A Beginner’s Guide to Travel Hacking
Traveling the world is still, and always will be, high on many people’s priorities. Weddings, honeymoons, travel, education, showing off on their Instagram accounts — there are so many reasons people want to see the world. Unfortunately the reality of high costs keeps most people grounded.
We all know of airline rewards points and miles. You probably have your name attached to one or two now. It’s easy to be dismissive of these rewards programs as most people rarely see a return from them, but the truth is if used properly they’re an amazing way to see the world without breaking the bank.
Today we’re going to give you a quick primer for how to get the most out of the system.
FIRST, HAVE A PLAN
We cannot overstate the importance of this. It should be obvious, but so many people forget this step it needs to be said.
The main reason most people don’t see any real returns from their frequent flyers rewards is that they don’t have a clear plan of what they want to get out of it. “Travel to some place at some time” really isn’t good enough: systems change over time, not all systems’ points are worth the same amount, and what frequently happens is people have half a dozen reward systems that they spread too thinly and don’t keep track of.
Start with a clear idea of where you want to go and when. Your friend has a wedding, you really want to see Japan in Winter, Oktoberfest in Germany is on your bucket list. Having a where and when allows you to research the best reward program for your trip and make sure you use it in the time you have. There’s no point putting a lot of time and effort into a trip that gets you to Japan if your goal is Oktoberfest, and no point getting to Europe if your goal is to watch the sakura blossoming.
For a long time the only real way to earn frequent flyer miles was to be a, well, frequent flyer. Today there are another popular option, either for those who aren’t frequent flyers or just want to earn more points: co-branded credit cards.
Signing up for a co-branded credit card from an airline also signs you up to their frequent flyers program if you aren’t already. They typically have a sign-up points bonus and every purchase made with the card goes towards your miles. There are also bonus points at certain times — 5x points if you buy X item from X location within such-and-such date range — that can really boost your earnings. Combining actual flight miles, say if you already travel a lot for business or do small local trips, with the credit card is an obvious, quick way of racking up a lot of points very quickly.
Airline miles are technically transferrable between accounts — usually for a cost — but what many people miss is that miles can be spent on tickets for someone other than the account holder. For example, if you’re going on a long business trip and want your significant other to join you, you can buy their ticket using your own miles.
All that said, one downside to airline rewards is there’s not a lot of flexibility with them as the points all go back to that airline and their program partners. Be sure that the airline is actually going to be able to take you where you want to go, when you want to go: there’s no sense getting ten thousand miles on a program that doesn’t get you to your destination.
Hotel rewards function pretty much the same way as airline rewards — stay in their hotels, or use their co-branded cards to gain points.
Hotel rewards have one major benefit over airline rewards: flexibility. Most hotel reward programs are linked to multiple airlines as well, allowing you to use your points either for accommodation or flights. Transferring points to a partner is usually free, meaning two people can spread out the points earning and consolidate later if they need to.
Different programs obviously partner with different airlines and have different point sharing rations — some are 1:1 from your hotel rewards to airline rewards, some are not. As always, choose the one that suits your situation best.
CREDIT CARD REWARDS
When it comes to ease and flexibility, not much beats credit card reward programs. Sign up bonuses typically give you thousands of miles travel for free. Points are usable not just for travel and accommodation, but other travel expenses that are easier to forget — like eating.
There are too many credit cards and individual rewards programs to cover here. Instead, here’s a quick list of things to be on the lookout for when considering an offer:
- Sign up bonus: These are typically given in either points or miles, and obviously the more, the better. Shop around when looking at the various cards on offer and keep an eye out for special sign-up deals that inevitably pop up throughout the year.
- Benefits provided: Some cards will provide a bonus for something that you’d normally have to pay for, like free checked baggage on a flight. Others will provide bonuses for things that you’d like but normally would shy from paying for due to cost, like some form of insurance – for purchases, car rentals, tickets, etc. It’s easy to dismiss the value of something you don’t normally pay for anyway, but ask yourself — do you actually think you don’t need it, or are you just trying to save money by not getting it?
- How valuable are the points?: Not all rewards points are equal. If you’re getting a credit card to get rewards points then you’re going to want to use the card a lot and you’re going to want to get a lot out of it. Consider two systems: One has an annual fee of $50, the other has no annual fee. The first gives you one point per dollar spent, the other gives you one point per $10. The first system can get you to X location for 4,000 points, the other 2,000. The second seems like a good offer — no sign up fee, half the points needed — but you’re spending $20,000 to get somewhere the other system gets you for $4,000.
- Does this get me where I want to go? This all comes back to the original plan you’ve hopefully set. Do the rewards this card gives you actually get you to where you’re trying to go? No matter how valuable each point is or how flexible the system might be, there’s no sense racking up a million points in a system that doesn’t get you to your destination.
TYING IT ALL TOGETHER
The last piece of advice is this: You don’t need to be exclusive. Mix and match programs to get the best possible combinations of rewards to suit your goals.
Say you’re a frequent business flyer and you use a certain airline. Instead of getting that airline’s co-branded credit card, get a hotel reward card that partners with that airline. That gives you some flexibility — you might still use the points for that airline, or you might find another airline with a lower price for the same trip.
Similarly, some credit card reward programs heavily favor online shopping through certain retailers. This card obviously might not be ideal for your every day purchases, but would be useful to have for all of your online shopping to get the most points out of that system.
By having a goal, doing your research, and using programs that complement each other, you’ll find traveling the world has never been so affordable.