I just read Nomadic Matts book on “Travel Hacking”; a way to earn free hotel stays and flights through award point systems via credit cards. Nomadic Matt is from the US and so a lot of the benefits he discusses are geared towards Americans or outsiders with green cards. Matts book led me to a popular Canadian Travel Hacker, Jeffery Kwok, Founder of the blog ‘Canadian Kilometres’ where he discusses all the ways Canadians can legally acquire points through various credit cards to fund their travels! He has an incredible amount of knowledge on the Aeroplan system and the most efficient ways to redeem points.
Basically the premise is as follows: Think of your goal. Is it to acquire free hotel stays? Travel within North America? Travel abroad? Now, find the best promotions that credit card companies have going on currently (usually it’s one with a decent high sign up bonus), apply for it, make the minimum payment to receive the bonus and VOILA, you just made a ton of travel money. A lot of cards have an annual fee that is waived the first year, so make sure you cancel the card within a year to bypass the fee. Each card is unique in what it specializes in and the key is to use the card to its full potential.
Matts book talks about manufactured spend wherein you get points by not having to spend money. For example, with Amazon, you can transfer money to a friend using your credit card, thus getting points! Then simply ask your friend to write you a cheque for the money you gave them. Since credit cards have a minimum spending requirement to get bonus points when you sign up for a card, this is a great way to do that. The limit is $1000 per month for amazon transfers.
If you have a bit of time on your hands and love traveling, then I highly suggest you to go Jeffery’s blog to see all the travel hacking you can partake in to get you more miles and use the points in the best way possible. Here are some other tips learned through Matt’s book and Jeffrey’s blog:
- Sign up for airline newsletters to see any upcoming promotions
- You can pay your taxes online via a variety of companies (get more points!)
- Look for airlines that have low or don’t have any ‘fuel surcharges’ because that can sometimes wrack up to over $600.00 Round trip! Here are airlines with no fuel surcharges: United, Air China, EVA AIR, Avianca, Turkish Airlines, Brussels \Airway, Copa Airlines. You will most likely have to fly out of the states to use some of the airlines so the feasibility can depend on how close you reside to the border. Buffalo is super close to me J!
- If your destination is not fixed, pick places with lower surcharges then others
- Awardwallet.com – tracks your rewards from a variety of different reward programs so you can keep track of your points.
- If the flight is extremely cheap, don’t use your points because you aren’t getting the best bang for your buck (unless you have no money and don’t really have a choice).
Did you also know that if you have a connecting flight somewhere, you can actually STAY in that destination until you are ready to move onto your final destination?! As long as you call the airline with your travel itinerary and make sure it works out with the airline, it’s good to go! This was an O-M-G moment for me. Travelling life will not be the same from here on out.
The main question you might be asking is will having all these credit cards hurt your credit score? The answer is NO. Although your credit score may drop initially (so don’t go buying any houses within the next few months), in the long run it will have no effect on your credit score; it can actually be advantageous because the lower your credit utilization rate, the better your credit score will actually be! For example, you spend on average $2000 per month with a credit limit on your card of $5,000. Now you get a new card with a credit limit of $10,000 and that brings the total up to of $15,000 credit available. Because you are only spending $2,000 on such a high credit limit, your credit utilization rate will be lower – thus, yay for more credit cards! What is extremely important in this scenario is that you pay off your credit card EACH month.
Also, if you cancel a card after a year, you can re-apply for a slightly different card at a later date as well. (They are always coming out with new cards). You can’t re-apply for the same card and get the same bonus. Before cancelling a card, try negotiating with credit card company to see if they’ll waive the fee for another year.
Some starter cards to consider:
- TD Aeroplan Visa Platinum
- American Express Aeroplan Gold Card – American Express Aeroplan Gold Card – Through THIS referral, earn 26,000 Bonus Aeroplan miles when you spend 500$ on your card in 3 months! This bonus is 1,000 more than you would receive if you just applied for the card online.
Hope you all got something out of this post! Now start gaining those points and go travelling! :D
And remember, pay off your credit cards every month or all this is for nothing!