Travel Hacking… and Why I Don’t

Travel Hacking… and Why I Don’t

Travel hacking is the art of collecting credit card bonuses, frequent flier points, and miles to get free flights, hotels, tours, and more.  There are many people busy earning free trips, and googling “Travel Hacking” leads to a gold mine of tips.  It seems like a frugal dream.  Why don’t I jump on that?

A Couple Reasons I Don’t Bother…

  1. The Trevi Fountain in Rome. It was cheap strategically-booked flights that took us to Oslo, Rome and Barcelona for $470 round trip airfare per person. Not travel hacking!

    The thing all travel hackers seem to have in common is spreadsheets, spreadsheets, spreadsheets. Miles expiring, credit card minimum spends to reach, annual fees coming due, credit card cancellation reminders, company phone numbers, credit card numbers, accounts in case a wallet is lost or stolen… all that has to be tracked.  That’s a lot of time and energy.  If you are passionate about it, cool.  I’m not.

  2. The more there is to keep track of, the more room there is to miss something important. For example, missing a payment can be detrimental to a credit score, and forgetting to cancel before the annual fee hits can wash out the benefit entirely.  I personally have so many things going on (a day job, Airbnb, blog, etsy business, and wedding to plan which means less travel anyway right now) that I would be a prime candidate when it comes to missing important things, but anyone can miss anything.  I pay all my credit card balances off entirely every time my paycheck hits my account (so twice a month), but forgetting a charge or forgetting to link the account to Mint?  I’d be in trouble, especially when it comes to tracking expenses throughout the year and preparing for tax time.
  3. Our Airbnb was only $105 in Mexico City, and the experience was far more authentic than what we’d have had at a “free” hotel!

    Travel credit cards often lock you into their specific brand. They’ll give you plenty of bonuses, but the miles can be difficult to take advantage of.  Often the routes are inconvenient, they won’t give you a direct flight, or the dates you want are blocked out.  Even the Barclay Arrival Plus (revered in the travel hacking community for its sign up bonus and ease of use) earns only 2 miles per dollar, which equates to 2% cash back, but you have to redeem for travel and pay an annual fee.  A cash back card doesn’t lock you into travel, and often has no annual fee.

  4. If the plan is to travel anyway, it’s no big deal to be locked into the category. But what if you accumulate all the points and then can’t use them, either due to a busy work schedule or health issues that come up?  The points will expire, and you’ll be left with nothing.  Instead, you could have gotten the cash back.
  5. If you are using what could have been cash back to travel, you’re still paying for it, just in a different way. It’s no different to get $200 cash back and buy a $200 trip than it is to redeem points/miles for a “free” $200 trip. You can still allocate the cash back money toward travel, but have flexibility to spend elsewhere if you wanted to.  Cash is fungible.  Instead of travel hacking, invest the time in planning a frugal trip.

…Unless It’s Convenient

Almost all the benefits of travel hacking come from the sign up bonuses.  Open new cards when you have increased spending coming up (like a $3,000 deposit on the wedding venue that can be paid with a card).  That’s an easy $500!  But don’t spend for the sake of getting the bonus, since that’s just wasteful and detrimental to your long term goals.

I got a free plane ticket to St. Thomas thanks to all the flying back and forth from Detroit!

If you have a very specific trip in mind, it often makes sense to travel hack.  There can be extra perks like free bags, discounts, etc. from holding the credit card.  However, your trip planning should start first.  For example, say you were flying from Tampa to Detroit regularly because you just moved across the country and miss your family and want to make sure you’re not missing out on birthdays, holidays, etc.  Spirit Airlines has cheap ($100 round trip), direct flights at convenient times most weekends, and credit card holders get to board first.  Open that Spirit Airlines card, and take advantage of the sign up bonus and perks.  Don’t get sucked into a trip you aren’t eagerly planning for just for the sake of redeeming miles you didn’t really need to accumulate to begin with.

The Credit Cards I Use

I have an Amazon card that earns 5% cash back for all Amazon purchases.  I use my Chase Freedom card and my Discover card for 5% cash back with rotating categories (I have a sticky note with the current category attached to the card in my wallet so I remember).  For everything else, I earn an automatic 2% cash back on everything with my Fidelity card.  I save that 2% throughout the year, and then I use it to jump start my IRA contributions in January.  It’s usually only about $200-$300 toward the IRA, considering most of my spending is house bills (paid with cash), Amazon, or one of the rotating cash back categories.  However, it’s still a nice extra bump.

With my 800+ (I believe it is currently at 809) credit score, opening new cards is easy.  I tend to be more strategic when opening new cards, though.  Right now, I have a 0% credit card that I am using to tap future the cash flow from Airbnb early, since January is a time of piling money into the IRA and March is the busy season when cash pours in.

At the end of the day, I generally prefer simplicity, and find that cash back and only a few cards adds more ease to my everyday life.

7 Replies to “Travel Hacking… and Why I Don’t”

  1.  I think too many commenting on this take frugality to be the end goal. The goal is not to be frugal, the goal is to not have to be frugal. But to get to that point you have to start out frugal. Frugality is a means to an end, not the end itself. 

  2. I think you make a lot of great points. I do have the crazy credit card tracking spreadsheets, but I often struggle with some of the valuations people put on points. I value it at what I would have been willing to pay in cash (not what the hotel or airline is charging) so my return is often lower than what the points bloggers claim points are worth. Now that we have young kids and we’re focusing more on visiting family, I’m focusing on cash back cards more and more and the freedom and flexibility are awesome.

  3. One of the big appeals for me in playing the credit card game is that my wife and I get to experience things we would never pay cash for. International business class flights (and the priority checking/security and lounge access that comes with it) sometimes retail for 5 figures. Luxury hotels in major metro centers can be $500/night or more. We’d never pay these rates, but they’re fun for “free”. You can’t exactly assign these things their retail asking price, but we certainly get better than 2 cents per mile/point. That said, I realize it’s not for everybody (very few people I offer to help take me up on it) and it looks like you’ve got your cashback cards setup very well.

  4. i just got rid of my southwest airline card last year in favor of that chase freedom one with the cash back. i think i got a couple of hundred bucks back last year. i got tired of the annual fee on SW and it was good for about one round trip flight a year for the 69 bucks. i agree that i would rather have the cash and buy a ticket.

  5. If you prefer simplicity then it sounds like you are doing it right. I think you are overestimating the difficulty and underestimating your skill to keep track. I turned everything on auto pay so things don’t slip through. I only open one new card at a time so I don’t have to juggle a ton of bonuses.
    Maybe in the future your needs will change, but looks like you’re doing well managing a lot going on.

    1. It’s not that it’s difficult or that I don’t have the skills. I’ve done it before, and I’ve benefited from “free travel.” Sometimes deals are too convenient to pass up, in which case, I’m not going to pass up on the free cash! I think I have two cards right now that I need to cancel soon. But throughout most aspects of my life, I always prefer simplicity, and find that travel hacking with credit cards not adding much in the way of value. It’s far more effective to find cheaper or more cost effective options (for example, Airbnb over a Hilton).

      At the end of the day, I realized that the time I invested in this process could have been better spent. For example, two hours a month tracking the information in a spreadsheet and checking that everything is paid, or two hours reading “Never Split the Difference: Negotiating As If Your Life Depended On It” and negotiating a higher salary? I can tell you exactly which has the real lasting return, the one that will pay out with dividends. Also, when I called and cancelled the 13(?) superfluous cards four years ago, my credit score wend up 40 points. 🙂 But the thing is, if you enjoy the credit card game, keep playing! Time is precious, so spend it how you want to spend it. Otherwise, what’s the point?

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