Daily Archives: January 15, 2024

A brief backstory – We have been travel hacking “seriously” for about a year and a half and we’ve been to Maui, San Diego, Oceanside, San Francisco and most recently Washington DC! But going back in time, I actually took my first “free” flight in 2018, and I went to Bali. I had purposely opened up a card for this exact reason, and used all my points on one flight. I booked my flights through the Chase portal because, at the time, I didn’t know any better (this is not the best value for your points). But I still got to Bali (and home) completely free. And got a 24 hour layover in Hong Kong too!

Before jumping into actionable steps, it’s important to prioritize responsible credit card usage when engaging in this hobby. We strongly recommend that if you currently have credit cards that you’re paying off, do that first before you start. You’re not getting free travel if you’re paying interest on a credit card balance.

Step 1 – Figure out your credit score

You want at least a 640 to start, and the higher the better. Sites like Credit Karma are ok for checking your score but in our experience, Experian Boost is the best one and it’s the one we use. You can create a free account to check your score and you can see the “ingredients” of your credit score.

Step 2 – Figure out what your 5/24 status is

The Chase 5/24 rule is a Chase rule that states that if you have been approved for five or more personal credit cards in the last 24 months, you will automatically be denied for any additional Chase credit cards. This includes all credit cards, not just Chase cards. So if you signed up for a JC Penney card last year, or a Discount Tire card like we did before we knew better, that card counts as one of your five cards. This is why it’s often recommended to start with Chase cards – because you’re starting the 24 month clock and the hope is by the time you’ve run out of Chase cards, you can move on to Capital One and American Express cards, neither of whom have this 5/24 rule. And then in 24 months you can move back to Chase, and so on.

Step 3 – Figure out your monthly spending (that can be put on a credit card)

This one might seem kind of silly, but let me explain why it’s important. Each credit card you sign up for is going to have what’s called a “minimum spend” requirement. This is the minimum amount you need to spend on that card in order to receive the sign up bonus (often called a SUB) and there is usually a specific timeframe in which you need to hit that minimum spend. Most commonly it’s 90 days, but not always – I’ve seen 60 days or 180 days on some cards.

So not only do you need to know how much you’re spending to know if you can hit the minimum spend, the goal here is to not spend any more money than you would without the credit card. So knowing your usual budget is a good way to keep yourself in check and ensure you’re not overspending.

Step 4 – Not all points are created equal

Recognize that not all points have equal value, and different ecosystems act as distinct currencies. For instance, compare Marriott and Hyatt points – You can transfer your Chase UR points to both Marriott and Hyatt – but it’s often not the best value to transfer them to Marriott. This is because 1 Marriott Point holds less value than 1 Hyatt point. So for example, you can get an average run of the mill Marriott for 50K Marriott Points a night but for 35-45K you can book a Park Hyatt, which is the highest tier super luxury hotel for Hyatt.

I’m not saying one is better than the other, but I’m saying it’s important to know the value of the points you’re wanting to use. As far as redemptions go, a good Marriott point redemption is about 0.8 cents per point, and a good Hyatt point redemption is 2 cents per point or more. Don’t get overly concerned about point values initially; it becomes easier over time to discern good values with practice. Ask yourself if a redemption aligns with your family’s needs and brings joy; if yes, book it without worrying about the point value.

The other thing that’s important to understand, is that there are two main categories of points. There are flexible points, and airline/hotel specific points (these are called cobranded cards).

Let’s start with the flexible points – some of the more popular ones are: Chase Ultimate Rewards Points (UR), Capital One Points, and American Express Membership Rewards (MR) – think of these points as a flexible currency that can be transferred to different transfer partners. A transfer partner is a hotel or an airline that accepts these points as a form of payment. So, for example, I open up a Chase credit card and I earn 60,000 Ultimate Rewards points. I can then transfer those 60,000 Chase Ultimate Rewards points to places like Southwest Airlines, United, British Airways, Hyatt, and so on to book a hotel room or a flight.

The second main category is going to be cobranded cards that are specific to that airline or hotel chain. For example, you can open a Southwest Rapid Rewards credit card and earn, let’s say 60,000 Southwest Rapid Rewards points once you hit the minimum spend. These points can only be used to book flights on Southwest Airlines, you cannot transfer them anywhere else. Almost every airline and hotel chain has their own are cobranded cards and they all earn points that can only be used for that specific airline or hotel.

Step 5- Choose your first credit card and open it!

If your credit score exceeds 640, you’re under 5/24, and you can meet the minimum spend, consider opening a Chase Sapphire card, widely recommended by travel hackers for its benefits and features.

There are 2 Chase Sapphire cards – the Preferred and the Reserve. Check out the table below to review the differences between the cards. You’ll need one of these 2 cards in order to transfer your Chase Ultimate Rewards points to any transfer partners.

Chase Sapphire Preferred

Chase Sapphire Reserve

Annual Fee: $95 Annual Travel Credit: $50 (must book thru Chase portal) Auth user fee: $0 Foreign Transaction Fee: $0 Travel Insurance: Auto​ Rental Collision Damage Waiver, Trip Delay Reimbursement, Lost Luggage​ Reimbursement, Trip Cancellation/Interruption Insurance. Rewards/Bonuses: 3X points on dining, 2X points on travel

Annual Fee: $550 Annual Travel Credit: $300 (just has to code as travel) Auth user fee: $75 Foreign Transaction Fee: $0 Travel Insurance: Auto​ Rental Collision Damage Waiver, Trip Delay Reimbursement, Lost Luggage​ Reimbursement, Trip Cancellation/Interruption Insurance. Rewards/Bonuses: 3X points on travel and dining Airport Lounge Access: Complimentary Priority Pass membership TSA PreCheck/Global Entry credit: up to $100 reimbursed every 4 years

Jumping into the travel hacking arena calls for a thoughtful and strategic approach, as we shared above. By starting with a clear understanding of your credit score, navigating key rules like the Chase 5/24, and evaluating your monthly spending habits, you can start to maximize the benefits of credit card points for almost free travel and the Chase Sapphire card is an excellent starting point. If you’ve been confused about where to start in the exciting world of travel hacking, we hope this has been helpful. We’d love to hear where you’re going on your first trip. Happy travels!