A Beginners Guide To Traveling For Free
Have you ever seen those articles about people flying first class to a private villa in the Maldives all for free and wondered how they did it? Maybe you looked a bit more and found out they have enough credit cards to fill a Rolodex and instantly thought “traveling is cool but not if it drowns me in debt and ruins my credit score.” I used to think the same thing; the articles really only covered the resulting travel, there were no clear guides out there on how to start and no resources adequately addressed all of my questions. For that reason, I am writing this article to guide others in a way that I wish existed when I was starting out.
There are a lot of components to this but, before I dive in, I would like to start by establishing a bit of credibility. I’ve been doing this for about 3 years and since starting, I’ve booked a cumulative 16 free(ish) flights to 4 continents, stayed free for 4 weeks in 4 star hotels, stuffed my face in airport lounges on 3 continents all while never caused myself to go into debt and actually improving my credit score. I know that may sound too good to be true but I will now show you it is not only possible but easier than you think.
The Basics
Traveling for free involves paying for things with points rather than dollars. Now there are a lot of ways to get points but the two most popular ways are (1) traveling and (2) credit cards. In this article, I will specifically be covering the credit card method. Through the credit card method, points can be effectively accrued through introductory bonuses. You know, those offers like “get 60,000 miles if you spend $3,000 within three months of opening your account”. With that being said, if your natural monthly credit card spend is not at least $750, this is not for you. If you spend more to get something for free, you will not be saving any money by doing this. If your monthly spend is near, but not quite $1000 a month, you can easily surpass that mark by always being the person to throw down your card at the restaurant and Venmo request your friends.
Going back to the points game though, the basic principle of the credit card game is maximizing the value of the points you are able to accumulate while mitigating the negative effects on your financial life. These two parts can be further broken down broken down into sub-components that each need to be considered.
Getting Points
All credit card intro offers are not created equal. It is crucial that you capitalize on only the most lucrative intro offers to maximize your reward potential. This means not being wedded to any specific airline or hotel but, instead, being willing to gravitate to whatever brand and offer is best at the time. Since I only recommend opening 2–3 cards per year and most cards have a 24 month reopen policy (you can only reopen the card 24 months after you close it), it is crucial you open each card when it is offering a lucrative deal. Offers will often change and sometimes you will even receive targeted offers from banks with offers higher than those advertised online. In either case, it is crucial to evaluate each offer against the alternative cards. There are a lot of exceptions but a general rule of thumb is never open a non-hotel card for an intro offer of less than 60,000 points. Hotel points tend to be less valuable so you are typically looking for an introductory offer over 100,000 in those cases. For specific deals going on at the moment, a great resource is the points guy (https://thepointsguy.com/cards/). If you’re willing to get really in the weeds, you can also head over to Reddit (reddit.com/r/churning). It is crucial to do your research before opening any card and only capitalize on the most valuable intro offers at any given moment. Also be aware of bank specific anti-churning rules if you plan to open more than a card every 6 months or so (https://www.reddit.com/r/churning/comments/67u9q0/guide_antichurning_rules/).
Spending Points
Maximizing point redemption value requires a great deal of flexibility and research. You can either spend all of your points on getting home over Thanksgiving or you can spend the same amount of points getting a round trip ticket to both Switzerland and Hawaii. Assuming you are interested in the second, you must first say goodbye to flexibility on both travel dates and locations. The name of the game in maximizing point redemption value is the more freedom you’re willing to give up, the better a deal you can get. You can either fly to Switzerland during those days you have off over Christmas and spend 120,000 Delta points or fly there during a random Wednesday to Wednesday in March for 22,000 Delta points. This is similar to shopping with normal currency but the price differential with points is often more extreme between peak and non-peak times. The same goes with hotels; 150,000 Hilton points can either buy you 3 nights in a Hilton in Nashville, Tennessee or over a month in a 4 star resort in Bali, Indonesia. In the first case, you will likely be saving $450 while in the second you would be saving almost $2000. Taking advantage of these deals means you will have to get out of the mentality of picking your vacation destinations based on where you want to go and, instead, picking your vacations based on where value can be maximized. The further you stray from full flexibility, the worse the redemption value will get.
