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The TFB Guide to Traveling for Cheap: Getting Credit Card Points

Throughout my time as an international travel celebrity, I’ve heard many great tips on how to travel for less. These tips include being flexible with your itinerary, monitoring prices and deals diligently, and traveling during slow seasons. All good advice, but they will only get you so far. Despite our best efforts, traveling can still be quiet expensive, especially if our goal is to sip champagne on a big comfy seat in the sky. Throughout this multi-part, evolving series, I’ll help you get comfortable with another way to travel for less. I don’t want you to stop doing what you’re doing. I’m here to add another tool to your belt.

To be clear, this isn’t novel. I didn’t invent these strategies. I’m just here to present my take and my voice. This first post is designed to be a primer. Some ideas and strategies may be a catalyst for more questions. That’s supposed to happen. I’ll cover more advanced tactics like transferring bank points and navigating loyalty programs in future installments. For now, I simply need to get you comfortable with the idea of selectively applying for new credit cards. Oddly enough, that’s the big “secret” to becoming a globetrotting influencer like me. Here we go:

Wait. Credit Cards?

Yes, the key to traveling for cheap is to leverage credit card offers and their accompanying loyalty program benefits. Don’t worry, we’ll unpack what this means. I understand being tentative at using a debt instrument like credit cards. Keep in mind that using the tips below require you maintain your budget. We don’t want to increase our spending. To do this successfully, it’s imperative to pay back the charges made on the credit card before the statement period is over, that way you are not charged interest. Think of credit cards as a tool to get something for nothing. With good habits and controlled spending, you can be rewarded substantially. But this only works if our spending habits don’t change. If we spend more than we usually do pursuing this strategy, we’ve negated the purpose. You can’t spend your way to savings.

Mind Your Score

First, it’s important to raise that credit score if you have to. Many of the best cards and bonuses are reserved for those with limited debt, moderate and above income, and good credit scores. Every card and issuer is different, but shooting for 700+ is a good start.

Check out this podcast episode for more information on how your score is calculated: Churning, Burning, and Your Credit Score

Card Selection

Once we feel our credit score is in a comfortable range, we have to choose the first travel credit card to add to our portfolio. Pick a card, any card. Ok, maybe not any card. I’d suggest picking a single card and getting used to the accompanying program and benefits before moving on to others. Some people like to jump in with a full head of steam, applying for multiple cards at once. By doing so, it is more difficult to navigate the information overload of different programs and it makes it tough to meet the minimum spending required for bonus points in the short time frame.

To help with your selection, start by analyzing your spending habits. Where does your money go? Pinpoint the top spending categories. For most people, housing is number one, but it can be hard to maximize cash back rewards rent and mortgages. It’s not impossible, but that’s a post for another day. We’re going to start easy.

What are your next biggest categories? Are they something like groceries, restaurants, and transportation? The reason I ask is that different cards reward user spending in different categories at different rates. Some cards offer accelerated cash back on restaurant spending, some general travel, others on entertainment. There are myriad of these bonus categories. It’s not hard to find cars that offer 2x, 3x, and even 4x points or cash back on these types of spending. Finding the right card for you is predicated on maximizing the cash back you will earn based on the spending you are already doing.

Premier credit cards often have lucrative sign-on bonuses, awarding a certain number of points if the user spends a minimum amount in a certain time period. For example, Chase Sapphire Preferred, a popular card among points and miles enthusiasts, currently gives 50,000 points if you spend $4,000 in the first three months of opening an account. It’s in these sign-on bonuses in which a lot of hobbyists quickly grow their bank of points and miles. 50,000 Chase Ultimate Rewards points can go a long way when redeeming for travel. It’s easy to get over $625 worth of value out of those points. One sign-on bonus from one card can make quite a dent in our travel budget.

When considering signing up for travel credit cards, be mindful of which companies you frequently patronize. Do you have a particular airline or hotel program you prefer? Those may be good cards to consider. Some bank cards also allow you to transfer their points to travel partners. If your favorite brand is one of those select partners, a bank card could be a smart first choice.

The Fanwife and I were able to redeem 40,000 points for two business class tickets to Cancun.

