How to Travel for Free: Introduction to Credit Card Travel Rewards

Credit card travel rewards AKA travel hacking is a large part of our strategy to travel the world affordably as full-time travelers for the past 6 years. Almost all of our transcontinental flights are paid for by travel rewards points, saving thousands of dollars per year. We even occasionally treat ourselves to a nice 5 star hotel paid for by credit card hotel rewards. In this detailed introduction to credit card travel rewards, we will explain what they are, how you can leverage them and the credit cards we recommend to get started.

Travel Rewards 101

Travel Rewards (also referred to as “Credit Cards Rewards” or “Travel Hacking”) is where you open targeted credit cards in order to get a large travel points sign-up bonus. The sign-up bonuses are often worth the value of one international flight. That means you can get up to one free flight for every credit card sign-up bonus that you earn! You first need to meet a minimum required spend on the credit card before you receive the travel rewards(for example, spend $3K within 3 months). You can then later use these sign-up bonuses to pay for your flights or hotels, you will simply have to cover fees and taxes. Note that these credit card rewards usually only apply to US citizens.

There are 3 types of travel rewards to be aware of:

• Airlines or Hotel rewards – Such rewards come from credit cards that are co-branded with either a hotel chain or an airline company.
  Example: Delta Skymiles Credit card, Marriott Bonvoy Boundless Credit card.
• Fixed value rewards – Such rewards are set in value and can sometimes directly be applied to the money you spent on your credit card to erase it (like the Capital One Venture and their Purchase Eraser)
  Example: Capital One Venture,  Barclaycard Arrival Plus
• Transferable rewards – These points are the most flexible (are usually the most valuable) since you can either use the bank’s travel portal or transfer them to partner airlines and/or hotels.
  Example: Chase Sapphire Preferred and Reserve

Tips to Maximize Travel Rewards

Here are our pro tips to maximize your travel rewards:

1. Pay your card in full every month. We can’t say this enough! If you can’t pay your card each month, please don’t open a new card. Getting into credit card debt is not what we are discussing here. Please make sure that your financial situation is in order first. Nobody wants to unnecessarily increase their debt and/or lower their credit score.
2. Understand the Chase 5/24 rule. If you open more than 5 credit cards in the past 24 months (across any credit card provider) Chase will not approve you for a new card. Pro-tip: Chase is known for having the most valuable rewards points (called Ultimate Rewards), so you want to prioritize opening your Chase cards first.
3. Only aim to get at least $500 worth of total value (after annual fees) when opening a credit card. Don’t open a credit card that will give less than that (like a credit card with a one-time $50 credit on your next flight or online purchase). The reason for that is that you are limited by the amount of cards you can open with the Chase 5/24 rule.  
4. Avoid annual fees. Most cards will void the first year’s annual fee. After that, you can reassess whether or not you still get value by keeping the card open and paying the annual fee.
5. Track your rewards in one place. We use a spreadsheet to keep track of every credit card we open. The information that is important to capture are:
   1. the name of the bank
   2. the name of the card
   3. the type of card (personal/business)
   4. the name and type (transferable. airline miles, hotel points…) of the reward you will be getting
   5. the day your card will renew (which is usually one year later)
   6. the bonus you will be getting
   7. the minimum spend you need to hit
   8. the date by which you need to hit your minimum spending limit
   9. whether or not you have received the bonus
   10. whether or not you want to keep the card open
6. Alternate opening a card for you and your partner (if applicable). This is an easy way to double the benefits and you can often refer each other for extra bonus points. This is especially relevant when such bonuses are part of a limited-time offer.
7. Open business cards before hitting the Chase 5/24 limit. Business Cards don’t count towards the Chase 5/24 rule. So if you’re trying to stay under 5/24, you can still rack up points and miles bonuses with business cards without affecting your ability to sign up for Chase cards in the future. 

What are the best cards to get started?

We highly recommend that you start with the top Chase card, the Chase Sapphire Preferred, to plan for the 5/24 rule. The Chase Sapphire Preferred has a much more approachable annual fee to get started than the Chase Sapphire Reserve. It’s also a great first credit card for travel rewards because the points are transferrable as cash value on their portal or can be transferrable to many partner airline and hotel programs.

If you already have this card and are looking for other suggestions, please check out our Credit Cards page where we put the latest credit cards offers we’ve been recently using. And if you’d like to stay updated on our finds, we suggest that you sign-up for our newsletter where we share the latest offer from the cards we’ve been recently opening. 

How much in travel rewards did we earn and redeem in one year?

Now that we’ve introduce the notion of Travel Rewards and how to best use them, you can take a look at our actual travel rewards earnings and redemptions in 2023. In this detailed report, you’ll see the credit cards that we opened in order to earn over 500K in travel reward points and redeem 250K points – for a savings of about $3500.

Note: For additional detailed reports, please refer to our travel rewards earnings and redemption reports here.

Our bottom line

Thanks to credit card travel rewards, we’ve been able to travel the world for the past 6 years with essentially free international flights! If you are strategic about which credit cards you open and collect the sign-up bonuses, you can continue earning travel rewards for years to come and significantly reduce the cost of your travels. Remember that you should only be travel hacking if you can always pay your credit card bill on time and in full!

Were you aware of Travel Rewards before and if so, did you successfully used credit card sign-up bonuses to travel to cool places? Did we overlook something that would help us improve our game even further? Please leave your comment on the comments section below.

Happy & safe travels!

Footnotes:

• [1] We are not currently an affiliate for any credit cards that we are mentioning here (including Chase credit cards). We have shared our referral link from opening this credit card ourselves so you can get the opportunity to sign-up as well. If you sign-up using this link, we may receive a referral bonus of a certain number of Chase Ultimate Rewards points.
• [2] We are able to get a 1.5 cents valuation for all of our UR points because we have the Chase Sapphire Reserve card. If you don’t have this card in your chase account, your UR points will redeem as 1.25 cents.