Travel Hacking 101: What Is Travel Hacking?

We are big believers of mastering the BIG expenses that take up a majority of your annual expenses and then not fretting too much over the smaller things. What do we mean by that?  If you can significantly reduce your larger expenses, then go ahead and get that latte, or catch up over lunch with a friend, or indulge in the massage if it genuinely brings you joy.  If you are spending money here and there infrequently and in moderation, you will see these one off expenses as a TREAT rather than a norm and truly appreciate the value of them more.

Typically your three largest annual expenses are in the housing, transportation, and food categories which is what made up our Master The BIG Stuff Series.  We’d like to focus on another expense category that tends to take up a large chunk of change but doesn’t have to:

Travel.

And how does one master traveling?

Travel Hacking

What is travel hacking you ask?

Travel hacking is more of a buzz word than anything.  The truth is, there aren’t “hacks“.  Instead, there are tools and strategies out there that you can deploy to travel for nearly free.  There is nothing illegal or shady here.  So while we use the term “travel hacking”, note that the more appropriate term is “miles and points collecting”.  Other pseudonyms for utilizing credit card rewards for travel are “credit card churning” and “award travel”.  It’s all pretty much interchangeable.

Travel hacking is the art of collecting frequent flier points and miles to get nearly free flights, hotels, car rentals, and more.  It’s more than finding a “deal” online.  It’s a side hobby that you can use to significantly reduce your travel-related expenses.  Typically you can use points instead of the airfare cost and only have to pay the taxes – meaning you can fly across the globe for a FRACTION of the cost compared to purchasing the ticket outright once you figure out the ideal strategies.

Those of you who follow other FI content creators have likely heard about this ever-growing and popular hobby as it’s yet another way to gamify life by cutting expenses without depriving yourself of experiences. And it likely will lead to some life changing experiences along the way to your FI number.

My Introduction to Travel Hacking

Growing up, I would travel within Florida and across the US for various hockey tournaments (typically with a teammate) but travel was not something my family did together frequently.  Thank you mom and dad for providing my brother and I with the insanely expensive sport of travel hockey!  I took my first trip overseas in 9th grade with my family to London and Paris and that was the first time my mom had ever left the US.  I then did a term abroad in college in Florence, Italy where I was bit by the travel bug.  Big time.  During that term abroad I also visited Spain and Ireland.  I decided to write my senior economics thesis on travel and tourism trends.  I became hooked on traveling and it was my number 1 passion in my 20s.  Thankfully, one of my co-workers introduced me to the world of travel hacking back in 2010 and it has saved me tens of thousands of dollars in flights, accommodation, and transportation and allowed me to visit over 25 countries plus all over the US and Canada without breaking the bank.

We don’t spend extra money, take special trips to earn more points, or get into debt. We do this with our normal everyday spending.

You may be a bit skeptical when reading this and think it sounds too good to be true.  Or that it sounds too complicated and time-consuming.  Or that you have to spend a lot of extra money to make it work.  Is there a catch?  There has to be… what’s the catch?!

It wasn’t until I was sitting on the first free flight that I earned through my regular, everyday spending that I realized this was real.  And replicable.  And my credit score remains well above 800 points to this day.

Think about the next trip you want to take (in a post COVID world). Maybe it’s a solo trip around the world, a family vacation, a honeymoon with your loved one, or a trip to see your parents.  Travel hacking will help you get there by reducing the costs of your travels to nearly zero.  It’s really pretty insane when you think about it.

Be warned, the more you research the more intimidated you may get.  We are hoping that after this intro series you will have the confidence to try it and recognize the world of travel rewards is learn as you go, just as personal finance is.  Just as there is no cookie-cutter way to FI, there is no cookie-cutter route to travel hacking.  A lot of it depends on your location and where you are trying to go.

How Does Travel Hacking Work?

Ok here we go.  The best and fastest way to accumulate points is through credit cards.  Here’s the quick and dirty.

