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  • Writer's pictureCrystal

Travel Hacking FAQ

Updated: Jun 24, 2023

What is travel hacking?

Travel hacking is the practice of strategically accumulating "reward points" from banks, airlines, and hotel chains, and using those points to travel at a reduced cost... often for nearly free! The majority of travel hacking points come from credit card sign-up bonuses (SUB), which are a large number of one-time points "gifted" to you for opening and using a new card.

Is this legit?

Yes! It almost seems too good to be true but it's totally legit. Credit card sign-up bonuses and loyalty rewards points attract new customers, the vast majority of whom are not travel hacking. It's worth it for the banks and airlines to pay out free travel for those of us who do, especially when we start telling friends and they become new customers.

Does it work for everyone?

No. Travel hacking does not work if you spend money you wouldn't have spent just to reach a sign up bonus, if you cannot pay off your statement each month and therefore incur interest, or if you miss even a single credit card payment. At that point, your "free" travel is no longer free. Travel hacking works when you are only paying for things you'd pay for anyway and you can pay your full credit card balance off at the end of each statement period before the due date.

Also, if you will be applying for a home loan in the near future, now is probably not a good time to open a bunch of credit cards.

Does it negatively impact your credit score?

No, not if you pay your credit card bills on-time and pay off your statement balance each month. This is largely because your credit utilization makes up a significant percentage of your overall credit score. As you open more accounts, your total amount of available credit increases and the percentage of that credit that you're actually using at any given time decreases. Your credit score may even increase with travel hacking as a result.

When you open a new account, banks will do a hard pull on your credit, which may drop your score by a couple of points and the hard pull will show up on your credit report for up to 2 years. Even still, we've been able to maintain 800+ credit score while racking up $15,000 in free travel in the past year!

Note: initially, I was paying off our balance before the statements closed and that did drop my credit score about 30 points, because it looked like I wasn't using any of my credit. Once I started waiting for the statement to close and then paying the balance in full, my credit rebounded to above 800.

Is it worth it to open cards with an annual fee?

If you're earning and using travel rewards to their potential, absolutely. As I said, we booked about $15,000 worth of travel in our first year. In that time, we paid $677 in annual fees. Obviously as you open more accounts, this annual amount will increase unless you downgrade or close accounts over time.

Some cards also have perks that may "erase" all or part of the annual fee, like free TSA Pre-Check or Clear registration, free travel insurance or trip delay insurance, hotel credits, airport lounge access, free night hotel awards, etc.

Do you close your cards after you earn the sign-up bonuses?

No, not right away anyway. Closing accounts can negatively impact your credit score by decreasing your available credit and therefore increasing your credit utilization percentage. What's more, if you close your account within the first year, some banks will take back the bonuses earned. If the card in question has a high annual fee, you can often downgrade to a card with no/lower annual fee or simply wait until the second annual fee hits to close the card.

You can close and reopen certain cards after a particular amount of time to re-earn the signing bonus but the requirements on this vary from bank to bank.

Do you get the points just for opening the credit card?

No. Most credit card sign-up bonuses are tied to a specific minimum spend within a specific time frame. For example, $3,000 within the first 3 months. When opening a card for the sign-up bonus, you want to be sure that you can easily meet the minimum spend with your daily or previously planned expenses. Points are typically posted to your account after the statement closes for the month that you have met the minimum spend.

How many cards do you have to open to get free travel?

This really depends on what your goals are. You could open one Southwest Airlines credit card and after meeting the minimum spend, have enough points to book several roundtrip tickets depending on where you want to go. (If you fly Southwest Airlines often, be sure to consider going for the Southwest Companion Pass. This plays a huge role in our travel hacking plan.)

If you want to travel often, fly business or first class, or stay in luxury resorts, you'll likely be opening new cards on a regular basis.

How often can I open a new card?

There's no specific timeframe for how long you have to wait between opening cards, but a good rule of thumb seems to be 90 days. I have applied and been approved for cards as little as 30-45 days apart, particularly with business cards, but I wouldn't do that regularly. It decreases your approval odds, plus that's a lot of hard pulls and new accounts on your credit report.

