For me, there is really no greater feeling than traveling for free. I tell people the places we’ve stayed and the flights we’ve taken, all for next to nothing and I’m pretty sure a majority of them think I’m full of it. But I always tell people that you should give every single thing in life a chance, no matter how crazy it sounds. Traveling around the world for free is one of those things that sounds too good to be true but it’s very very possible. Today, PF Pro contributor, Kali Hawlk takes a look at how you can take advantage of 1-2 credit cards a year and score some mega savings. I might have to copy her trip too since we’d like to go to Machu Picchu some day 🙂
One of my favorite discoveries after starting a financial blog: travel hacking.
The thought of having credit card companies essentially subsidize something I’m passionate about — travel — was one of those “got to to be too good to be true” deals at first. But I quickly learned that there really wasn’t a catch, so long as you didn’t spend more than you normally would and paid off your credit card balances on time and in full.
This was the perfect deal for me. I enthusiastically started travel hacking late in 2013 for my first overseas trip ever, when we went to Dublin, Ireland and Scotland in April 2014. With taking out just one Barclay World Arrival credit card and strategically putting purchases I needed to make anyway on the card (think car repairs and Christmas gifts), I was able to rack up enough points to save me about $700 total.
I was thrilled with the savings, but I knew people like Harry were getting way more bang for their credit card churning habits. I decided for our next overseas trip I wanted to do the same — but I’m still cautious. The thought of taking out five different cards (and getting my spouse to do the same to double the points) makes me a little nervous.
And I know lots of other folks feel the same when it comes to racking up the credit card rewards and churning products to get the bonuses. They may want to take advantage.. but the thought of managing a gazillion cards and even manufacturing some spending is overwhelming.
I fully recommend experienced travel hackers read posts from Harry on this subject (or head over to read his writing on Richmond Savers, another great source of travel hacking information). But if you’re still easing into the world of travel hacking, I hope this post will be a little more your speed.
Don’t be afraid to take my approach: slow and steady with lots and lots of reading and incrementally working your way up to serious savings via credit card rewards!
Let’s walk through how we’re travel hacking our way to Peru next spring, using just two new credit cards.
Mapping Out a Plan
The first step for us was deciding:
- Where we wanted to go
- What we wanted to see once we were there
- How we wanted to get there
Our 2014 trip took us to a cold and (relatively) expensive couple of cities with Dublin and Edinburgh, so we decided we wanted to go somewhere warm and cheap for 2015. The first place that popped into my mind: Peru.
(It’s pretty easy to choose a place to go when you want to go everywhere. Anything would sound good to us!)
Then it was time to decide what we wanted to do and see within Peru. Lima was on the list and Cusco and Machu Picchu were musts, as well. Ideally, we wanted to see the Ballestas Islands, some cities in the north of the country, Arequipa, and Puno and Lake Titicaca, but with only 10 days we had to narrow down our stops.
We decided on Lima, Puno and Lake Titicaca, and Cusco and Machu Picchu. That decided how we were getting there: the best option was to fly in and out of Lima.
Next was choosing the best credit cards for the expenses we planned on racking up with flights and accommodations.
Travel Hacking the Flight
Once we decided Lima was our starting and ending point for the flight, we searched a few different sources to check out what airlines offered the most convenient flights. After a stressful, no-fun experience flying up to New York in order to fly to Dublin and back with Aer Lingus (because Aer Lingus does not fly out of Atlanta, and trying to fly direct from Atlanta to Dublin was insanely expensive for some reason), I wanted to stick with an airline I was familiar with — and I wanted a nonstop flight.
Did this give us the cheapest options? Nope, but after traveling extensively domestically and experiencing my first big overseas trip, I tried to keep in mind lessons learned. One of those lessons is that flying nonstop, directly to and from my destination makes me a whole lot less grumpy, tired, and already done with people before the trip even begins.
Again, we fly out of Atlanta and it seemed like the only two nonstop options we had were overnight flights with Delta or Spirit. We chose Delta because it was familiar and we’ve always had a better-than-average experience with them — and because my spouse already racked up some Skymiles from his work travels.
This was not the absolute best option in terms of maximizing our travel hacking opportunities. Delta is well-known for devaluing their points, causing experienced hackers to scathingly refer to them as SkyPesos.
I now see what they mean: 2 roundtrip tickets from Atlanta to Lima will run me about 140,000
pesos points. If I paid in dollars, the cost would be about $2,000.
Here’s how we plan to get as close to that number as possible to reduce our cash-out-of-pocket cost of the flights:
- Sign up for the Delta AMEX, which gives us 50,000 points after spending $1,000 in the first three months (I believe the regular offer is a little lower, so we took advantage of a special they offered).
- Book our flights within 3 months of getting the card, which will give us an additional $50 statement credit.
- Combine our existing Skymiles. We’re now up to 60,000 points and $50 off.
- Strategically plan November and December’s spending around this card.
- Manufacture some spending by paying for family member’s big upcoming purchases (we put the purchase on our card and get the points and family member gives us a check for the purchase amount)
We won’t get to the required 140,000 points for totally free flights, but it’s worth it to me because I plan on getting at least halfway there. I’m happy with a 50% off flight and only one new card to get there.
Remember, this is a slower-paced form of travel hacking, meant for newbies like me who A. want to keep the amount of credit cards under control, B. are satisfied with steep discounts (and aren’t necessarily working towards getting 100% free tickets or hotel stays), and C. aren’t willing to go to extreme lengths to get the cheapest flights/accommodations to really stretch out the points.
Paying for Accommodations and Everything Else
That’s one credit card down — the other we’re using to travel hack our way to Peru will be a second Barclay World Arrival card. I took one out but my spouse never did, so it’s his turn!
With the Barclay card, the signup bonus gave us $400 worth of statement credits for travel expenses — which turns into about $440 considering you get points back on the card when you redeem them for travel. We also went through a similar process with this card that we plan to do with the Delta card: we strategically planned our spending around it, and volunteered to put family members’ big purchases on the card as well.
(It’s probably good to note here that I’m not just trying to take advantage of my unsuspecting family and cut them out of the rewards; I’ve offered many times to help them get started with their own travel hacking and they always decline, saying they’re perfectly happy to help us get the points instead.)
We plan to have about $700 worth of statement credits for travel expenses on the Barclay card before booking accommodations and any tours, which will probably only be at Machu Picchu if we do any at all.
One of the biggest reasons we’re satisfied with this baby step approach to travel hacking is because once we’re at our destination, we’re pretty cheap travelers. Most of our activities include extensive self guided walking tours, taking photos, eating, and drinking — so we really only need to pay for meals.
That brings our predicted savings amount up to about $1,700 or so — not bad for just opening two new credit cards! And we can potentially save more if we dive deeper into some manufactured spending techniques (i.e. buying gift cards with the credit cards, or using WalMart’s Bluebird system).
We’re guessing our total out-of-pocket spend for the trip will be another $1,700, so I’m really satisified with a 50% savings.
Author Note: Brad from Richmond Savers shared this great link with me after this post was initially published, and I wanted to share it with you here in case you were interested in even better savings via travel hacking. Check out the article here.
What do you think? How do you prefer to travel hack — cautiously like us, or do you dive in and try to get as many free flights and hotel stays as possible
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-Kali @ PF Pro