1. Sign up for frequent flyer accounts with airlines (for free)
2. Sign up for credit cards in which the points redeemed can be transferred to your preferred airlines
3. Meet the required minimum spend to get the sign-up bonus
4. Transfer points to your travel partner of choice (if applicable)
5. Cancel credit card before annual spend comes up (depending on the card, most have annual fees that you can avoid)
6. Book award travel with points instead of miles (and only pay taxes)
7. Enjoy your incredibly low-cost flight
8. Rinse, wash, and repeat

While we were much more avid travel hackers in our 20s pre-baby, we are going to provide several travel hacking posts geared towards beginners to hopefully get you started on your journey.  We will end this Travel Hacking 101 Series with a list of our favorite travel bloggers out there and helpful resources/websites to help you become a travel hacking pro too.

To provide some context, as mentioned before we’ve been to over 25 countries and have been all over the US and Canada.  We also currently have over 1 million travel points in our travel “bank”.  Typically, between Nic and I, we sign up for 4-5 cards per year.  And as of this writing, both our US and Canadian credit scores are above 820.  So while I would not consider ourselves experts as we do not do this full time, we do have a good hang of how it works.

Of course, you can decide how many credit cards you want to apply for in a given year.  Typically the points from a good card in the States will come with 50,000+ sign-on points and a good card from Canada will come with 25,000+ sign-on points.  Depending on the airline and awards program, a round trip flight within North America is ~25,000 points and a round trip flight to Europe is ~40,000-60,000 in economy.  So when you stack these bonuses together you can put together entire trips with airfare and hotels included.

Typically the US banks offer the most lucrative travel rewards out there and fortunately, we are still able to sign up for US credit cards so that’s the bulk of our bread and butter but readers from Canada (and elsewhere) can apply many of these principles as well, the deals may just not be as juicy.  If there are other countries out there where travel hacking through credit cards exist, let me know!

What Is The One Single Thing People Can Do To Earn More Miles?

“Give me six hours to chop down a tree, and I will spend the first four sharpening my ax.” – Abraham Lincoln

To my knowledge, Abraham Lincoln was not a credit card travel hacker (ha), but his quote highlights the importance of preparation.

If you are interested in starting travel hacking and getting more miles, being organized and keeping track of your personal finances needs to be priority numero uno!

Why?

Rewind to 2010 when I was first introduced to travel hacking.  I had no clue what my credit score was.  I’ve always kept track of my spending but didn’t realize how important your credit score is for travel hacking.

So what’d I do?

I sharpened my ax, and got my finances together.

Over the next few months, I created organizational spreadsheets (that I still use to this day).  Keeping track of my expenses was a double win as now I could apply this practice one step further where I would track my expenses broken down by credit card to see when I reached the required minimum spend to receive the large point bonus.

As I equipped myself with the knowledge of responsible credit card use, I watched my credit score begin to improve.

And I also was taking a keen awareness of my spending which lead me further along in my FIRE journey before I knew I was even on it (this was all before discovering Mr. Money Mustache and the concept of FIRE).  Knowledge is power.

When I was approved for my first card I was excited (this was back in the day of 100,000 point bonuses) but still hesitant of the whole process.  Once I reached the minimum spend and saw the points in my account, I was pumped but still hesitant.  I was finally hooked when I did more research to determine how to actually turn those points into a reward flight and booked a round trip flight to Europe for 40,000 points.

Some people get hooked right away and apply for 5-10 cards within the first year.  Others are more cautious and only apply for one card and wait a year before doing anything else.  There’s no wrong or right way to it.  Just do what is comfortable for you. But remember to stay organized!  If you are not willing to put in a few hours a month to remain organized, then this endeavor is not for you.

After getting acquainted with my shiny new card, I spent every penny I would normally spend using it.  I paid my balance off in full each and every month, and I watched my credit score rise as I planned how I would use my points.

Closing Thoughts

A lot of people get bogged down in the details of travel hacking, but it honestly doesn’t have to be that difficult! I am 100% convinced that with minimal effort, just about any financially responsible person can take 1-2 nearly free vacations every single year just with this one small, but important life hack.  It will take some reading and education to feel comfortable to dive in, but once you do, you can literally earn a flight in under 15 minutes by signing for the credit card of your choice and spending on it vs your previous payment method.

We hope this intro post got you excited to learn more.  Stay tuned for more travel hacking posts shortly 🙂

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We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)
• How much are you paying for your monthly utility bills?  See how you can likely save on this monthly expense.

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