Travel Hacking
Wasting money = wasting our lives.
Don't get me wrong- I am all about being playful with money. Learning from mistakes. Feeling the feelings about decisions we make, so we can make them differently in the future. This relationship with money is lifelong, and there is no perfection.
And, it takes us time to earn the money that we do. Even if you LOVE what you do for work in the world, odds are it takes a certain amount of preparation, commuting, sitting, etc. When we waste money, it most often represents wasting a certain number of hours of our life that it took to earn it.
Hence, I love helping people save money AND time.
So, here's a tip for saving money on Credit Card fees, and earning more with 'Travel-Hacking':
I've been meaning to up my travel-hacking game, or using-credit-cards-to-my-advantage game. I want to travel more, and I'd say more than 90% of new clients mention it as a priority in their prep work with me.
I've historically been good at applying for a couple new credit cards per year in order to get the sign-up bonuses (often valued at $600-1200 or more).
However, my annual travel costs have gone up significantly since adding two humans to our family, so I've been wanting to get better at my strategy.
How DID I SAVE $300 in 20 minutes yesterday?
I called Chase, Jet Blue, and Alaska (with the number on the back of each card), and asked to downgrade to a card without an annual fee. I realized I had let another annual fee come through recently for all of them - and that I was not benefitting enough from the cards to justify it.
In case you don't know this, by downgrading a card:
Your CC number remains the same
There isn't a hard pull on your credit report
Your available balance remains the same
You can get rid of an annual fee, and they'll even REFUND you the pro-rated amount of the annual fee you last paid.
All it takes is a phone call!
I hope a few of you save some money by inspecting your list of currently open cards and seeing what would make sense for you. You may decide the annual fee is worth it for some cards, for example Alaska if you tend to use the companion fare.
One warning: With some companies, the 3-digit security code on the back of the card and the expiration will change - with others, it won't. So if you have anything on auto-pay from these cards, you'll have to pay attention to that.
How am I upping my travel-hacking game
this year?
*I recommend this only for those of you who have managed to pay off all of your past credit card debt, and who pay off their cards in full every month.
I'm going to rotate the card we use for all our spending until I've gotten the sign-up-bonus, then I'll apply for another card.
I'll rotate who applies for a new card each time, so that it's not too many pulls on either my credit, or my partner's.
I'll either downgrade the card before the annual fee comes due (after getting the sign on bonus), or I'll simply close the card. Some cards charge the annual fee right after opening, and that's OK- I still view the bonus as worth it. I have enough open lines of credit where I'm confident closing one occasionally won't affect my score.
What is the benefit vs the hassle?
The benefit: Pretty huge! The Mad Fientist says he applies for a new card every 3 months! If my partner and I both do it even 3 times per year, we could add at least $5000 or more to our travel-point-portfolio over the course of the year via the sign up bonuses. (The card I got approved for yesterday alone has a bonus worth $1250).
The hassle: You need to keep track of your cards and when you're eligible for bonuses from various companies either on a spreadsheet or one of the apps mentioned in the resources below. Also make sure you (and your partner if applicable) are always clear what card(s) you're using for your day to day spending. You want to get the sign on bonus to make the effort worth it!
How I hope it will be easy: Again, when we get a new card we'll just use it for everything we buy for a few months, until we've qualified for the bonus. I often pick ones that want you to spend maybe $3-4K over 3 months, which is pretty doable. Once we've gotten the bonus and I've lined up another card, I'll put the first one away and make a note in my calendar (and the spreadsheet I made) for when I should downgrade it or close it based on the annual fee.
And if it doesn't turn out to be 'easy' or worth it? I'll go back to my old strategy of just doing it when I remember to, because, as I've shared, I do value convenience these days.
Where can I learn more?
If you're a current client reading this, I'm more than happy to go over your scenario with you during a session! You can also visit these resources to learn more:
Free Course on travel-hacking (awesome resource from the Choose FI guy)
If you have any great stories about your own travel-savviness, I'd love to hear them!
Thanks for reading, as always, -Emily