Travel for free - the best credit card airline rewards and travel miles strategy mind shifts.

In 2022, after years of improving our travel planning and budgeting our family of four paid less than $3,000 for over 40 days of travel during the year...total...using mainly credit card airline, hotel and other travel rewards. It can be overwhelming to know where and how to start with best credit card travel points and how to build a good strategy for travel points. I suggest some mental resets and mind shifts even before applying for your first credit card airline or hotel rewards card and forming a strategic, consistent plan.

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1. HOW TO GET STARTED - MENTAL ADJUSTMENS AND HELPFUL HABITS

To break down all the details of how we travel for (almost) free and how years of perfecting our flavor of what many call travel hacking yielded the largest bang for the buck so far will require more than one blog posts. It will take some time especially since I'd like to ensure even the most novice travel "hackers", who are just getting started are up to speed on all the concepts, but you have to begin somewhere. I feel that sharing more context on some fundamental mental shifts we made when we started using credit card airline rewards is a perfect springboard to staring to write about this topic.

If you're just starting to learn about Credit Card Travel Miles cards and (nearly) free travel it can be very confusing to figure out where to start, partially because various individuals and families' situations are very diverse but also because there is just so much information out there. My hope is to break this process down for you in way that will be easier to follow and understand and so before you jump into any actions, I would recommend you focus and think about a couple of mental changes and habits that may be new to you first that will hopefully at least answer some of your initial questions and help you figure out if credit card travel hacking is for you.

You probably already know as much, but some banks offer credit card travel points in partnership with travel companies (like an airline or a hotel chain) for signing up for, and spending money on their credit cards. Those rewards and especially the points based initial sign-up bonuses tend to have better returns when used for travel than does your typical cash back plastic and hence they are a great way of financing your holidays. As you read this and future posts, please note that I may refer to credit card travel rewards also as credit card airline rewards or credit cards for hotel points as those two types are the most common travel rewards but as you either already know or will find out soon as you embark on this journey with me credit card points can be also used to cover other travel expenses besides airfare and hotel accommodations.

2. MIND SHIFT NUMBER 1 - "CONVENIENCE" VERSUS "CREDIT" CARD

Utilizing credit card travel points for our travel budgeting and financing came with many lessons and tricks picked up along the way but what was equally important for us was a mind shift when it came to using credit cards. In fact, our evolved strategy today is equally heavy on learned tricks and rules as it is on many mentality changes and habits we had to make in order to maximize our travel.

It started with the realization that in order for us to optimize our plan we had to make a few sacrifices and figure out a way to funnel as much of our spending and payments as possible through our travel rewards credit cards.

This meant that we had to get even more disciplined paying our credit card balances every month as many of these best credit card travel miles cards carry fairly high interest rates. Not a problem, we're way past our teens and twenties, those younger days where many of us learn the hard way that borrowing money (because that's what using credit cards and not paying off your monthly balances is) comes with many strings attached like interest charged and late fees. So as I blog about the ways we use credit cards today to save and budget money on travel keep in mind that we really don't use them as CREDIT cards and you will see me refer to them as "convenience" cards instead quite a bit because that's really more of what they are to us today and that is in fact the first mind shift I suggest you make if you're trying to get started with credit card travel rewards.

We don't use payment cards for credit, we really use them more for the ease of paying and of course now also to travel more and so before I proceed with any further tips on what you've heard many call travel hacking (and what I prefer to call travel budgeting, or to be exact travel saving through best credit card travel miles cards) I suggest you acquire the same convenience vs credit mindset and make sure you pay off your balances every month before they accrue interest.

3. MIND SHIFT #2 - FUNNEL ALL YOUR PAYMENTS THROUGH YOUR TRAVEL REWARDS CARDS

But I wanted to write a little more about another mentality change, and that is funneling all your spending through your (convenience not credit 😀) cards. In order to maximize the travel points earning and especially the sign-up bonuses on your cards, allowing you to move from earning a bonus on one card to another as quickly as possible you have to try to pay for everything with your travel reward credit cards.

We practically threw away our debit cards. You could also say we forgot that we owned checking accounts and only visited them once a month, basically for the sole purpose of paying off the monthly balances on our travel reward credit cards.

The ideal state for us is for those transactions coming out of our checking accounts to be solely for that purpose, of course not everything can be paid with a credit card and a perfect example of that is one of the biggest monthly bills you might have which is your rent or mortgage, or can it? There are actually some services that will allow you to pay those expenses as well with a credit card so while I will hold off to write in more detail about that another time feel free to check out Plastiq.com if you're already savvy enough in the topic of credit card travel rewards and have been looking for a way to maximize earning them. Beware that there are fees involved in doing this and let me be clear that if you struggle to pay off your credit cards on a monthly basis today, I do not recommend you do this or really do any of what I write about in terms of using credit card airline rewards or any other credit card points for that matter. I will take this opportunity to also emphasize the fact that I'm not any type of financial advisor and I'm simply sharing my and my family's experiences.

4. INCURRING FEES TO PAY WITH A CREDIT CARD MAY BE WORTH IT... OCCASIONALLY

To illustrate my point about funneling as many transactions as possible through credit cards I will use an example of an action we recently took in the context of our travel saving/ budgeting strategy and that's paying our property taxes with one of our best credit card travel miles cards. We did so despite a 2.1% fee on this transaction in order to satisfy a spending limit on this newly obtained card and earn its sign-up bonus as soon as possible. That consequently allowed us to turn most of our attention to using another credit card airline rewards card and start working on earning a spending bonus on it next.

