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Travel Hacking

Credit cards are a key component in this travel hacking guideFrequent traveler programs (points and miles) are a mainstay of many people’s travel plans. Here’s our travel hacking guide with our top eight tips for earning points and miles.

When we became frequent business travelers after college, we immediately signed up for all the frequent traveler programs we could. At the time, we weren’t travelling for business all that much (maybe only once a month) and it seemed like it would take forever for the points to accumulate into reward travel. But we signed up for those programs because someone told us to. And we’re glad we did!

Companies offer frequent traveler (points and miles) to secure your loyalty – and get more money out of you. In a way, they are gambling on you to increase your share of business with them. But you can play that game too. Points and miles addicts play the game back and amass huge amounts of points/miles to travel for practically free (as seen in the movie Up in the Air). A popular term these days to explain the game is Travel Hacking.

Everyone has their own definition of travel hacking, but we define it as involving two related goals:
1) Traveling for the least amount of money possible. The goal is to reduce your expenses to practically zero.
2) Traveling above your means by employing upgrades and perks that you would not otherwise pay for. The goal is to make the experience of travel more relaxing and enjoyable.
Travel hacking is about changing the value equation and getting the absolute best travel experience possible for the least amount of money.

We frequently write about maximizing your business travel into personal benefit and how to be a better travel hacker. Here, we share our top tips for travel hacking—

Tip 1: Sign up for all the mileage/points programs you can. You won’t get the reward if you don’t play the game.

Here’s why. The biggest mistake travelers make is not signing up or not signing up early. They say, “we travel so infrequently, we’ll never get the reward.” Initially, that was our thinking. But we signed up anyway once we learned how travel rewards programs work. Now, we tell travelers to sign up for every program they can – because you can never predict your future travel plans. Check out our comprehensive list of travel loyalty programs.

Tip 2: Spread the Love Around – But Don’t Spread Yourself Too Thin

The travel companies offer these programs in the hopes that you will consolidate all of your business with them. And the more you fly/stay with a company, the more rewards you get (they offer incremental 25% or 50% bonuses on their programs once you get to higher-tier levels). This makes a compelling advantage to consolidate your travel rewards programs. But don’t consolidate too much!

First class airline seat

The Holy Grail of air travel

Tip 3: Consolidate Your Travel During Bonus Periods

When you signed up for the programs you gave them your e-mail address and they began e-mailing you (A LOT). You’re skimming those e-mails looking for special promotions and you ALWAYS sign up for every promotion (remember you don’t reap the reward if you don’t play the game). Even if you don’t think you’ll meet the minimums to receive the reward, you sign up anyway (because you can never predict your future travel). All of the major hotel companies run special promotional campaigns or bonus periods. To get the benefit you have to sign up (which takes less than 30 seconds). Another advantage to you, the bonus periods sometimes do not overlap, so you make the choice to consolidate your travel with the company that is currently running a bonus – and reap the rewards.

Finally, the airlines have experimented with this. Back in the early 2000s, United Airlines used to run a lot of mileage bonuses and U.S. Airways ran a Grand Slam program for many years, but those programs seem to have been eliminated. What you still see are selective promotions to launch a new route or on specific routes.

Tip 4: Keep Your Points and Miles Active

The airline and hotel companies don’t want you accumulating rewards indefinitely. They want to see activity – ideally, they want you paying them money for more flights or stays. But they also want to see you using your points (it decreases their “liabilities”). So, in general, points and miles expire 12 months after you earned them, unless you have activity on your account. This seems to be a confusing topic for some people, so let’s look at an airline example.

If you took a flight on American Airlines in December 2012, those miles would expire in December 2013. However, you also took a flight in January 2013, so the new expiration date for both the Dec. 2012 and the Jan. 2013 flight is now January 2014. Every time you take a flight (or redeem your miles by taking an award flight), that expiration date re-sets. BUT, it doesn’t have to be a flight!

I have a lot of American Airlines miles and ultimately will probably use them for a free flight to South America, but I haven’t flown on American in years. I keep those miles “active” by accumulating “partner” mileage. In other words, I spend money with an American Airlines partner and chose to have the reward accumulate with American. Twice a year, like clockwork, my mother receives flowers on her birthday and on Mother’s Day. I order the flowers with the American Airlines shopping mall and get a mileage credit in my American account, which keeps my miles active.

