Since my appetite for travel was always larger than my income allowed, I had to find ways to reduce my expenses. I started with one frequent flyers program, then I graduated to hotel loyalty programs, and finally I discovered credit cards offers. Credit banks compete with each other and lure clients with opening bonuses and reward programs. If you grab these offers, you can generate a nice income which, I should add, is not taxable! Most people stay away from credit cards but using them in a smart way could be very beneficial. I use them everywhere I can, which means that every dollar I spend generates some rewards. Also, credit cards are much easier to use than cash and offer more protection than debit cards.
Below, I am describing different tactics on how to generate free travel.
1. Loyalty program alone – Rules for generating awards are simple. You will be rewarded for your loyalty with points/miles, special offers, and bonuses. These programs work well if you travel a lot, otherwise it takes a long time to generate a free hotel night or flight, and your points could expire! Also, in order to streamline your rewards you might not be choosing best deals available on the market. To correct this issue, you can join few different programs but that would spread your rewards in different directions and put you even further away from free travel. Despite this cons, choosing a best program that suits your needs is a good start. Here is a list of best loyalty programs, created by US News.
Hotel rewards programs
Airline rewards programs
Hint: Make sure to join a mailing list for your loyalty program and most importantly read their offers. You will be surprised how many good deals will come your way.
2. Loyalty program plus a credit card associated with it – Opening a credit card associated with your program will help to solve issues described above. Most airlines and hotels have their own credit cards and often offer great opening bonuses as a jump-start towards your free travel. Plus, every time you travel and pay with your credit card, you will be getting extra points for spending on your card on top of your loyalty rewards. The best part, these cards can be used outside of your program but streamline your points back to it. Use your card to pump your gas, pay for groceries, or pay your utility bills – you will have a steady gain of points and you will prevent them from expiring.
3. Credit cards allowing great flexibility for your travel – With these cards, your points can be redeemed for any travel related expenses. Cards are not associated with any loyalty program but can certainly be used to accelerate rewards of your choice.
A very good card in this category is Barclay Arrival Plus Master Card. The opening bonus of 40000 points is one of the most generous on the market. Additionally with this card, you have freedom to buy your travel anywhere you want and then redeem it with your points. If at the time of purchase you do not have enough points to erase it at 100%, you can do it partially; but since each purchase can be addressed only once, you should wait until you accumulate more points to get a higher percentage of your redemption. You have 120 days to do so. Also, with every redemption you immediately get 5% back into your rewards account.
Another great card in this category is Capital One Venture Rewards. It is very similar to Barclay Arrival but gives you only 90 days to complete your purchase erase and does not give you back 5% of your redeemed points . On the other hand, the annual fee is lower. I prefer Barclay, only because it is a Master Card and I could use it in Sam’s Club where I often shop.
If you do no want to pay an annual fee, this is another good card – Bank of America Travel Rewards. It is simply gives 1.5 points for every $1 you spend.
4. Cash back credit cards – In this list of Cash Back Credit Cards you can see many good cards. They give you the greatest flexibility. You simply get your cash back and use it anyway you want, including travel.
My favorite in this category is Blue Cash Preferred® Card from American Express. With 6% back on groceries and 3% back on gas, this is the best card for everyday spending. It is worth to have even with $75 of annual fee.
Recently launched Citi Double Cash is also an excellent choice. Get 1% back when you charge and 1% back when you pay. No opening bonus, but in a long run it is a better card than Barclay and Signature, which also give 2% back, but in points. Citi gives back cash so it could be used to erase any charges, not just in a travel category. (Barclay’s travel category is constantly getting smaller). Once your opening bonus for Venture and Barclay is gone and it is time to pay an annual fee, Citi Double becomes no brainer. Additionally, it has no APR for 15 months on purchases and balance transfers.
Here is the card that it is simply a gift, Bank of America Better Balance Rewards Credit Card. This card practically gives you $100 for nothing. You just have to make sure that you buy something each month. and pay it off on time. Important thing to know, you need to have a balance on each statement so do not rush to pay it off until it shows on you statement. There is no minimum amount to spend so keep it low, for example, spend a total of 25.00 each quarter (at least one purchase each month!). With your bonus of $25 your entire purchase will be erased. Repeat this for all quarters and you just saved $100. Keep spending larger amounts on other cards where you points grow proportionally to your spending.
5. Going all the way – For an average income person, this is the best way to travel for free. The rule is simple – grab everything you can and manage it intelligently. That means belonging to multiple loyalty programs, having multiple credit cards, and scanning internet for the latest offers. It might involve opening a card, closing it, and opening it again – with bonus!
About opening bonus. To receive an opening bonus, you usually have to spend between $500 to $3000 in three months from the opening of the card. It is a date when your bank approved your application, not a date you received the card or authorized it. In another words, you do not have full three months to reach your spending goal! When I am working on my bonus, I put all my other cards aside until my goal is reached. If you have trouble spending a required amount, buy yourself a gift card at your grocery store to use it later. You can also add an authorized user to speed up the process. (If you add your child who is a student in college, you will reach you goal sooner than you want!) Once you are done with the card, you can put it to rest and move to another one.
If you choose this path, take is slowly. It takes time to fully understand how it works. It is rewarding but it is not easy to handle. I manage around thirty cards at any given time, half of them mine and half of them my husband’s (Remember, you can double your rewards if you both open the same card!). I spend at least three hours a week to make sure that everything is paid and under control. I pay all cards in full and on time. This is the only way to do it without getting in trouble. For organizational purposes, it is crucial to have an online access to each card. It sounds complicated but in reality, it is not that bad. If you have multiple cards with one bank, you should link them together so only one log in is required. For my thirty cards, I log in ten times.
To put together a free trip out of these different bonuses is not simple either. One time, I made three different reservations for a four day stay in Hilton Tucson, each made from a different source of points. When planning a trip, I have to dig out everything I have to make it happen, but for me it is fun. It is like putting a puzzle together. I would rather spend hours preparing my trip than not going on one at all.