Should I add an Authorized User to my new cards?

If you can meet the minimum spend on your own, do not add an authorized user. Instead, if you have a partner who is willing to join you in travel hacking, have them open their own card. You can often request a referral link to "refer" the other person (often called a Player 2 in the travel hacking world) for the card. Most cards allow you to transfer points between members of the same household, so this results in two sign-up bonuses plus a referral bonus, rather than just one sign up bonus. With the Chase Sapphire Preferred card, for example, you'd end up with 135,000 Ultimate Rewards points rather than 60,000.

What if I get denied for a card?

To be transparent, I don't have any direct experience with this but based on what I've read, if you are denied for a credit card, you should call the reconsideration number and speak to a representative. They will either ask you some clarifying questions and change your status to approved based on your answers, or let you know why you were denied.

If you have good credit and were denied by one issuer, it doesn't mean you'll be denied by another. But if the reason for denial is too many open accounts or too many new accounts, you might need to take a break for up to 6 months before trying again.

Keep in mind that even if you are denied for a card, most of the time the application will result in a hard pull on your credit report and your score will likely drop a few points. American Express does not do a hard pull on your credit unless you are approved and accept the card.

How do you redeem the points once you have them?

For points earned from airline or hotel branded cards, the points will be deposited in your loyalty account and you simply book flights or hotel stays online, using points instead of cash. It's important to know that many airlines are part of an "alliance," which allows you to use points from one airline to book flights on another. For example, Virgin Atlantic and Delta are both part of the SkyTeam Alliance. You can book Delta flights on the Virgin Atlantic website using Virgin Atlantic points and it often costs significantly fewer points than booking through Delta.

For general rewards cards (Chase, Citi, American Express), it's a bit different as the reward options are much more flexible. Many banks will offer you the option of cash back or gift cards for your points. Don't do that. Most will also allow you to use the points on their travel portal to book flights and hotels. Most of the time, don't do that either. Redeeming your points directly through the bank limits the value of your points to the fixed amount that they have pre-determined (for example, 1 cent per point).

The best value for redeeming points from general rewards cards is to transfer them to travel partners, which are specific airlines and hotel chains, where the value of the those points is much more flexible. Each bank has different travel partners, though many overlap. This way you can find the best redemption for your points based on your travel goals -- taking into account airline alliances, etc. -- and then transfer the required number of points to that specific airline or hotel. There are sometimes transfer bonuses, which stretches your points even further.

This is how you book a $3,500 roundtrip business class flight for 110,000 points instead of 350,000 or a $1,500 per night hotel for 35,000 points per night instead of 150,000.

Do points expire?

Points earned from general rewards credit cards -- including Chase Ultimate Rewards, American Express Membership Rewards, Citi Thank You Points, and Capital One rewards -- will not expire so long as you keep your account open and in good standing. Specific airline and hotel points may expire due to account inactivity, but this varies from program to program.

Which cards are best?

General reward credit cards are the most flexible, often have higher sign-up bonuses, and generally offer the most valuable point redemptions. These include Chase Ultimate Rewards, American Express Membership Rewards, and Citi Thank You Points. Of these, I have the most experience with Chase Ultimate Rewards points and those are generally regarded as some of the most valuable points you can earn.

Airline and hotel branded cards have less flexibility in that their points are dedicated for use with one airline or hotel loyalty program. They can be valuable though for those who live near a major airline hub, frequent one particular hotel chain, are planning specific trips, or are wanting to fast-track their status in loyalty programs.

How do you keep track of everything?

There's a free app called Travel Freely that I highly recommend. It keeps track of all of your cards, as well as your 5/24 status, upcoming annual fees, and the amount of time since your last new card. There's also a Card Genie feature that can help you choose your next card based on the ones you already have.

How long can you keep doing this?

I've only been at this for one year, so I can't speak from experience. But based on the people that I follow online, it appears that you can travel hack indefinitely. There are lots of reward credit cards to choose from and many allow you to re-earn the same sign-on bonuses every couple of years by closing the account, waiting at least 30 days, and reopening it. So I guess we'll see!

How do I get started?

Check out my Getting Started post!

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