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My First Credit Card Churn

Thursday, April 21, 2016

Who doesn't want to travel all over the world for practically free? For about a year I have been reading about travel hacking/credit card churning, and in November I decided to try it for myself. All the reading I did made it seem so scary and overwhelming, and it definitely can be depending on your strategy. If you aren't familiar with travel hacking, it is signing up for multiple travel credit cards and redeeming the points for plane tickets and hotels. Here's what I've learned in my first 6 months.

6 things I've learned in 6 months of travel hacking

1. Research. 

Here are the articles that were most helpful to me.
Travel hacking 101 - Budgets Are Sexy. "We go one card at a time and just concentrate on that one single card. I’ll open an account in my name and add Laura as an authorized user. We’ll spend on that account until we hit the minimum spending requirement and then we’ll take those cards out of our wallet."

4 Things I Learned About Travel Hacking - Emma Lincoln. "
The tickets to Thailand aren’t actually all that expensive. For some months, they’re under $800. For a 22+ hour flight across the world, that’s pretty good. BUT…using points gives us the option of staying a couple days in Tokyo on our way to Thailand. For the same price!"

Credit card churning and why it's not worth it. 

Beginners Guide to Travel Hacking - Chris Guillebeau. "I’ve found a bank that will pay AAdvantage Miles in lieu of interest on deposits. Why give up interest (real money) to earn miles? Well, these days interest rates are shockingly low."

Beginner's Guide to Miles - One mile at a time. "So you can truly earn more miles and points from your everyday spending than you can from flying."

Free class! Travel Miles 101. This class gave me the courage and motivation to finally sign up for my first travel card.

2. Be responsible with your credit cards. 

If you can't pay off your balance every month, there's no point in getting started. I've mentioned on this blog before that I had credit card debt before I got married. I'm so proud of myself that I haven't continued this cycle, and I've been paying off the balance every month.

3. Research and pick your first credit card. 

The Points Guy has a great website that is constantly being updated with the latest and greatest credit card offers. For my first card I picked Chase Sapphire.

4. Sign up for your card when you know that you can meet the minimum spend for the bonus

For Chase Sapphire the reward was 50,000 points if you spend $4,000 in the first three months. I signed up for the card in November, so I could use it for my Christmas spending (which I already had saved in a separate savings account) and I knew we were buying a new loveseat and already had the money saved for that. If spending $4000 is going to be difficult, plan it around a home renovation project or other large expense. We are planning to either re-landscape our yard or buy a new oven later this year, which will be a perfect time to sign up for a new credit card.

5. Make it easy

There are some very complicated methods of travel hacking, but I wanted an easy plan. I sign up for one card, put all my spending on that card, meet the minimum bonus, take the card out of my wallet and stop using, get a new card and repeat. So far, I've gotten the Chase Sapphire card, my husband got the Delta American Express card, and I got the Delta American Express. I just got my Delta card yesterday, but I plan to meet the minimum with only one purchase. We've been planning and saving for several months to buy new chairs for our library. I plan to make that purchase (the next time the chairs go on sale) and then pay off the card immediately because we already have the money saved. I started researching my next card, and it will either be Starwood American Express or IHG Chase Rewards.

6. Use your points right away

How have I used my rewards so far? My original goal was to buy our plane tickets with miles for our upcoming Alaska cruise. And we succeeded! Extra bonus: We're spending 4 days in Seattle and I'm using the Chase Sapphire points for free hotel stays. The points that we're using are worth about $1800! Points don't increase in value over time. It's more likely that the point system can change and your points will lose value the longer they sit.

My next travel dream is to fly to Europe and use points for two plane tickets and at least 5 days of free hotels. I'm already starting to plan my strategy.

I'm a newbie to travel hacking, but if you have any questions let me know in the comments.

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