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Have you heard or read about earning and using miles and points to get free flights and hotel stays?
Does it sound too good to be true?
You’re not alone!
From blog comments to questions in my Facebook Group, Travel Hacking Study Hall, to everyday questions from family questions, it’s clear there are several common misunderstandings about travel hacking.
In this guide, we’ll try our best to debunk them!
Myth 1: Opening up credit cards lowers your credit score.
When you initially sign-up for a credit card, your credit score can temporarily dip 2-5 points.
If you’re responsible with your spending and about paying your monthly balance, this will be short-lived.
In addition, you’ll increase the amount of credit that is extended to you, which helps your debt-to-credit ratio, an important factor when calculating your credit score. It could even be enough to offset the dip you’ll see for the new application.
Remember, banks are running a business and they want to attract the best consumers to their products.
Myth 2: Signing up for credit cards just to get the bonus is bad for your credit.
If you sign up for credit cards, earn and burn the bonus, and then close the card only having had it for a few months, yes, it could negatively impact your credit score.
It will also make it difficult to get approved for other cards from that bank and other banks in the future.
However, if you target a welcome bonus to reach a travel goal, and show yourself to be a responsible and creditworthy customer by using the card (even for small purchases), paying all your bills in full & on time, and keeping the card open for at least a year, it’s not bad for your credit at all.
In fact, the more lines of credit you have available to you, while only utilizing a small piece of that credit for monthly expenses, will give you a low credit utilization percentage, which is excellent for your overall credit score.
Myth 3: It must be “breaking the rules.”
Banks view their credit cards as products. These products come along with terms and conditions, of course, but they also come with bonuses and perks. It’s not “breaking the rules” to take advantage of them.
Consider these examples.
Grocery store promotions around the holidays offer a free turkey or ham if you spend a certain amount of money within a given period of time.
Coffee Shops, Sandwich Shops, and Nail Salons sometimes have member cards, where after purchasing 10 cups of coffee, 10 sandwiches, or 10 manicures, you get the 11th for free.
What about a local gym that offers a membership for $1 the first month and a discounted promotional rate for the remainder of the year?
It’s not “breaking the rules” to take advantage of these perks and promotions. It’s certainly not “breaking the rules” to apply for a travel rewards credit card to earn and burn miles and points for award travel.
Myth 4: It takes a lot of spending to earn a lot of points.
You never, ever want to spend more than you can afford to pay off at the end of a month.
Over time, the interest you’ll pay for carrying balances outweighs the value of the miles and points.
Use your credit card to pay monthly bills like cable, cell phone, internet, Netflix, and insurance. You can earn points for the money you already spend on these expenses.
Many travel rewards credit cards, as well as co-branded airline cards and hotel credit cards, come with bonus categories that offer 2-5x the miles and points for purchases like gas, groceries, travel, and dining out.
Knowing when to use which card is the key to maximizing your miles and points earnings.
You can also sign up for airline and hotel dining programs to earn miles and points in addition to what you’d earn from a credit card that offered a dining-out bonus category.
Utilize airline and hotel shopping portals to get even more value from the things you already buy.
It’s not about spending more, but about spending wisely.
Myth 5: It’s too complicated to keep track of all the points and loyalty program benefits.
Being organized is important, no doubt about it.
It doesn’t have to be complicated, though.
Beginners can start out with a simple spreadsheet listing important information, like account/membership numbers, point balances, bonus categories, and if/when any miles or points could expire.
Myth 6: It’s not worth it!
This one gets me all the time!
This is like telling someone who regularly goes to the gym and has lost 20 lbs. that it’s not worth it. I guess it’s hard to understand others’ skepticism when you have had such amazing results.
Here are just some of the places my husband and I have flown on award flight tickets to and/or from:
- Finnish Lapland,
- Costa Rica, and
- Turks & Caicos.
I’ve flown family members on award tickets to London and the Canadian Rockies. I’ve also flown to and/or from South Africa, Chile, Argentina, and Thailand…(yep you guessed it!) all on award tickets!
And, this list doesn’t even include everything, nor does it list domestic award flights or award hotel stays I’ve gotten with points!
So, when I’m asked if travel hacking is worth it, I smile widely and confidently say, “Absolutely.” (How else could I afford all of this on a teacher’s salary?)
Which travel hacking myth is getting in your way?
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