Free Travel FAQ
In my last post, I introduced the concept of using credit card signup bonuses to travel the world for almost nothing. If you're like me in the beginning, you've probably got some questions and concerns. Let's take a look at some common ones.
This sounds scary. Won't this ruin my credit score?
This strategy, used over time, will help your credit score. Mine has been in the 800s for years. The fear around signing up for credit cards comes from not understanding how your credit (or FICO) score is calculated. The factors that go into your score are:
On-time payment history (35%)
% of total credit used (30%)
Length of credit history (15%)
Credit mix (10%)
New credit (10%).
After getting a new card, here’s what happens:
Small dings
Credit pull. (any time you pull your credit there’s a tiny ding). Tiny impact that lasts < 1yr.
New Credit. (because you opened new credit) Minor impact as it’s only 10%. This impact goes away if you cancel card eventually.
Length of Credit History. Minimal impact that becomes negligible if you have an older card that’s been around for a few years. This impact goes away if you cancel card eventually.
Why it goes up
On-time payment history. This is the biggest contributor to your credit score so when you pay on time with a new account you are significantly helping your credit.
% of total credit used. This is the second-biggest contributor to your credit score so when you add new credit, your score goes up (as your utilization % has just gone down).
In the end, your credit should go up. This strategy isn’t much different than what “credit repair” companies do to help their clients increase their credit score.
Who should do this?
People who:
Will for sure pay off their credit cards in full and on time.
All benefits are negated if you end up paying the insane 18% interest or spending more than you otherwise would.
Have a decent credit score
The huge bonuses require an excellent score, but if that’s not you, applying to some smaller cards/bonuses will help you get there.
Can handle some details, are flexible and willing to learn
You’re adding some complexity to your big purchase and your travel. Over time, though, you’ll be able to do it without thinking.
What do I do with the card after I've got the bonus?
You may want to keep using it. For instance, I've kept my IHG card over the years despite the $49 annual fee because they shoot me a free night every year that we use as an excuse for a fancy getaway.
For other cards, you may decide that the long-term benefits aren't worth the recurring annual fee. A good time to close these accounts is 10-12 months after applying for the card.
What if I'm not that into travel?
As much as I love to travel, I get this. After having kids, our appetite for travel all but vanished. The cool thing is that the same habits that get you free travel can also simply net you cash rewards.
Those 100,000 Chase rewards points from last year are also worth $1000 cash. Of course, they could be $2500+ in travel, but if that's where life has you, feel free to take the thousand bucks!
How crazy can I go here? (How many cards can I do at the same time?)
More than you think, but not infinite. The main rule that's come out in the last few years is the Chase 5/24 Rule. Here's the rule:
To be accepted for a Chase card, you can't have opened more than five cards (from any cc company) in the last twenty-four months.
Chase cards are usually the best, so it's good to plan around this (either 2 cards/year or a big splurge and then a long break)
Can I do a card multiple times?
For Amex cards, no (1 bonus per card per lifetime). For Chase cards, yes, after about 4 years. More details here.
Can my spouse sign up for 2x the goodness?
Yes. One great benefit of being married is that all this free travel can be doubled. When you see a good bonus, you can sign your spouse up too for 2x the points.
Do you have any more examples of how you've used this strategy?
I suppose this is where I confess to my exploits to get you fired up enough to try it.
Internationally, I’ve notched free trips to Peru, India, and Europe.
My intense 2015 spreadsheet from our free-flight, mostly-free-hotel, free-rental-car trip to Switzerland, Germany, Italy, France, Denmark, and Hungary
Domestically, I’ve logged free trips to Alaska, New York, Los Angeles (countless times), Milwaukee (countless times - kids under 2 fly free and boy did we know it), San Francisco, Denver, Florida, Charleston, and Minot.
We've used our hotel points and free nights for everything from local getaways to $600 suites in the heart of Paris.
Speaking of free lodging…
I’ve still got to pay for hotels/Airbnbs, though. Is there any way to do those for free?
After booking free flights, many will be content to pay cash for their lodging. For tightwads with remaining gusto, you may wonder: how can I get free lodging too?
There are two ways that I know:
Free Lodging Option 1: Repeat the Process with Hotel Cards
At the time of writing there's an IHG hotels card (think Holiday Inn, Crowne Plaza, and more) that gives you 125,000 points for signup - along with a free night every year. Or there’s a Hilton card that lands you 130,000 Hilton points.
If you are able to meet the spends, this creates a powerful combo of free flights and free hotels.
Free Lodging Option 2: AirBnB Your House while you're gone
By now, most of us have stayed in an AirBnB. Have you ever considered hosting while you're gone? While you're travelling, the reality is that your house is now unused. If you have time to clean it before you go (and move out any sensitive documents, etc), you could have someone pay to stay in your house, offsetting the cost of your own stay.
This option gets interesting as you may be able to net positive income from your trip (i.e. getting paid to travel).
What is the best card for frequent traveling?
For frequent domestic travelers, the holy grail is the Southwest Companion Pass.
At the time of writing: If you get the SW personal card (40k points) and SW business card (80k points) at the same time you will have 120,000 Southwest points. In the process of meeting those spends, you will add another 6,000 points. This gets your total to over 125,000 points in a year which automatically gets you the Southwest Companion Pass for the rest of the year and the following year.
The Southwest companion pass is a reusable BOGO pass for flights. When you have the pass, every flight you book with cash or with your giant point stash nets you another free ticket.
tl;dr: For those who can meet the spends early in the year (January being the best), they essentially have free travel for two years (for two people).
And you can repeat it in two years with your spouse. And then you can do it in four years again…
Isn't travel hacking harder to do nowadays?
Anyone who's been doing this for five years or more could regale you with tales from the "glory days" (ask me about my free month in Europe some time).
This is a game that's always changing and it has gotten marginally more difficult. But if I can still get a family of five to the south of France and back for nearly free in 2022, I'd say it's still a game worth playing.
Where can I learn more
This is just an intro post to an entire world of free travel. For more, check out:
(why are they always guys? What about points girls?!)
How do I parlay my big expense into free travel and help support this blog?
Just use the links on my credit card page. One card signup funds this blog for three months.