Your #1 Trick to Earn Thousands of Dollars Toward Travel

Your #1 Trick to Earn Thousands of Dollars Toward Travel

• Wednesday, January 16, 2019

Three years ago I completely changed the way that I book my travel plans, and this change has resulted in my being able to fly almost entirely free ever since. And I'm not talking about a few short distance flights sporadically, I'm talking about multiple flights to my home state of Florida, a cross-country flight to New Mexico and major long distance flights to London, Thailand and Bora Bora (total in-flight time for those last three locations from New York is nearly 40 hours!). The total cost of all of these flights is well over $4,000 - and I paid absolutely nothing for them.

I am sure that this sounds too good to be true, but when I first started following the plan that I am about to divulge, I did not think that it would afford me this. I figured I would get a few perks here and there and didn't give it much thought - I could not have been more wrong!

Laying the Groundwork

So what am I rambling on about you ask? That would be my trick to earn thousands of dollars toward all kinds of travel - by simply using three types of Chase credit cards to accumulate a ton of points - on purchases that I would make regardless.

I first started with my Chase Freedom credit card - which I had opened after moving to New York and had for a few years. This card has no annual fee and awards points equivalent to 5% of purchases made in the categories set for that respective quarter (e.g. gas stations and department stores for October through December).

A few years later, Chase announced that they were launching the Sapphire Reserve card which is loaded with benefits - including a card made out of metal that feels wild. You get lots of fun bonuses like access to lounges in airports, free Global Entry or TSA PreCheck, and no foreign transaction fees for when you travel. You also get award points equivalent to 3% of purchases made on food or travel and, here's the kicker - 50% more value when you redeem your points for travel. This is key as it allows you to exchange your points for dollars toward travel at a 1.5x rate. AND this conversion will work for all of the points you accumulate across Chase cards - as long as you transfer them before using them. There is a slight downside - this card comes with a $450 annual fee, however, you get a $300 statement credit for travel expenses that you spend during the year so it nets to only being $150/year out of pocket (which is more than offset by the money toward travel that you will receive as long as you use the card!).

Lastly to close the loop, I opened the Chase Freedom Unlimited card which has no annual fee and no frills other than the award points equivalent to 1.5% of purchases on anything.

Having these three cards guarantees that I will earn back between 1.5 - 5% of all purchases and be able to spend these points on travel (think flights, hotels, rental cars) at a rate of 1.5% (i.e. 50,000 = $750 toward travel).

Putting The Trick Into Practice

Every time that I make a purchase, I consider what category it falls into and use a simple decision tree to determine what card to use:

1. If it meets one of the bonus categories for the Freedom, I will use that
2. If it does not meet the bonus categories but is food or travel related, I will use the Reserve
3. If it does not meet either of the above, I use the Freedom Unlimited

Here's a handy guide to depict this decision process:

Easy right?! Then each month I transfer all of the points I accumulated to my Reserve account - where I book all of my travel at the 1.5x exchange rate.                                                                                                          

Another great thing about this process is that the Chase rewards site where you book the travel is super easy to use. It functions very similar to a discount travel site where you can search for flights, hotels and rental cars across companies easily. And I have found that the dollar value on the Chase site is identical to discount travel sites so you are not losing any value by booking this way. Lastly, if you do not have enough points to book a particular reservation, you can apply the quantity of points that you would like and pay for the rest in cash - easy!

The Bonus

The other great perk with these cards are the epic sign-on bonuses. As of January 2019, signing up for these cards (if you do not already have them):

1. Sapphire Reserve offers 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening
2. Freedom offers $150 bonus after you spend $500 on purchases in your first 3 months from account opening
3. Freedom Unlimited offers a $150 bonus after you spend $500 on purchases in the first 3 months from account opening plus an additional $50 bonus after you spend $5,000 in the first 12 months

The Important Things to Know (Don't Skip This!)

                                                                                   

Now that we have gone over all of the exciting bits, it is only responsible that I advise you to proceed with caution.

Firstly, opening a new credit card account is not something to be taken lightly. When you apply for a credit card, the company will run your credit, which if done too frequently can negatively impact your credit score. Keep in mind that to protect your credit, you should wait at least 3 months between opening the new credit cards. If you have several credit cards already, you may want to consider waiting six months as an additional precaution. Additionally, if you will need to have a strong credit score in the near future to purchase a home or car or take out a loan, etc, you should hold off on applying for any new credit cards.

It is also possible that you will not be accepted when applying for a credit card. Different cards have different standards for who will be accepted. If you are rejected, do not be discouraged, you can always apply again in the future when you are able to increase your credit score.

Lastly, but  most importantly, if you are someone that has difficulty managing your spending with a credit card you absolutely should not try what I have outlined above. Credit cards should only be used for this purpose if you are able to treat them like debit cards - meaning you spend on the card and pay off the full amount each month to prevent any accumulation of debt. This requires that you meticulously track your spending to ensure you are not living outside of your means. This plan isn't for everyone, and if you feel that you may find yourself in this position do not attempt this.