How often do you use your credit card?
We hardly use ours at all. In fact, we love to use cash. It helps us avoid the potential never ending spiral of credit card debt.
But all that is about to change.
Our next big adventure is into the world of credit card rewards. There’s a big wide world out there and we want to reap ALL the benefits!
I first heard of travel hacking about a year ago. Since then I’ve listened to podcasts, read blog posts, and researched to compare the travel rewards of various top ranked cards. One of my favorite podcasts on travel hacking is from Andy Hill of Marriage, Kids, and Money.
I’ve read so many articles about people who went on vacation to Disney or Hawaii for less than $100 total. The idea is intoxicating, but I’m so nervous to jump in and apply for a credit card.
Warning! Please Don’t Skim Over This!!!
If you’re in major debt, especially credit card debt, DON’T ATTEMPT TRAVEL HACKING!!! Credit card debt is crippling, and if you’re already struggling to spend responsibly, travel hacking is a dangerous game and will probably only send you spinning further out of control
I want to restate that I’m not an expert. Please only use travel hacking strategies if you’re in control of your spending and debt.
Here’s Our Plan to Start Travel Hacking
The only credit card we have has terrible rewards and perks. It’s just a standard credit card through Wells Fargo. It serves our needs fine for buying school supplies and getting reimbursed, but otherwsie it’s pretty limited. We know we can do better.
Step 1: Practice with the Card We Already Have
We want to test our ability to be responsible with a credit card. In our mission to pay off our student loans, we’ve proven to ourselves that we can be self disciplined and make smart money decisions. However, we know it’s really easy to get off track.
The month of December is our “practice” month. We’re going to use our credit card as much as possible. Any monthly expenses that can go on the credit card, will go on the credit card. No cash, all credit. I guess that means we can finally use the “self checkout” line at SAMs Club! 🙂
If I’m being honest, I’m actually pretty nervous about using our credit card so much. We’ve been so focused and determined not to use it that it feels like we’re breaking the rules. Don’t tell Dave Ramsey, haha.
Step 2: Create an Efficient System to Track All of Our Expenses
My fear in using a credit card is the possibility of spiraling out of control on a spending spree, racking up thousands of dollars of debt. The reason I love using cash so much is it’s almost impossible to overspend. When the cash runs out, you can’t spend anymore. Easy cheesy.
Even when we’ve used our credit card to buy school supplies, we’ve occasionally lost track of what we bought. As a result, we had to dip into other parts of our budget to cover the costs and accrued interest. For the record, I hate paying interest! It sucks. Anyone else feel the same?
Our initial system is really simple. I just added a new tab to our budget spreadsheet with 4 columns. We want to keep track of the “Amount Spent”, “Budget Category”, “Month of Budget”, and “Date”.
I definitely need to track how much is spent, that’s a no brainer. Next, I want to know which budget category it comes out of. I think this will help us the most to stay on budget without going over. Then the date and month of the budget are a couple final details to help me stay organized and not lose track of what we spend money on.
Step 3: Reflect and Adjust to Improve Effectiveness
Personal finance is a constant dance of reflecting on what works and what doesn’t, then being willing to make changes. As the month goes on, we will constantly talk about our new adventure.
First off, we only have one credit card and it’s in my wife’s name. So since we’ll be sharing it, we need to know who has it so we can truly use it for all of our purchases.
If we find new tracking systems or tips, we’ll switch things up. We’re pretty flexible people and will do whatever works. If you have any tips for us, we’d love to hear what works for you! Drop us a line in the comments!
Step 4: Research and Find the Best Travel Cards for Our Trips
Our first big vacation will be to Ireland for our 5 year anniversary in 2019. I’ve read that certain credit cards are better suited for specific airlines, destinations, or hotels. As a result, it really does matter which card you use. We want to get the maximum rewards and save as much money as possible!
I’ve done basically no research to know what works best for Ireland. We love flying Delta, but if another airline gets us better rewards, I’m perfectly fine switching it up.
Every card has it’s own bonuses and rewards too. For example, the Capital One Venture card offers 50,000 Bonus Points if you spend $3,000 in the first three months after opening your account. It’s important for us to capitalize on a big bonus and then accumulate points on what we already spend money on.
A blogging friend of mine Lee runs a great site called Bald Thoughts. It’s all about traveling more and spending less. I’m going to talk with him and dive deep into his blog to learn everything I can. Check out his treasure trove of resources!
Step 5: Open an Awesome Travel Rewards Credit Card and Stock Up Points
Fingers crossed that December goes fabulously! Once we get the kinks worked out, it’s onto the real thing. We’ll open up a card and watch the points add up. Then in a year and a half, hopefully we’ll be on our way to Ireland with giant smiles on our faces from saving so much money! 🙂
Our Journey to Travel Hacking Starts with a Single Purchase
We started our journey today with our plain old credit card and entered the initial numbers into our credit card tracking spreadsheet. Wish us luck on this new adventure. I’ll keep you updated on how we’re doing and what we learn!
Let Me Know in the Comments
What do you think? Anyone else into travel hacking? Do you have any tips for a newbie travel hacker like me?
You’ve developed the discipline to track your spending diligently. You should be rewarded. If you feel yourself slipping, don’t mess around. Go back to your previous methods.
There are lots of ways that the credit card companies can win in this “game” we’re playing: (1) Us spending more than we normally would just to hit the minimum spending requirement (2) Annual fees (3) the delays it takes to actual “receive” the points
I wish you the best of luck! Have fun with it and be safe.
That’s good advice. If it ends up not working for us, we’ll just have to go back saving up money the old fashioned way. We definitely don’t like the idea of an annual fee.
Good for you, I hope you have an awesome trip!
My wife recently signed us up for a ‘companion’ card. Once per year it allows her to bring a companion for $99. Unfortunately it’s with an airline that doesn’t fly much outside of North America but it looks like it’s going to get us both to FinCon next year 😀
That’s a big win! We really want to go to FinCon too. Maybe we’ll be able to use some perks there too. There are so many options and so many rewards out there!
I think this is really smart. Travel hacking is definitely enticing, but it can spiral fast if you don’t have control when you use credit cards. But we did fly 4 people to Hawaii for $98, so I’m personally a big fan ?
That’s really impressive! It’s stories like that where I’m like “holy crap, we need to get on this!”
We’re getting pretty close to having our system down and pull the trigger!
Good luck with the plunge into travel hacking. Racking up the miles and points is all about the bonuses. I’ve earned millions of miles in the last 5 years. Let me know if you have any questions.
Thanks! We’re excited to take the plunge!
Another way to help ease your transition from cash to card is to turn on the credit institution’s app notifications. Set them at zero and you will get a little pop up on your phone with the store and amount after every purchase. This helps with the reinforcement that you are spending $ and not just swiping!
I’ve had great experiences with travel hacking. Good luck!
That’s a great idea! I’ve always got my phone nearby so it would be easy to use the notifications to keep my budget out to date.
Thanks for the tip!