How to Travel for Free – Credit Cards (Part 1)

February 16, 2014 by

How to Travel For Free – Credit Cards 101

This is the #1 question that people ask us.  How do you afford to take so many trips each year?  How do you travel so cheaply? Can I do it too?  Yes, you probably can.  It does take some time and effort to learn the basics, but once you start it can be hard to stop!  In this post I am going to talk this through for you newbies out there in the most step-by-step way that I can.  It will take more than one post to go over everything related to travel credit cards, so I will keep writing installments until I have bombarded you with too much information.  Please feel free to ask any questions & I will answer if I can.

What are travel credit cards?

First things first…what are we even talking about here?  What are these travel credit cards you are talking about all the time?  There are tons of different banks that issue credit cards (ie Chase, Citibank, US Bank, Barclays, and more).  They partner with different companies to offer many different types of rewards.  Do you ever go to a store & the cashier asks “would you like to save 10% on your purchase today by opening our credit card?”  Same idea, except instead of getting $30 off of your $300 TV, you can often get a thousand bucks worth of free travel for each card you get.

As an example, Chase Bank has hotel cards from Hyatt, Fairmont, IHG, Marriott, Ritz Carlton and Disney.  One of my favorite types of points to earn are the Chase Ultimate Rewards points & they have cards that earn these as well (Sapphire, Ink, Freedom).  All of these banks have relationships with the various airlines and hotels, plus there are other kinds of ways to redeem for travel as well (I will cover that in another post).

How do I get one of these rewards credit cards?

Finance is not my area of expertise, so I am not going to claim to know exactly how one person gets approved for a credit card and another doesn’t.  Obviously things like your credit score, income, and debts are calculated in some kind of super actuarial formula & you are either jumping up and down for your potential vacation or you are doing the credit card walk of shame.  Luckily we have been on the free vacation end of things.  What we do is pay our bills and have incomes.

Here are the things I should probably say:  pay all of your credit card bills in full, don’t jump in too quickly and apply for fifty million credit cards all at once, check your credit score before you apply, realize that an application drops your score by a few points temporarily; therefore, be mindful if you have something credit-y coming up soon like a refinance, new mortgage, or loan application.

You can find the different online applications for these cards all over the internet.  The important thing to keep up with would be the current bonuses for each of the cards that you are interested in.  They change often, and there are also different links to the same credit cards floating around at times.  For example, there may be a link (the thing you click on to get to the credit card application page) for an 80,000 bonus point IHG credit card.  There may also be a link for a 60,000 bonus point IHG card.  You will get the bonus points for whichever of the links you click on in order to do the application.  Obviously you would want the higher one.  There are some cases when you may want a lower bonus (if there is a lower minimum spending requirement, for example).  This will all be dependent on your individual situation.

What do I have to do to get the Points & Miles?

Sell your first born child?  Not quite.  All of the cards will have some kind of requirement you need to meet in order to get your big bonus.  Some are very easy (like getting your bonus miles after your first purchase of any $ amount).  Others are more difficult if you are not a big spender (like spending $5,000 within the first 3 months).  You have to make the judgement about whether or not you can fulfill the spending requirement, especially if you are applying for more than one card at a time.

Once you complete your spending, the bonus points will appear in the Frequent Flier/Hotel Loyalty account you created and added to your credit card application (see here about doing that) at some point – these can be posted at different points within your billing cycle for different cards.

In addition to your bonus points for signing up, you also get points per dollar spent.  Some cards have a set amount (like 1 point per $1 or 5 points per $1), and others have special categories (like 2 points per $1 for gas, groceries, etc).  Most will also give you lots of extra points for using their card for their own products (for example, my Club Carlson card gives me 10 points per $1 spent at their hotels).

Is this too good to be true? A scam?

We have been doing this as a hobby for over 10 years now, probably closer to 15 years.  While things have changed a lot (bonuses go up and down, minimum spends change), this has been working for my family for ages.  It is a real, legit thing.  The credit card companies are giving you all of these points and miles because they really want certain people to sign up for their cards.  That’s really the bottom line.

This is an example of some of the bonuses we have gotten over the years:

100,000 British Airways miles (redeemed to go to Hawaii)

100, 000 American Express Membership Rewards points

$1100 in free travel from Capitol One

50,000 Southwest Miles (times a few)

75,000 American Airlines miles (times a lot)

2 free nights at any Hyatt

2 free nights at any Hilton

2 free nights at any Fairmont

80,000 IHG points plus a free night every year

and so much more……

Please continue to follow, as I will add more posts to this series with more free travel tips!