In order to show and justify our paying the nearly $5,000 property tax bill along with a $100 fee with a credit card I will have to include some travel budgeting math.

Much of our travel budgeting focuses around maximizing the sign-up bonuses on these travel rewards credit cards. In order to do so we often plan to satisfy the spending limits to earn those bonuses as soon as and as often as possible because it simply allows us to repeat this more quickly and often.

This particular example applies to one of our business favorite credit card airline rewards cards. If you decide to explore the United cards consider the business cards if you qualify since they are usually a better value but while in this case we used a business credit card to pay our business property taxes this example can easily apply to personal cards and personal property taxes as well.

Here you can see all of our favorite travel rewards cards. Keep in mind that we don't typically apply for anything with a sign-up bonus of less than 50,000 (preferably at least 60,000) miles and always analyze if the annual fee is worth it so we consider these the best credit card travel miles cards for our specific purposes, but you might need to figure out which ones work the best for you. However, if you have a family of four and like to travel both domestically and internationally chances are your needs will be very similar to ours and of course with time I'll help you determine that as best as I can, but back to my example.

5. THE MATH ON PAYING PROPERTY TAXES WITH AIRLINE REWARDS CARDS

So, we chose to pay the $100 fee because this particular card had a $5,000 spending limit for a bonus of 75,000 miles which is 15,000 miles more than the $60,000 you need for a round trip ticket to Europe with United Airlines. This transaction earned us an extra 5,000 miles on top of that since for each dollar spent we also earned an additional mile. Note that the actual tax bill was slightly under $5,000 so we had to make another small transaction on top of paying the bill, but there is a reason why we decided to incur the $100 credit card fee to pay our taxes. Since we travel internationally in the summer, when the airfare prices are at their premiums paying $100 transaction fee to earn enough credit card airline rewards for a round trip ticket (plus more miles in this case) was well worth it. This particular credit card also has a $95 annual membership fee so my return-on-investment math equation needs to take that into account as well.

The return-on-investment analysis is really quite simple in this case. So, we paid $195 for 80,000 credit card travel miles. In our experience $1,500 is about a fair, realistic price you can pay for a round trip airfare for one person to Europe in the summer and that may have gone up recently but let's assume that it's still the case. Therefore, considering that it takes $1,500/60,000 miles (producing a $0.025 dollar per mile rate) for this round-trip ticket that means that our $195 investment gave us at least a $2,000 ($0.025 × 80,000 = $2000) gross return, or a net return of $1,805 ($2000 - $195= $1805). As you can see this well justifies paying both the credit card annual fee as well as the actual fee for this tax payment transaction.

6. YOUR INDIVIDUAL OR COLLECTIVE NEEDS AND WANTS SHOULD BE A FACTOR IN YOUR PLAN AND ITS MATH

Now there are a couple of points I need to make with this example. For one, if it was just one of us and not a family of four, we would probably end up not paying this transaction fee and instead spent the required $5,000 over a longer period of time like its dictated maximum of 3 months simply funneling transactions that can be made with a credit card without paying fees. However, since there are four members in our family in order for us to earn enough credit card airline rewards to finance the airfare for all four of us, we have to repeat this process multiple times and so again, as I mentioned above it makes sense for us to pay the fee to be able to speed this up.

Therefore, my point is that in order to be as successful as possible in this travel hacking strategy you have to find ways to pay as many things as possible (that you pay for today with a checking account or a debit card) with a credit card instead. That will sometimes involve paying fees. While I don't typically recommend paying such fees my point is that sometimes, or depending on your individual situation it may be worth doing so don't write it off, consider it at times and of course make sure that you really crunch in the numbers to confirm it makes sense.

7.FINAL TAKEAWAYS

So, if you're new to all of this I'd like to make sure you take away two points from this write-up. Know that getting into travel credit cards and turning it into a true travel funding strategy involves important mind shifts and disciplined habits, two of which I described above as perhaps the most key for someone just starting out.

To recap, first of all and most importantly you have to think of your credit cards as convenience cards instead, pay off your balances on a monthly basis and avoid accruing interest otherwise obtaining multiple cards and maximizing travel points earning on all of them is likely to get you into a lot of trouble. Also, guess what, none of my numbers' breakdowns like the one above will apply since they all consider zero interest paid on your monthly balances and no late fees, which of course is a bit different than paying one time transaction fees like the one I mentioned above.

Secondly, find as many of your regular bills and payments and funnel them through your best credit card travel points cards instead of your checking accounts and debit cards. I'll write about this more and cover for instance how not only did we put away our debit cards but also our medical charge cards from our insurer, but the point is you might have to think a bit out of the box to ensure that you're truly maximizing your travel points earning opportunities.

Finally, if you're struggling with bringing your credit on track knowing that you really need to get it and keep it in tip top shape in order to travel more can be a great motivator to do exactly that.

On the flip side, if you're worried that these actions will ruin your credit don't stress too much. There's certainly potential for that to occur but if you apply the same discipline that got you where you are today that's not very likely.

I will share more on all of these topics very soon, so I hope you'll stay tuned, consider subscribing to my blog via email (see form below) and following me on Instagram and Facebook.

If you enjoyed this post be sure to check out other topics on the rest of my blog at www.maxyourtravel.com and the above mentioned Insta account for other write ups, visuals, travel tips and reviews especially for travel crazy or starved families but also for anyone how wants to max their travel!

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