Travel Hacking Credit Cards: What to Know

If you’re like most people, the idea of going on a free vacation sounds like a dream come true. But for those who have perfected a strategy like travel hacking with credit cards, going on “free” — or substantially reduced — trips is a very real possibility. The key is to understand how to “travel hack” responsibly so that you don’t rack up credit card debt or hurt your credit score. Read on to learn more about how you can participate in this growing trend of earning free travel through the smart use of travel hacking with credit cards.

What is Travel Hacking With Credit Cards?

Travel hacking involves taking advantage of credit card rewards programs and promotions in order to earn free travel which may include flights, hotels, upgrades and more. While travel rewards programs have been in existence since the early 1970’s, the advent of the internet has allowed people to become even more sophisticated about how they use these programs and various promotions to earn free travel.

The basic way travel hacking works is that users search for promotions from credit card companies for the airlines or hotels that they use most frequently, or the ones offering the biggest bonuses. They then sign up for those credit cards, and meet the minimum requirements in order to get the bonus (which usually involves spending a minimum amount within a certain time frame, such as $5,000 within the first six months).

Then, once they have met those requirements and earned the bonus, they can either continue earning miles beyond the bonus with the card, stop using the card, or close the account. Some sophisticated travel hackers open and close multiple accounts in order to rack up the most miles — which can net big rewards, but may ultimately hurt your credit score.

Travel Hacking is Becoming More Possible With Signup Bonuses

The reason that travel hacking with credit cards has become so popular in recent years is because credit card companies are offering increasingly larger signup bonuses to new applicants. For example, some credit cards offer 2 nights free at select hotels or up to 60,000 miles just for getting their credit card — which can be an incredibly attractive bonus for anyone who wants to save on a vacation. 

By combining multiple offers, travel hackers can go on extensive vacations for free or for a fraction of the cost of what the trip would otherwise cost them, smartly using the benefits of the credit cards to their advantage.

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Compare Travel Cards

Capital One® Venture® Rewards Credit Card

• Get 50,000 miles after spending $3,000 on purchases within 3 months from account opening
• Earn unlimited 2X miles on every purchase

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Chase Sapphire Preferred® Card

• Get 60,000 points after spending $4,000 on purchases within the first 3 months of account opening
• Earn 2X points on travel and dining at restaurants worldwide, 1X points on all other purchases

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Capital One® VentureOne® Rewards Credit Card

• Get 20,000 miles after spending $1,000 on purchases within 3 months from account opening
• Earn unlimited 1.25X miles on every purchase

Learn More

The Risks of Travel Hacking – Racking Up Credit Card Debt or Hurting Your Credit Score

Travel hacking is not without its risks, however, especially for anyone who is not financially responsible. Opening up a credit card — particularly one that requires you to spend a certain amount within a specified time frame — can make it all-too-tempting to spend recklessly in order to earn those “free” miles or points. Doing so can land you in significant credit card debt, which can ultimately make your inexpensive or free vacation incredibly costly.

Some travel hackers get around the potential debt issue by doing what is known as manufactured spending. They may purchase cash gift cards, or buy gift cards on their credit cards for stores where they know they will need to shop in the coming months, such as the grocery store. In that way, they can meet their target spending levels without going into debt. Travel hackers should be careful to not run afoul of their credit card contract when spending to get their signup bonus; some companies prohibit the purchase of certain types of gift cards and other types of manufactured spending.

Opening up multiple credit cards — or closing accounts quickly — can also damage your credit. This is known as credit churning, and it is a red flag for many credit card companies. Some companies have instituted a rule where anyone who has applied for 5 cards in the past 24 months will be denied for a new card. Combined with not being responsible with your spending, credit churning can seriously damage your credit score.

Tip: Use a Rewards/Mileage Tracker App

If you are interested in travel hacking with credit cards, using an app can help track your balances and keep you on track of your goals for travel. This is particularly important if you are juggling miles and points from many different airlines or hotels, as they may expire at different times or have different rules for using them. An app can simplify the process for you so you can focus on making sure that you meet your spending goals and other important details.

AwardWallet is one of the more popular apps available for tracking your travel rewards as it supports more than 600 different rewards programs. Its free version allows you to track your balances and the balances of friends and family. You can donate a portion of your rewards to upgrade your account, which gives you the ability to export the information to a spreadsheet. With both versions, you will receive a notification when points or miles are about to expire.

Loyalty Wallet from points.com offers fewer programs than AwardWallet, but it is available for both individuals and businesses. Like AwardWallet, it tracks rewards points and miles across programs, and notifies you if your rewards are about to expire. It also allows users to transfer points or miles between programs so you can book travel more easily by simply moving rewards from one program to another.

Other apps allow you to book your rewards travel more efficiently by finding the best awards flights and hotel rooms. ExpertFlyer searches for airline award seats and upgrades to help you find a flight, while Award Mapper offers a map where you can search for hotels based on your loyalty programs. Both make it far simpler to take advantage of your rewards points and miles, so you can finally take your hard-earned free or cheap vacation!