Inside: There’s a lot of confusion around travel hacking—and for good reason, it is a confusing thing to do. But that does NOT mean it’s not worth the hassle! Here are some of the most common travel hacking myths.
Be honest with me.
When I told you last week about the basic nuts and bolts of travel hacking, did alarm bells start going off in your head?
I know. They did in mine too before I started travel hacking too.
It’s a good thing for you to be skeptical; the world’s far too full of people who fall for stupid BS. And that goes for travel hacking as well. It’s a great strategy, but it’s not foolproof, and it’s not as easy as people make it seem.
In fact, there are tons of myths out there about travel hacking. Here are some of the most common:
- 1 Travel Hacking Myth #1: It’s Easy
- 2 Travel Hacking Myth #2: It’ll Ruin Your Credit
- 3 Travel Hacking Myth #3: Anyone Can Do It
- 4 Travel Hacking Myth #4: It’s Totally Free
- 5 Travel Hacking Myth #5: You Need to Spend As Much As Possible to Earn Rewards Points
- 6 Travel Hacking Myth #6: You Need to Be Debt-Free to Do This
- 7 Travel Hacking Myth #7: You Can’t Use a Credit Card to Pay for Everything
Travel Hacking Myth #1: It’s Easy
Let’s get one thing straight.
Until you get the hang of it, travel hacking is about as easy as doing your taxes while juggling quill pens in your underwear while standing on the corner of a busy intersection.
It requires a ton of discipline and organization—something a lot of people don’t have. It requires creative thinking and being able to find shit on the internet.
Because you need to be comfortable reading and remembering the fine print of credit cards, airline, and hotel programs. You know, the stuff that’s tucked away and written so small that the Keebler elves couldn’t read it.
In order to be a successful travel hacker, you basically need to be OCD about spreadsheets, research, and processes. (#SpreadsheetNerdsUnite!).
Travel Hacking Myth #2: It’ll Ruin Your Credit
This one does have a bit of a basis in fact. If you rack up debt and/or make late payments, then sure: it’ll ruin your credit. But so will any other debt you take on and don’t immediately pay off in full and on time.
In addition, each time you apply for a new credit card, your credit score will be dinged a few points (regardless of whether you’re approved or not). Your credit score can also go down because opening a new credit card decreases your average account age, another factor that your credit score takes into account.
But in the long run? Your credit score will stay the same, or even go up.
Because yet another ranking factor for your credit score is the number of accounts you have on your credit report. The more accounts, the better (as long as they’re all always paid on time). If you keep a travel card or two open to establish a longer credit history, that’ll also help.
In fact, since I started travel hacking, my credit score has gone up by about 100 points (although a lot of that’s due to paying down some of my debt—but you can see that travel hacking hasn’t harmed my credit score).
Confusing? Yes. But I didn’t make the rules. If I did, we’d all be drinking free craft beer and eating free sustainable sushi everyday and not gain any weight. Such is life.
Travel Hacking Myth #3: Anyone Can Do It
We’ve already discussed how you need to be as obsessed about organization and detail as Rain Man.
That aside, you also need a good credit score.
Travel rewards credit card companies don’t just hand this stuff out like candy. They want to make sure you’re a responsible credit user, so they only approve people with a good credit score for these cards.
How good of a credit score?
Brad and Alexi at TravelMiles101 (the best free travel hacking course out there) recommend that you have at least a 700 credit score. 750 would be better, though.
When I started, my credit score was about 680. Some cards are pickier than others, so I started by applying for the lower-end cards. Then, I worked my way up to the big boys like the Chase Sapphire Reserve card.
If you’re not sure what you’re credit score is, you can check it for free on Credit Karma. This gives you your VantageScore, which is a close approximation of your FICO credit score (the one that all the lenders use). Some people call this a FAKO credit score for that reason, but I call them goobers who don’t understand how credit works.
Travel Hacking Myth #4: It’s Totally Free
OK, I confess. This is something I often catch myself saying as well.
The truth is that it’s not totally free. It’s free in the same way that coupons and sales are. You still have to buy the product, but you get a discount. In the case of travel hacking, though, you get a freakin’ huge discount—but nonetheless, it’s not totally free.
Here are some things you can expect to spend money on:
- Fuel surcharge fees
- Credit card annual fees (sometimes they’ll waive them in the first year; sometimes not)
- Anything else on your trip (meals, tours, souvenirs, etc…)
So why do people say it’s “free travel”?
