How are you keeping up with your New Year's resolution? If it had anything to do with traveling more (especially if Thailand's on the list), then we've got something that can help with your upcoming trip. This post is all about how to travel for free with rewards credit cards.
Although we can't take credit for the method, we've personally 'hacked' travel rewards credit cards and earned enough points to cover the price of several flights to and from Thailand. With a better understanding of how to earn these points and applying the strategy yourself, you can too.
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Benefits of Using Credit Card Rewards Points
Generally speaking, there are two types of travel rewards credit cards: general purpose and brand specific. Both give points or miles when you use their credit cards to make purchases. However, they typically give extra points for making specific purchases. General purpose credit cards typically do this for such as gas and groceries while for brand specific credit cards do this with airlines and hotels.
What's most important, though, is that these rewards credit cards give you a large bonus simply for signing up and meeting a minimum spending threshold and paying that balance off within a short period of time.
These points or miles can be accrued and later redeemed for a free flight, car rental, hotel stay, and more. By combining the sign-up bonuses of several rewards credit cards, regularly taking advantage of points or miles promotions, and paying for all your expenses via credit cards, you can earn enough points to cover the cost equivalent of international flights and long vacation stays without having to spend any extra money.
Best Rewards Credit Cards
There is no one perfect rewards credit card. Of the many available, each one offers a unique set of benefits (and some drawbacks) that aren't suited for everyone's travel styles. However, when looking for the perfect card (or two or three), you'll want to consider a few important criteria:
- Points earned versus money spent
- Maximum opportunities to redeem rewards (no blackout dates, no restrictions or caps)
- Annual fee and APR outweigh the value of extra rewards
Additional perks to keep an eye out for include no rewards points expiration period, no foreign transaction fees, and no checked baggage fees. It's also excellent to receive 2-for-1 companion tickets and to earn points if you book with travel partners.
Below are several reward credit cards for various countries that offer substantial sign-up bonuses to help jump-start your traveling goals.
Australia's Rewards Credit Cards
Canada's Rewards Credit Cards
The United Kingdom's Rewards Credit Cards
The United States's Rewards Credit Cards
How to Meet the Minimum Spending Limit
These credit cards have minimum spending requirements. They often amounting to thousands of dollars or pounds in the first few months of sign-up. However, it IS possible to meet the quota without spending beyond your means.
To meet the minimum spending limit, the secret is to pay for items in advance that you would normally buy.
This may sound ridiculously simple, but you can jump-start your minimum first 90-day quota by:
- Purchasing 1,000+ dollars or pounds worth of gift cards at your preferred grocery store(s)
- Buying gift cards at your favorite restaurant(s) (if you eat out a lot)
- Pre-loading generic AMEX gift cards with 1,000 dollars or pounds
Spread your spending out over the course of the 3 months or 90 days to make it easier to pay back the balance each month. Don't buy everything up front unless you can afford to. Otherwise, you'll carry a balance that will accrue interest and that's not good.
Then, use those gift cards to buy your groceries, meals out, or other expenses for months later.
TIP: Some gift cards may have a small loading fee associated with them (around 2 dollars or pounds). To minimize this fee, buy gift cards in the highest denomination possible. Many gift cards are available in 100-dollar or -pound denominations but some brands offer much higher denominations.
Best Techniques to Maximize Your Points
Here are several ways to keep up excellent rewards credit card hacking habits:
- Combine sign-up bonuses of several rewards credit cards to meet international travel goals. Get your partner to do the same to double your points. Or, add an authorized to your existing account for extra points (some, not all, cards offer this).
- Regularly take advantage of points or miles promotions. This might be a 200% bonus for buying a certain product (hotel, airline ticket) with a specific rewards credit card.
- Always pay your credit card balance in full. If you don't, the accrued interest or monthly fees is money you could've still had in your bank account.
- Charge all your purchases on your credit card. This may be second nature to some people. However, others may have a habit of using their debit card or cash for certain items. Break this habit and use your credit card instead to maximize your points earned. If you have more than one card, be sure to use the one that gives you the most points for certain purchases such as gas, groceries, dining out, etc.
- Don't do balance transfers to your new travel rewards credit card. And don't take out cash advances. First off, it's likely you'll pay a fee for both transactions. Second, you won't earn any points for these transactions. Third, they take up room on your credit card, making you have less available room to earn rewards.
If you plan to live in Thailand, would you like to know what the best debit card is or the most overseas-friendly credit card is? Want to know what how to apply for a travel rewards card if you're already living in Thailand? We answer these questions and more in our Thailand Expat Academy. Sign up to be notified when our membership site goes live.
A Few Words of Caution
Now that you know the details, we have a few words of warning. After all, we don't want you to spiral into debt while chasing after a free flight to Thailand.
First, this rewards credit card hacking method will only work for people who have very good to excellent credit scores. It's typically not available for people with poor credit scores.
Second, when you choose a travel rewards credit card, the minimum spending amount should be low enough that you can afford to pay the balance off in full each month. For example, if you choose a card with a 2,000 dollar spending minimum across 3 months, you need to be able to spend and pay off 2,000`dollars ÷ 3 = 667 dollars each month. If that is something you can't afford, look for a travel rewards credit card with a lower spending threshold.
Third, don't try to earn the spending bonus on more than one credit card at a time unless it's in your budget. If you can't handle spending across multiple credit cards, then you risk harming your credit and going into debt.
Lastly, the benefits of reward credit cards cannot be reaped at the last minute. This method works best if you apply for these cards long before you redeem the points for your trip. It usually takes several weeks to have your account credited your points, and if you use the entire three months to spend and pay off the balance of your card, you could be waiting for 4 or 5 months. Once your points have been issued, you can book your flights. However, just keep in mind that buying flights at the last minute usually costs more money/points than if you were to book them several months in advance.
What has your experience been with using travel rewards credit cards? Have you ever heard of this 'hack' before? Let us know in the comments below.