We do the same thing with hotels. Many of the hotel chains (Hilton and Marriott come to mind), offer surveys where they give you points just for taking 10 minutes out of your day to answer a few questions. The points we receive for the surveys keep all of our point totals active for another year.

We recommend using an online points or mileage tracker, such as Points.com to keep track of points/mileage balances.

Tip 5: Sometimes Your Best Reward is Actually the Upgrade

The idea of free flights or free hotel nights is appealing, but sometimes your best perk is actually using the points/miles to secure a travel upgrade. Don’t want to pay $4,800 for a business class flight to Europe? Pay the airline the $800 for the coach flight, and then upgrade with frequent flyer miles. Or, use your hotel points to upgrade to the Club Level and get free drinks and meals.

But – if you’re a loyal guest, sometimes you get the upgrades automatically without paying for them. I travel frequently for business (sometimes weekly) and fly First Class 70% of the time domestically because of free upgrades. This works with hotels too. I’m frequently upgraded to suites or the VIP club level at hotels just because I’m a member of the loyalty program.

Tip 6: Not All Points are “Valued” the Same – Do Your Homework.

It’s true – not all points are valued the same and a dollar is not a dollar in the world of hotel points.

Grand Hyatt Istanbul is a Category 4 in the Hyatt Program and is 15,000 for a standard room (21,000 for the Regency/Club Level). The Ritz-Carlton Istanbul, basically across the street, is a Tier 3 in the Marriott/Ritz-Carlton Program and is 30,000 points for a standard room. The Ritz-Carlton is twice as expensive in terms of points. The W Istanbul is a Tier 5 property in Starwood Preferred Guest and is 15,000 for a standard night. Now, you might think the Ritz-Carlton is the better property, but based on what? A point is not a point.

Some hotels (Marriott) offer more opportunities for bonus points. Therefore the “value” of those points is less than in other programs (the points buy you less; or you need more points to buy the same experience).

Elaborate happy hour spread in the VIP lounge of the Grand Hyatt Istanbul

Elaborate happy hour spread in the VIP lounge of the Grand Hyatt Istanbul

Do your homework. Once you accumulate points in different programs and begin spending them on free travel, some points may prove to be more valuable. Also, if you accumulate large balances in one program or need points in another program, it is possible to exchange your reward points and flight miles between your existing programs.

Tip 7: Points/Miles are Currency – But Sometimes it Takes Cash

Many programs, particularly the airline programs, won’t let you use your miles without a cash fee on top of it. Those fees vary, but you need to factor them into your calculations.

However, one of the biggest changes to the hotel programs in the last few years is the addition of Cash and Points rewards. You put up some points and some cash. This can be either a fantastic value or a terrific waste of points – depending on the property and the room rate for the exact dates you want to visit.

Tip 8: Earn Points for Shopping

All the major frequent traveler programs have mileage malls. Essentially, you earn miles or points per dollar spent in the online malls. If you do any amount of online shopping, you should always go through a mileage mall to earn points for something you are doing anyway. This is a great way to earn large bonuses!

Tip 9: To Get Big Miles, You Need to Go for Credit Cards

To receive the really big mileage/points benefits, you need to sign up for credit cards with their lucrative perks. This is a massive topic and one we’ll be discussing in future blog posts and in our newsletter. Follow the blog or subscribe to our newsletter for more details.

Tip 10: Manufacture Spending to Realize Big Rewards

Once you have your travel rewards credit card, you can earn massive amounts of miles/points through a process of “manufactured spending.” This is essentially legal money laundering where you artificially create spending on your credit card for cash-like products and then you pay off your credit cards. It is a closed-loop system where the money moves around and you are only responsible for the cost of the transaction fees. You can generate massive amounts of miles/points using this system. And while it sounds complicated, our step-by-step guide to travel hacking with gift cards will make it easy!

Do You Want to Learn More?

Sign up for our newsletter, The Fix, where we frequently include tips and tricks, information on bonus programs as well as practical advice on how we are maximizing loyalty programs.

We are the points and travel experts at Go, See, Write. Every month, you’ll find a new article on travel hacking.

Finally, we moderate the Travel Hacking forum on Google+.

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