There are several ways to travel cheaply. They include using sites like Priceline and Hotwire to get discounted airfare and hotel stays. There are also sites like Trip Alertz, TravelZoo, and Groupon which offer discounted package deals to a variety of locations. But the best way, by far, to achieve cheap or free travel is through the accumulation of airline miles and hotel points. And the quickest way to do this, especially if you do not travel for business, is to get incentive bonuses by signing up for credit cards.
Now, getting started in the credit card bonus hobby is not for everyone. If your credit is not very good – excellent, this hobby is not for you. I would recommend getting your credit in order and then embarking on this journey. Secondly, if you are in the market for a major loan (car, mortgage) within the next 18 – 24 months, I also would sit this out until the loan is in place. Applying for credit cards show up as credit inquiries on your credit report and several inquiries could hurt you when the bank is reviewing your loan application. Lastly, if you do not pay your credit card off in full each month, I would not recommend opening additional cards until you are able to pay them off in full. Adding more cards to the mix with balances on them is never a good idea. But, if the above doesn’t apply to you, I highly recommend getting into this hobby.
When I tell people about how my family has achieved free travel through signing up for credit cards, I get a lot of concerned looks and questioning comments. Some think it must be illegal in some form, others think it is credit suicide. I can say after pursuing this hobby for a while, neither of these are true. While your score will go down slightly with credit inquiries, the drop is minimal and temporary as long as you pay your bills on time. If you have a solid credit score and are not pursuing any loans in the near future, you are wasting this precious resource you have built for yourself over time. Leverage your credit score to your benefit instead of just letting it sit there.
There are some general guidelines that I recommend when applying for credit cards. If you’re interested in pursuing this full speed ahead, I recommend signing up for 3-4 credit cards every 3+ months. That may sound like a lot, but believe me, there are a ton of really great offers out there that can help you accumulate a large balance of miles and points to be put to good use. As part of each of these sign ups, I recommend signing up for just one card per bank (Chase, Citibank, Barclay’s, for example) per round.
Full speed ahead just may not be within a lot of people’s comfort zone, however. For those people I recommend signing up for just one card. Try it out. See how it goes. My hunch is you’ll realize how easy it is and jump in with both feet, but even if you only want to sign up for a few cards a year, you can still get a lot of free travel.
To put this in perspective, I thought I’d give a snapshot of where my family will be traveling over the next 12 months, using airline miles and hotel points received through credit card sign up bonuses:
• A week in St. John, US Virgin Islands – free airfare and free hotel (family of four)
• 8 days in Scotland – free airfare + taxes (family of four)
• 4 days in Las Vegas – free airfare (family of two)
• 10 days in Hong Kong and Bali, Indonesia – Free airfare in business class + taxes, free hotels (family of two)
• 6 days at Walt Disney World – Free airfare, free hotel using timeshare (family of four)
• 7 days in Kauai, Hawaii – Free airfare, free hotel in suite (family of four)
This is a lot of travel, even for us. Unfortunately, we had to use our British Airways miles sooner than we had hoped because of a major change in the British Airways program.
We achieved this travel through signing up for 7 credits each (me and my husband) over the course of about a year. You’ll see that although you can travel for free using airline miles, you still are responsible for the taxes. In many cases, that means $5 per ticket. In other cases, (like when travelling through London) that can mean $175 per ticket. Regardless, the out of pocket costs to you is minimal when compared to what you would pay for a full price ticket.
In the end, it’s up to you to decide what you’re comfortable with. I hope by sharing our story, you can see the benefits of taking advantage of your great credit score to allow you to travel almost for free. Keep in mind that if you are a family of only two, the above examples could likely be in business or first class for you as you don’t have four tickets you need to cover. It really is amazing what a little effort can get you.
Future posts will be dedicated to recommended credit cards and advice on how to best use the miles and points you receive to get the most bang for your buck. Please feel free to ask any questions. I do ask that you do not disclose any personal information about yourself or my family in the questions because it is a public site. If you have a personal question, please feel free to email me directly. I hope that you’re motivated to get out there and see the world! It’s an amazing place!