The following is a contribution from Jason at The Card Journalist. If you’re interested in contributing to Frugal Rules, please see our guidelines and contact us.
How do you turn a financial bloggers convention into a travel hacking seminar? Speak to a bunch of bloggers for five minutes on the subject of “How to travel for free.” That’s what I did recently in front of 150 personal finance bloggers at FinCon in St. Louis, and afterwards, I was besieged by my colleagues who wanted to get in on the deal.
My fellow bloggers were impressed that I covered almost all of the expenses for my trip to St. Louis using credit card rewards, and that was just the tip of the iceberg. By the end of 2013, I will have used points and miles to take about a dozen trips around the country and across the world, many with my family of four, and all of the overseas trips in business or first class. The retail value of these rewards will approach $100,000, yet the cost to me and my family was only pennies on the dollar.
How do I Travel for Free?
There are many tricks that I use to earn, and spend, points and miles towards award travel, but here are my favorite:
1. Credit card sign up bonuses. This is the real low hanging fruit of the points and miles world. Card issuers are so eager to acquire new customers, that they will offer you tens of thousands of points and miles, just for the opportunity to earn your business. Importantly, signing up for a new credit card will increase your credit history and reduce your debt to credit ratio, which will help, not hurt your credit score. One of the best cards currently for this is the Barclaycard Arrival World Mastercard, or if you’re looking for somewhere specific, like Hawaii, then the Hawaiian Airlines credit card allows you to earn at least one free coach ticket for spending $1,000 within the first 90 days after opening the card.
For example, I signed up for both the business and personal versions of the Southwest Airlines credit card, which helped me to earn their companion pass, which is the best deal for domestic travel. I used those points to pay for the airfare to the FinCon convention, and used the Companion Pass benefit to bring a friend of mine along for free (other than $5 in taxes). Editor’s note: I can vouch for this card as Mrs. Frugal Rules and I did the same thing to fund flights we’ll be taking in January.
2. Promotions. Airlines, banks, hotels, and other companies often give away thousands of frequent flier miles, just for making a token purchase. It is up to you to browse their web sites and register for these offers.
3. Buying miles. If you don’t have the time to look for the best promotions, sometimes you can simply buy airline miles. While it is usually too expensive to do this, airlines will sometimes offer their miles at a discount. For instance, US Airways frequently sells miles at such low rates, that you could book an award ticket in business class for less than the price of a coach seat.
4. Credit card reward bonuses for spending. Of course, you can earn miles from an airline credit card, but the way to really earn a lot of free travel is through spending bonuses. For example, you can earn 5x Chase Ultimate Rewards points per dollar when you use a Chase Ink card at office supply stores or for telephone, television, or Internet service purchases.
5. Spend your points wisely. This may be the most important factor in my free travel. There are lots of ways to redeem points for one cent each towards travel reservations, but the real value comes when you find luxury hotels or business class international flights where your points and miles are worth 4-8 cents each. In fact, if you are earning 5 points per dollar on some purchases, and you receive another 5 cents per point in value, it is like getting a 25% return on those purchases!
Finally, it is important to understand that earning miles with your credit card is only for those who pay their balances in full and on time, every month. Those who are carrying a balance on their credit cards should avoid reward cards and focus on other mileage promotions while paying off their debt. But by using every available technique for earning points and miles, and a sound strategy for redeeming rewards, you too can stop paying high prices for travel, and start seeing the world for free.
Do you like to churn credit cards? Have you been able to travel for free?
Jason Steele is a full time freelance blogger who is an expert on credit cards and reward travel. He writes for The Card Journalist and several other leading personal finance sites about everything from explaining Chase Blueprint to the best credit cards sign-up bonuses.
Photo courtesy of: Poorna Kedar