Now as far as specific advice goes, it is difficult for me to give you much timeless advice as deals are different each and every day. There are a few good places to start when it comes to spending points though. For example, thepointsguy.com can be a great resource for reading about recent airline mile deals. For hotel deals, you can do google searches like, “How do I maximize the value of my Hilton points?” to find recent deals. There are, however, some relatively timeless pieces of advice I can give for redeeming points: always transfer your Chase points to Hyatt for maximum redemption value and always fly in/out of a major US airport. Everything else will change and will simply require research when you’re ready to get lost.
You can also get extreme in point value maximization. There are “secret” tricks like the United Excursionist perk and American reduced mileage awards where you can squeeze a bit more value out of your points. These get pretty complex so I will not dive into them here — feel free to google them if you’d like to learn more.
Mitigating The Risks
This is not a low risk game; you are playing a game where your financial security is on the line. Now this game is not unwinnable by any means but it will take a combination of spontaneity, self-discipline, and organization. The major things risks that you’re trying to mitigate are a negative impact on your credit score, accruing debt, and ruining your relationship with a bank. All can be mitigated through proper research and planning.
The first and most complex component of this is your credit score. There are a lot of components that your credit score depends on and I recommend reading about those before proceeding in this section. Essentially, when you open a credit card, your credit score is hurt in the short term but is helped in the long run (3–6 months out). It helps your score by increasing your total number of accounts and decreasing your utilization. It hurts your score by adding a hard inquiry and decreasing your average age of accounts. The negative just so happens to be temporary so the best strategy is to practice moderation; if you only open 2–3 cards a year, the temporary negative effects will not compound and will stay negligible. It can also help to have 2–3 really old, no annual fee cards to “anchor” up your average age of accounts.
The next major risk to worry about is debt. This goes with any type of credit card but it is obviously crucial to keep your spending to a point where you can pay your full balance each month. However, even if you’re a diligent spender, opening and closing a bunch of credit cards means more to keep track of. This means not only having the money to pay your bills but also having the organization to pay your bills; more credit cards mean more bills each month. The best strategy here is to put all of your cards on auto-pay for the full balance, set up text message alerts for all purchases on all cards (it’s very tricky to spot fraud with 10 cards in your wallet), then use a service like Clarity money or Mint to track everything from a high level. You also will need to establish a spreadsheet to keep track of all of your cards and when they were opened. Since a lot of the cards with attractive introductory offers have annual fees, it is crucial to know when you should cancel or downgrade an old card. This again is staying organized to prevent those additional charges and keep yourself debt-free.
The final major risk you must content with is ruining your relationship with a bank. As you can imagine, banks aren’t the most happy about being schemed out of thousands and lenders are not the most friendly when they see 5 credit lines opened in the last 24 months. It is for this reason that you want to be smart about timing when opening and closing credit cards. If you’re looking to get a sizable loan within the next 12–24 months, do not open any additional credit lines. The higher interest rate you are quoted will more than cancel out the rewards you receive from that additional card. It is also important not to close every one of your cards after 11 months, just before the annual fee hits. This will make you extremely easily flagged by any credit card approval algorithm. Always call at 11 months as if you would like to cancel and half of the time, the friendly call center agent will waive the annual fee. If they do not waive the annual fee, you could either downgrade your card to the no annual fee version or accept the annual fee and cancel after 23 months.
Putting Everything To Work
This is by no means an exhaustive guide but I hope it puts you in a place where you feel confident to try it out or, at the very least, read a bit more about it. These are the basic principles that every one of those “travel gurus” who travel for free follow; the only difference may be scale (they may be doing more than 2–3 cards/year) and duration (they may have been doing this for years). If you follow them as well, you could be on a free flight to the maldives before you know it.
