How To: Travel Reward Credit Cards HACK
** This post is sponsored by Lexington Law **
I love to travel. The idea of a life full of travel was always a pipe dream to me. Of course, I wanted it, but I knew there was no realistic way to keep affording it over a long period of time. That is when I first started learning about the greatest “travel hack” I have ever come across – the travel hack that has changed my life and my future; Travel Rewards Credit Cards.
The idea of travel reward credit cards is simple. For the credit companies, the rewards they offer for signing up for their cards are to attract you away from the competitors. For the consumer (you), you are benefitting from these rewards for no extra money or effort spent.
Each company and each card presents a different award system. If you use this system to your advantage as a true travel hack, the sky is the limit on the benefits you can reap. The amount of rewards you receive depends solely on your commitment to staying on the road longer.
What are Travel Rewards?
Travel Rewards can mean a lot of things, but for the sake of making things simple we will put it this way: Travel rewards are points you can earn with every dollar you spend on your credit card. These points (usually 100 points is equivalent to one dollar) can be redeemed for any number of travel-related purchases.
Each credit company has a different set of redeeming policies that you should review prior to choosing a card, however, for the most part they are very similar. Often, the credit companies will have their own portal to redeem points through (usually purchasing travel through their partners). The benefit of this is that points you earn have even more value when they are redeemed through the portal.
Where to start?
Getting into the travel rewards “game” can be intimidating. There’s so much information to take in and anytime you are risking a dip in your credit score it’s awfully scary. It is important to have a basic knowledge of using credit cards before intertwining yourself in this travel hack. But here is the thing; you aren’t risking a decrease in your credit score at all – and if so, it is a very minimal, temporary dip.
This year, alone, I have been accepted for five new travel rewards cards. The impact it had on my credit score? Absolutely nothing. It is all about timing and self-organization.
I usually have two big sign-up periods per year, although I know other travelers who have big sign-up periods three or four times per year. A typical “big sign-up period” for me means applying for 2-3 credit cards at a time; whichever cards offer the best rewards that month because each month, reward amounts change for each card.
Typically, your credit score may dip up to 30 points because of various reasons that the credit bureau doesn’t like, but by the next “big sign-up period”, it should have climbed back to your original score if you are spending evenly and consistently between your cards and paying your bills in full each month. Credit repair is very simple in this case and happens almost automatically.
SO IMPORTANT: Don’t invest yourself in this hack if you can’t afford a credit card. Trust me, it is just not worth it.
What is the goal?
Normally, credit companies award you with a point per dollar that you spend. However, 100 points only redeems for one dollar. If you do the math, you would have to spend a lot of money at this rate to receive a substantial award.
Luckily, credit companies also offer “minimum spending rewards” which should be your focus. These minimum spending rewards are put in place to make sure the consumers (you) are using the company’s card.
For example: Capital One will say that you need to spend a minimum of $2,000 with the card in the first three months of being accepted in order to earn a minimum spending reward of 50,000 points. That reward is equivalent to $500 in travel spending which is very substantial. And here’s the thing: A 50,000 point reward offer is not only common, but low compared to other real offers out there. Now you see the potential benefit of this travel hack.
How to meet minimum spending requirements
I understand not everyone has $2,000 to spend within a three month period or even the opportunity to spend that much so often – hell, there are very few times that I do. The key is to apply for these cards when you have big expenses to pay in the immediate future. Don’t spend extra money just to meet minimum spending requirements. Spend normally, reap rewards.
There are creative ways that I and many others have come up with to meet minimum spending requirements without spending additional money to get there.
Earn free flights easily
Getting into the travel rewards credit card travel hacking game can be intimidating and it may take a lot of initial research on your part. However, you get what you put into it, and there is no limit on how many points you can occur.
When readers ask me how I manage to afford all of my travel, I tell them it definitely isn’t from the money I earn from this blog. In large part, I can afford to stay on the road for longer by eliminating the costs of travel by using travel rewards points. It has been one of the greatest secrets I’ve ever learned and I hope you find it to be just as beneficial.
Please, feel free to reach out to me with any rewards card concerns. I know this is a confusing concept and there is still plenty I’m trying to learn about it, too. We can learn together.