In a previous article I introduced the concept of the points earning and burning game and briefly described how we arrived in a situation where something like it can exist. In this article I want to get into what the game is and talk about how my wife and I travel in business or first class multiple times a year without spending more than what we would have on an economy flight. This article serves as a high level introduction to points hacking, with each section containing links to more detailed posts/write-ups; and at the end I've included links to more details beginners guides as well.
Whether it's Disney or Africa, the objective of the points game is to save money and/or enjoy a level of travel that you wouldn't normally get to experience. I've redeemed a few points for simple domestic Delta flights from Atlanta to Pensacola and hundreds of thousands of points to eat caviar and fly in a double bed from Paris to Singapore. For me, I consider the whole thing to be a puzzle with thousands of pieces, and when you couple that with the fact that I am an aviation nerd, you can see why I am simply infatuated by the process and result of travel hacking.
For those who don't travel weekly and cannot organically accrue significant amounts of points, the act of gathering enough points to attain these products may seem out of reach. It's not. I'll explain more about why that is later in the Acquisition part of the article .
Step 1 - Planning
Contrary to what you might be thinking, those who really take travel hacking seriously do not start by hoarding as many points as possible. Instead, the first step they take is to plan out where they want to go so that they can then implement a points earning strategy that will reward them with the correct points that they need to get and stay there.
The easiest way to start is by simply figuring out where you want to go, find the airlines that fly and hotels that operate there, and then put together a plan to acquire the necessary points to achieve the level of luxury that you desire. In the past, this was very manual, but new tools are popping up left and right which make this almost idiot-proof. Reward Stock and Pointimize are two contenders that work out the most efficient ways to fly to and lodge at the destination of your choice and then tell you which cards for which to apply in order to accrue the necessary miles. These are very, very powerful engines which can take a lot of the guesswork out of the hobby. However, I do recommend checking their math, routes and recommendations before applying for any cards.
That said, your credit is your best friend, and it must be used wisely unless you want to run into a situation where you are denied an application for a myriad of reasons. I call this the strategic use of credit, and there are a couple major points that you must consider as your start your first churn.
For those who don't want something as powerful as the search engines I recommended above, you might want to check out AwardAce and AwardHacker as tools for finding great awards without having to dig into an award calendar. I use them every. single. time I am researching rewards - and that's pretty often.
a. Managing your credit is a fundamental skill in this world. If you cannot treat your credit card like a debit card and pay it off every month then do not continue reading this article. My goal is to help make sense of what is a very intimidating and complex process for those responsible people who can benefit from it, not enable those who cannot manage themselves or their spending.
b. Chase Ultimate Rewards is one of the most powerful currencies out there since these points transfer to a number of useful partners. Unfortunately for us, Chase has something called a 5/24 rule which means that Chase will definitely deny you for most new cards if you have opened five credit cards with any bank within the last 2 years. This is virtually the biggest limiting factor to current-day churns and the main reason why we always suggest that your first cards are Chase branded.
Example: If you have applied for 4 cards over the last 2 years and are now debating between an American Express and a Chase card, get the Chase card first since American Express doesn't implement the same rule.
Doctor of Credit does a phenomenal job of explaining this rule in greater detail.
WELCOME BONUS OFFER NOT AVAILABLE TO APPLICANTS WHO HAVE OR HAVE HAD THIS PRODUCT.
This means that if you have been approved for this product before you will be unable to receive the associated bonus. In other words, make sure the offer is worth it before you hit submit on that application link.
* Note that there are reports saying that targeted offers (ones you receive in the mail) may not come with that language. Your mileage may vary.
Miles to Memories has a more in depth overview of this caveat.
Step 2 - Acquisition
The next step, the execution of the plan, is one that requires patience and time. This is the part where you apply for those credit cards that you (or a service) have deemed lucrative and start watching the points accumulate. In most cases this will require hitting a minimum spend on the credit card(s) and this can be accomplished in a variety of simple or creative ways.
Day to Day Spend - if you are able to generate $2,000 - $5,000 of credit card purchases over 2 to 3 months, meeting the spend is easy. I do recommend the following though:
- Set any cards to be paid via "Auto Pay". As you accumulate cards it will be harder and harder to manage what is due when, hence why paying the balance automatically becomes the easiest way to stay on top of upcoming bills. This is especially crucial when dealing with charge cards that don't allow much time to pay.
- Track your credit cards in a spreadsheet. I have one that contains data such as sign up date, estimated cancel date, limit, brand, type (business or personal), country of origin (we are expats), bonus, etc. Here's one example at Johnny Africa.
- Track your points as well. Generic spreadsheets work for this, or alternatively you can use something like AwardWallet as a more advanced solution.
Manufactured Spend - this is absolutely for advanced churners only and can be referred to as legal money laundering. The goal here is to "create" artificial charges on the credit card in order to meet the minimum spend requirements AND continue generating significant amount of points off of the card. I'll go as far as to say that, while legal, this is can be very complicated, time consuming and risky. You should never float more than what you are willing to risk and you should fully understand what's involved before attempting it. For those wanting more information I highly recommend the Reddit /r/Churning thread on Manufactured Spending, just prepare to drink from a fire hose.
Step 3 - Implementation
What I consider the most fun part of all of this (besides the trip itself) has to be the process of booking the flights and hotels. While hotels are mostly trivial, booking the airfare, especially when it's a truly great redemption, is not always easy, but getting off the phone or clicking "Ok" with a confirmation number in hand is a great feeling.
In instances such as those I recommend tools such as ExpertFlyer, AwardNexus, and the Chrome extension called AwardFinder to find space. And then when it comes time either use the web site or pick up the phone to make it reality.
As usual, I have a few tips when finally getting down to business:
- Book as far out as possible, and plan even farther out. Trips can take years to materialize and they will require work. In the end it pays dividends though. Figure out when your target airlines release award space and pounce as soon as they do.
- Maximize the hold! Some airlines offer the ability to hold a ticket, some even when you don't have the miles in your account yet. Examples off the top of my head are Korean Air (doesn't require miles) and Singapore Airlines (does require miles).
- Have a backup strategy. Never go into the game with only one redemption in mind. Once I booked a flight to and from Europe hedging that last-minute space would open up. Surely enough, one month before my departure I got to swap business class on United for First class on Lufthansa. Then on the return I was able to swap Air Berlin Business for British Airways First! The key here being that the swapped flights were in the same Alliance. Either way I would have gotten a great trip for next to nothing (except for those HORRIBLE BA taxes), but since I was vigilant in my searches and alerts I was able to majorly upgrade the trip for very little extra cost.