Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
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You may have heard of the concept called travel hacking before. Basically the idea is using rewards, points, and flexibility to be able to travel for cheap or free.
In all it is an awesome idea. My biggest problem with it is that when you look up travel hacking the top websites all dive into how to get 1,000,000 miles in the first six months or something like that.
If I’m just trying this out, 1,000,000 miles sounds a little too ambitious for me.
So I decided to just start out with one card and one bonus, just to get a feel for the process.
That being said, here is how I flew my family of four for $45 using a flyer miles credit card.
And how the beginning of travel hacking works.
Choosing A Card
I’ve been trying to push for financial independence for a number of years now. And while my wife has been very supportive, she would be the first to say that it isn’t very exciting.
As she started to consider how to make it more exciting she came upon flight rewards credit cards and decided that getting flights would help her keep her interest as we grind towards financial freedom.
So I am very proud to say that she handled this whole thing herself and did a fantastic job.
She started out by making a spreadsheet of the different cards that were available, what the cost of that card is, the bonus points and spending required to get it, and other perks for that card.
Laying it out there in compact format really helped us to choose the right card.
We just had to actually pick one.
Eliminate Cards By Airport
Now that we had all of the most popular flight cards on hand, it was time to start eliminating some.
The easiest way to eliminate cards is by how practical they are to use.
We don’t live in a large city, so our closest airport isn’t serviced by every major airline. We only have about 3 that we can choose from.
For example, since Delta Airlines didn’t fly out of our airport, those cards were eliminated. Simple as that.
Eliminate Cards By Spending
There are two ways to eliminate cards this way.
One, can you spend enough to get their bonus?
Some cards only require you to spend 1 or 2 thousand in three months or so. But others want you to spend 10 or 25 thousand to get the bonus.
If you aren’t going to spend that much money in the course of your regular life or for a business in that time frame then it is not worth it to get that card.
That eliminated a couple other cards for us.
For example, that eliminated the Southwest Performance Business card for us because to hit their two bonuses you had to spend 5K in 3 months and 25K in six months to get their biggest bonus.
I don’t know about you, but I don’t have the much money lying around to spend just to get some bonus miles. So we passed on that one.
Two, do you spend money regularly in their bonus categories?
Every card has certain bonus categories that get you extra flyer miles per dollar spent beyond the standard one dollar per mile.
If you don’t regularly spend on those categories then it might now be worth it.
For example, the United Explorer card gives bonus miles for restaurants and hotels. If you eat at a lot of restaurants or stay in a lot of hotels then that is worth it.
But we don’t, so we opted to look for a card that gives bonus miles on groceries or gas.
Eliminate Cards By Reward
After that you are basically just looking for the best bonus rewards. The difference between a 60K mile bonus and a 50K mile might make the decision for you.
But keep in mind that the amount you spend to get that bonus could balance the difference.
If all else fails, then it comes down to the perks. Do you want preferred boarding? Free checked luggage? Maybe a companion pass?
The perks that matter most to you will be on one card and not the other. That can tip the final scale.
But in the end, it comes down to what is in your current budget and what rewards you can get for the airline you will use.
For us, we chose the AAAdvantage Platinum card. But that doesn’t mean it is the best one. It just fit us.
Getting the Bonus
Once the card arrives it is time to buckle down and get that bonus.
That does not mean go spend money you wouldn’t spend otherwise. But, make the extra effort to put money on that card as opposed to cash, checks or other cards to ensure you hit that spending requirement.
We used a number of strategies to hit our bonus. Some of them worked well. Some, not so much.
First Strategy: Buying “Debit” Cards
I was told that I could get a VISA gift card with the credit card, then turn around and buy a money order, put that money into my bank, and turn around and do it all again to get extra “spending”.
That is not the case. I tried multiple locations for this strategy and they all told me that a VISA “debit card” doesn’t count as a real debit card. So that was a bust.
There might be a way to make that work, but I could never figure it out.
The only way I managed to get my money back off of those cards was to pay my wife through PayPal with them. Naturally they charged me 3% to do so, but I got most of the money back.
The 3% charge is actually pretty small if you are trying to rack up some huge point bonuses, but still, if you can do it with normal spending instead that is definitely recommended.’
Second Strategy: Timing Your Purchases
I knew I needed to spend $2,500 in the first 3 months to get my bonus. I was sure I could do it on regular purchases if I pushed it, but I still had a back up plan.
I decided to start building a tiny house on my property, which can be quite expensive. Just purchasing the shell for the tiny house more that covered the bonus amount.
So by timing my credit card application along with a major purchase I was able to easily get a lot of flyer miles quickly.
Third Strategy: Buying Things On Behalf of Family
I have people in my family who don’t use credit cards. Which can be a very intelligent financial choice.
Because I knew this I offered to pay for a large purchase in advance and have them pay me back. They lost nothing in the transaction, and I gained flyer miles.
Apps like Square Cash and Venmo make this extremely easy to do!
On top of that, this particular family member needed to make a purchase before their next paycheck and I was able to help out, so it was really a win-win.
Offer to pay for something with your credit card and have them pay you back. You’ll be surprised how many people are willing to let you do that.
By combining these three strategies we were able to easily hit our bonus spending threshold.
Picking a Flight
Much like flying with cash, when you go matters when flying with rewards. You can’t get the most exclusive flight or the best time while paying the lowest number of miles. It just doesn’t work.
So if you want to maximize your miles then you’re going to have to be flexible.
For example, we got our actual flights for 14.5K a piece. But to get the flight we wanted (mid day and only a week away) it would have cost us 183K miles or more!
So if you want to fly for free (or really cheap) you need to find the flights that will give you the best possible travel for the least possible miles.
That usually is redeye flights or terrible layovers. We chose not to do that because we have small children, even though we could get flights for only 7k miles that way.
What you do is up to you. But a decent flight on a flexible day will cost between 14K and 25K in miles with American Airlines it seems.
We chose an earlier morning flight and a later return flight.
Now the bonus covered all three of the tickets we purchased (we have a child under two that doesn’t need a ticket) but we were only 4,000 miles away from being able to afford four total tickets. So it is very doable in a short time period.
Total cost for the flight was just over $45 because we had to pay for tax.
Total cost without miles would have been more like $600.
That is a frugal win!
Things To Look Out For
When starting out using miles to travel it is very easy to get caught up in the grandiose idea of flying for free.
Please keep these things in mind because it isn’t actually free.
First, we had to pay tax. While $45 for a flight is a ton better than $600, it was still an expense to be paid for.
Second, we had to buy things to reach the bonus and the miles. While this seems a given, it is really easy to think “That is a great bonus, we should buy that!”. But that is the trick.
Don’t buy stuff you don’t need.
We almost bought a security system we didn’t need because the bonus was so good. It is the trap of bonus miles.
Third, the moment you start to carry a balance on a miles credit card is the moment it becomes useless. Paying the 20% interest rate on a card makes racking up miles basically worthless.
Fourth, there is an annual fee for pretty much any miles card. The card we chose has a $99 fee after the first year which is free.
If you’re not going to use it enough to keep getting the miles you’ll have to cancel the card before then OR that $99 fee will undo all your hard work to travel for free.
Flyer miles rewards cards are an amazing thing for people who can manage their money well. But they can be a trap, as with any credit card, if mismanaged. Don’t fall into the trap.
I’m excited to continue exploring travel hacking. Here’s to more cheap trips to come!
How have you used flyer miles successfully? What worries you about using flyer miles? Tell me about it in the comments below?
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A list of definitions used on this blog can be found here.
Travel Hacking: The process of using rewards and bonuses to your advantage to travel for cheap or free.