: MileValue. Scott who runs the site will give you a free consultation to help you get started on the right foot. When you decide on what cards are right for you, use his affiliate links to say thanks.
So, do you still pay for your flights? Planning any fun trips in the near future? Post in the comments below!
*I’m not responsible if you ruin your credit score or go into debt. In my experience my credit score has actually gone up after signing up for – and paying on time – multiple credit cards.