Wait. What? Run up credit cards? How will you ever reach financial independence if you do that? First, if you are a person who lacks the discipline to pay off your credit card bills in full each month, this post is not for you (yet?!). Head on over to our post on: Can You Reduce Your Spending? If you use credit cards for spending and consistently pay them off in full each month, then continue reading about one of our travel hacks (or two!).
But before we get to credit cards ...
Flights
Last year we booked a surprise trip to Disney World for over Thanksgiving Break 2018, and of course it was one of the busiest and most expensive times to travel to The Most Magical Place On Earth.
When we booked the flights back in May 2018, we ended up paying an average of $587 per person round trip to fly from Houston to Orlando! And that was for flying Southwest Airlines. I’m sorry, but when we fly Southwest, I expect to pay between $200 - $350 per person (for this flight). I was determined to get a lower rate. I would check the airfare everyday (it literally takes a minute or less), and finally in mid-September 2018 I noticed our return flight had come down by $115 per person.
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| Headed to our Southwest Airlines flight to Walt Disney World. |
I really didn’t have any experience with this sort of thing (which is why I called instead of doing it online myself), but I assumed, “ok, now I’m going to be on hold for 20 minutes or more, and then the agent is going to come on the line and tell me some reason that is buried in the fine print as to why I can’t switch my flight to the new lower fare.”
Much to my surprise, none of this happened! The agent looked up our reservation, saw the new lower rate, and immediately applied it. We immediately saved over $460! And this only took 5 minutes. You heard that right.
But I wasn’t done yet! The next day the price came down on the departing flight for another $15 per person. I was convinced that they would just say, “sorry you already changed to a lower rate ... we can’t help you.” Again, I was surprised, and I had the exact same positive experience with Southwest as I did the day before. (Note, the wait time for both calls was less than a minute). Within 5 minutes we had saved another $50 to give us a $512 credit that we had to use by 5/31/2019.
This in and of itself was absolutely a form of travel hacking! By taking a minute or two every morning to check the fares, we were able to earn a $512 travel credit.
Ok, so now the “problem” is we had to use the credits by 5/31/2019 (or we lose them); this means the flight had to occur before 5/31/2019.
We were only planning to take one (big) trip in 2019 (Colorado for us this year) because by 2020 there is a good chance that our lives could become one long trip so we thought it would be a good year to hang around town and save up a little extra cash in the process. However, now we have this $512 credit, and we certainly don’t want to lose it (as this is money we have already spent). So now what? Bring on the credit card hacks ...
Credit Card Hacks
At that point I realized it had been a while since we had signed up for a new credit card so I did a quick search to see what kind of deals are out there. When we sign up for cards, we look for 2 criteria:
- Ideally no annual fee (or at least the first year free).
- Strong sign up bonus with reasonable spending limits to achieve sign up bonus.
I did a quick search and (at the time) Capital One had a new card out that easily met both of our criteria: No fees for the first year and $500 cash rewards once we spend $3,000 in the first 3 months. Success!
Will we ever pay the annual fee for this credit card?
No. When the anniversary approaches, we will do one of two things: 1) cancel the card or 2) downgrade the card to one of Capital One's zero fee cards.
Will this hurt our credit score?
Again, no. We have been using credit cards like this for probably over 5 years now, and our credit scores are pushing 800.
So how do we plan to meet the spending criteria in order to get the bonus?
This part is easy! All of our bills are set up for automatic payment, so whenever we get a card like this I simply switch the autopay bills from the current card to the new card. This typically takes about 20 minutes. So 20 minutes of work for a $500 reward is the equivalent to paying ourselves $1,500 per hour. I could go for that!
- Tithe
- Electricity
- Water Bill
- Car Insurance
- Cell Phones
- Internet
- Dog Food
We will also use this as our primary spending card until we meet the spending criteria as well, so you can add the following to the list:
- Groceries
- Gas
- Variable Spending
Once all of these things are factored in, we easily reached the spending limit in about 6 weeks or so.
Another Credit Card Trick
If you are a married couple you can sign up for these cards individually and have $1,000 cash rewards instead of $500. Just don’t sign up at the same time unless you plan to spend $6,000 in the next 3 months.
As an example, I signed up for a Capital One card in September 2018, and once I received it I switched all of our autopay bills to my new card. We reached the spend limit by mid-November so in early November we ordered a card for Tara and switched the autopay bills to her card.
So by early 2019, we had about $1,000 free and clear to use towards our unplanned trip in 2019.
That gives us $512 in travel credits and $1,000 cash so $1,512 total. We also planned the trip during a month (January 2019) where we know our variable spending is typically low or lower. That way we could apply some of our variable spending towards the trip as well.
That gives us $512 in travel credits and $1,000 cash so $1,512 total. We also planned the trip during a month (January 2019) where we know our variable spending is typically low or lower. That way we could apply some of our variable spending towards the trip as well.
So where was our unplanned travel hacking trip, you ask? New York City to see family! Minus the plague of 2019 that hit our family (that hit 6 out of 8 family members), it was a great trip because we were with family. (Plague you ask? A detailed account of this trip is for another post. And you may want to be spared the details of the plague anyways.)
And it was another surprise for our kids. No school! We are headed to NYC. (Have you done any surprise trips?)
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| Surprise! We are headed to NYC instead of school. |
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| Another travel hack? Use public transportation (MTA NYC)! |
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| Do you enjoy the local food favorites when you travel? We always get pizza in NYC. |
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| Andy Warhol exhibition at The Whitney. |
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| Andy Warhol exhibition at The Whitney. |
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| FI: Free public art in the subway system. |
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| Gourmet Chocolate in NYC: Jacques Torres |
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| FI: Walk! We love walking cities / cities with public transportation. |
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| FI Exploring: Bryant Park and the NY Public Library |
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| FAO NYC |
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| FAO NYC |
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| Thank you Southwest. See you next time! (Photo taken by S.) |
Tip
If you intend to use this type of travel hacking, it is a good idea to create a spreadsheet (or whatever makes sense to you) to track the cards that you sign up for along with the bonuses, spending criteria, and fees (if any). This will make it much easier to keep everything organized.
You don’t want to pay fees if you don’t have to, and you certainly do NOT want to pay even $.01 of interest to the credit card companies. You DO want to get paid to use their cards while going about your normal everyday life.
So what do you think? Have you tried travel hacking? What are your favorite travel hacks? Or ... would you try it?
-Erik
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