Tuesday, October 18, 2016

Travel Hacking

This post has been a long time coming but I’m finally getting around to making it. For you who aren’t aware of the world of Travel Hacking (i.e. making credit card companies pay for your travel expenses), I wanted to introduce you to the concept and give you some info to get you started. For those who already know about it, hopefully I can help expend your knowledge on the subject.

We don’t do a lot of traveling in our family and if we do we choose to drive since it seems to be cheaper and easier than flying with all of the family. But when my uncle invited me to climb Mt. Kilimanjaro with them it became apparent that I would have to buy my first airline ticket in almost 6 years. But the cost of the ticket to Tanzania was a pretty big barrier for me to get over. With just under a year before the trip I started looking to see if I could find the cheapest fight option possible. This is when I first learned about the world of travel hacking.

Long-story-short I was able to save at least $1,156 on the plane tickets by taking some time to research and plan out how to travel hack.

The journey began when I stumbled upon Brad over at RichmondSavers.com. Brad has established himself as the travel hack expert of the universe and set up this site to offer FREE advice, courses, tutorials, and one-on-one help to people who want to learn more about travel hacking. Kinda like a modern day Robin Hood.  *Note: If you use his services please make sure to sign up for your cards by using his affiliate links since that is how he makes his money which allows him to provide his services free of charge to you.

Step 1: I got in contact with Brad through his website and filled out the simple questionnaire that he uses to find out about your travel needs. I informed him that I was looking to travel hack my way to Kilimanjaro and back in about 10 months. Two or three days later I received an email from Brad with a link to a video that he had recorded for me where he walked me through an individualized set of recommendations and a strategy that would allow me to easily make my goal. At that time the easiest way for me to rack up the 80,000 travel rewards points that I needed was to sign up for two credit cards. The United MileagePlus Explorer Card and the Chase Sapphire Preferred Card.  

Step 2: I signed up for the United card since it had the lower amount of money to be spent before getting the bonus miles. If you spend $1,000 in the first 3 months after getting the card they will give you 30,000 bonus miles. Plus they give you 5,000 miles for adding an authorized user and 1 point for each dollar you spend. Since my auto insurance bill was coming up I was able to easily meet all of the requirements and cash in on 36,000 points in the first month.

Step 3: I then signed up for the Chase Sapphire card. This one was a little more tricky since I had to spend $4,000 in the first 3 months to get the 40,000 bonus points they were offering at the time. Since we don’t spend nearly that much on a card in a typical quarter I ended up working out a plan where I used my new card to pre-pay my electric bill for the next 2 years then a few months later I called them up and asked if they could liquidate the $3,600 credit on my account and send me a check. They did since I hadn’t broken any of their rules but it didn’t sound like they were too happy about it (I had research this plan out by talking to their customer service reps before trying it out).  This allowed me to get 40,000 bonus miles, 5,000 for adding an authorized user, and 4,000 for the 1 point per dollar spent reward – for a total of 49,000 miles. 44,000 of which I had to transfer over to my United account before I could use them.

Step 4: Armed with 85,000 reward miles I then set about booking my tickets. I was able to find pretty good flights for the days that I needed. All of them had fees associated with them that the reward miles won’t cover so I ended up choosing the ones with the least fees associated with them. I ended up having to pay $125 for the fees but that turned out to be less than 10% of the price of the cheapest tickets that I would have been able to find otherwise.   

Step 5: Board the plane and have an awesome adventure!

Step 6: A month or so after returning home I called up the two credit card companies, redeemed $50 in cash for my 5,000 unused miles, and canceled the cards. I didn’t need (or want) them after the trip and I wasn’t about to pay the $95 annual fees that would start being applied on the 1 year anniversary (the fees for the first year are waived).

One concern that you might have about this though is what it might do to your credit score. I was a bit concerned myself about it having a negative impact on my credit to go out and open two new credit cards in a 2 month time frame then close them a few months later. Since I knew that I wasn’t going to be needing to use my credit anytime soon though, I figured that is was worth the risk. However, if I had been planning to buy a house or something like that in the near future I would have probably played it safe and foregone the idea. But, much to my surprise, it actually helped my credit score! When I started the process my credit score was showing up around 743. Because of the additional available credit I got from the new cards it jumped up to around 768 a few months later. And after closing the accounts it went up to about 780 where it’s lingered for the past several months.

Would I do it again? Absolutely! While it did take a bit on planning and effort to pull it off it saved me an entire 2 week paycheck, and cost me much less than 80 hours worth of work. I thought that it was a wonderful solution and I wouldn’t have been able to justify the costs of climbing Kilimanjaro if it hadn’t been for travel hacking.

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