Expand Your Portfolio Mindfully

Applying for cards solely because they have high sign-on bonuses may get you a ton of points fast, but not all points are equal. Some points and loyalty programs may be more valuable for me and my habits than they may be for you. For beginners, flexibility is important. For instance, points earned through bank programs like Chase’s Ultimate Rewards, American Express’ Membership Rewards and Citi’s ThankYou Rewards have a lot of redemption options. Points in these programs can be used to book travel directly in their respective portals and are able to be transferred to specific travel partner programs.

Why is this important? Well, let’s say you fly Southwest a lot. Accordingly, you decide to get the Southwest credit card. It would make sense. You would earn 40k Rapid Rewards points when you hit the minimum spend and get some extra points any time you spend money on SW flights. That’s good for a few free flights and certainly isn’t a bad deal. However, it’s important to know that when points sit in a travel loyalty program, they’re pretty much stuck there, only to be redeemed within that particular program. While common, this isn’t the case for all programs. In this example, your 40k points are stuck in your Rapid Rewards account until you use them to book SW flights.

Let’s say, instead, you opt to get the Chase Sapphire Preferred card I mentioned earlier. That card offers 50k Chase Ultimate Rewards points if the minimum spend is hit. Those points can be used to book virtually any flight with points through the Ultimate Rewards portal. Plus, Southwest is an Ultimate Rewards partner, so you can transfer any amount of points (in 1,000 point increments) to your Southwest account as well. If you only need 20k points for your SW flight, you’ll only need to transfer the 20k. This gives you 30k to use how you wish. You can, of course, transfer the remainder to SW if you’d like, but you don’t have to. They’re not “stuck” with one program.

This is a simple example, but it illustrates the usefulness of flexible bank points. The further away you get from cash, the less valuable a point is. Cash is king, so flexibility is key.

With a mindful strategy, the world is your oyster. Whatever that means.

Don’t Ignore Cash Back Cards

There are a lot of interesting travel cards out there. They can have some very useful benefits and provide significant value, especially through point transfers to particular programs. These point transfers, which I’ll discuss in detail in a future post, can increase the value of 1 point quite substantially. 1 point, depending on how you redeem it, could be worth 1.5 cents, 2 cents, or even 5 cents, which is the highest value I’ve ever achieved. Confused? Don’t worry. Point redemptions can get a little complex and no one ever truly masters it. I discussed valuations in a recent podcast episode:

TFB #14: Point Valuations and Chase Ultimate Rewards Transfers

Redeeming points can be quite fun, especially if you find a great deal and elevate the value of those points. However, just because they aren’t sexy doesn’t mean a cash back cards aren’t worthy of your attention. Not only can they offer a good return on spending, but the rewards you get can be used on anything, not just travel. Sure, if you earn $100 in cash back, you can only use that for $100 in goods and services, but your redemptions are not limited solely to travel expenses. Maybe you find yourself in a situation in which you’re not traveling as much as you hoped. Having a cash back card in addition to your travel cards means you have some sort of currency that can be used to pay for everyday expenses. Rapid Rewards points aren’t much use when trying to pay the electric bill. Trust me, I’ve tried.

Mind the Fees

Many travel cards, especially those with large sign-on bonuses, have a yearly fee. For some card,s the fee is waived for the first year. For others, the fee is applied to the first billing statement. Always do some back of the napkin math to be sure that the fee you’re being charged is worth applying for and/or keeping the card. In many cases, the fee is easily recouped with the sign-on bonus, but may not be worth holding on to once the yearly fee is applied after the fist year. This is the “burn” part of a churn and burn strategy. Get the card, put some spending on it, get those points, then cancel the card before the card’s anniversary.

And that’s the first step in unlocking the “secret” of traveling for cheap. In future installments, I’ll go over redemption options, specific loyalty programs, and point transfer tips. If you have any questions or comments, let me know!

Let’s recap these steps before we go:

  1. Know your credit score and spending habits
  2. Pick a card that rewards you well for the spending you’re already doing and is in a program you can understand and use frequently
  3. Monitor initial spending to ensure you meet the requirements for the sign on bonus
  4. Ditch cards that are no longer providing value
  5. Rinse. Lather. Repeat

And remember, listening to my award-winning and losing podcast is a great way to keep up with the latest in the points and miles world and begin your bargain traveling journey.

About the author

Travel Fanboy

Adam is the host of the Travel Fanboy Podcast, editor of TravelFanboy.com, and a super famous travel influencer. He's no expert, just an enthusiast who enjoys having a top-shelf trip at a happy hour price. Formerly of Vegas Fanboy fame.