Because you can get the cost of your hotel and flights mostly paid for (like, 95% paid for). And because these are the two largest expenses of most people’s travel, that’s why people say it’s free.
One exception is with the travel reimbursement cards. These cards reimburse any travel-related expenses you incur rather than requiring you to pre-book something with points, so you can pay for some odd travel stuff with these cards, like Uber rides, tours, and cruises. You’re still on your own for meals and souvenirs, however.
Travel Hacking Myth #5: You Need to Spend As Much As Possible to Earn Rewards Points
Boy, if I could slap anyone who thinks this. Spending as much money as you possibly can is the fastest way to wind up in credit card debt.
I get why people would think this, especially when they first open the card and are scrambling to spend enough to earn the sign-up bonus (you usually have a three-month period to spend a certain amount of cash to earn the sign-up bonus).
Instead, you should only put your normal everyday spending on the credit card. Don’t be tempted by sales and shiny things. We’re in this for the long haul, 50 Cent.
That means you need to know how much you spend every month before you open a credit card.
If you don’t spend enough each month to reach the sign-up bonus, then for Pete’s sake, don’t sign up for the card! Choose another one where you can meet the minimum spending amount so you don’t miss out on the sign-up bonus, or worse, get yourself into credit card debt.
Travel Hacking Myth #6: You Need to Be Debt-Free to Do This
This one’s a bit controversial.
There are some people who say you should have zero credit card debt before you start travel hacking. That’s generally good advice, since if you already have credit card debt, chances are you’re not yet able to manage your credit responsibly enough to play this game.
But here’s the truth: as long as you’re 100% committed to a) paying off ALL of the charges each month and b) not spending any more than usual, you’ll be fine.
It’s possible to be committed to those things and still be working to pay off existing credit card debt. But for most people who aren’t sure yet, it’s better to skip travel hacking until you’ve paid off your credit card debt.
Me and Zach still had about $2,800 of credit card debt when we started travel hacking—and yes, part of it was because we were poor credit card managers.
But, here’s why we decided to go ahead with it anyway:
- We knew we could pay off that debt relatively quickly if we hustled our asses
- I knew I could pay off our credit cards in full—in fact, I was so committed to this principle, that I logged into our credit card account to pay off any charges every. Single. Freakin’. Day. No exceptions.
- I knew we could avoid being tempted to spend more, because I was also updating my budget every. Single. Freakin’. Day. (see a pattern here?)
We paid off that credit card debt back in September 2016, and we’ve been credit-card-debt-free ever since, even though we started travel hacking before then.
Travel Hacking Myth #7: You Can’t Use a Credit Card to Pay for Everything
One of the arguments I hear from people is that it’s hard to spend enough to earn the sign-up bonus since most big-ticket items (like rent) can’t be paid with a credit card.
I beg to differ, my friend.
Our apartment won’t accept credit cards, so here’s what we do:
- We buy two Visa gift cards with our travel credit card, and load them with $500 each (the max amount).
- We take those two gift cards to the customer service counter, and buy a money order for $1,000 (our rent).
- We use the money order to pay our rent, since it works just like a check.
This costs us about $10 in fees. See? Again, not free, and not easy.
But it does earn us a buttload of free travel, especially when we’re doing this to help reach the sign-up bonus.
One thing that’s important to note is whether the fees are worth it or not. If we use our Chase Sapphire Reserve credit card to earn points, we can get 1 point per dollar spent on these Visa gift cards. So, $1,000 = 1,000 points.
Each point is worth $0.015 towards travel, so essentially, we earn $15 in travel bucks ($1,000 * $0.015) each time we do this roundabout method. Since it costs us $10 in fees to do this, we really only earn about $5 back, that we can only use for travel.
And because that’s a piddly amount for all this hassle, now I feel kinda stupid for doing it all this time (unless, like I said, we’re going for a hefty sign-up bonus).
Did your head spin with that explanation? If not, then maybe you have the math and organizational skills necessary for travel hacking. And if so, then I hope you give it a try!
If you want to learn the full scoop on how to start travel hacking, I recommend the Travel Miles 101 email course. It’s totally free, and it’s what I used to learn how to travel hack. I highly recommend it!
Is travel hacking what you thought it would be? Would you ever try it? Leave a comment below!