Last updated: 02:30 PM ET, Tue August 18 2015

How To Travel Just About Anywhere in the Country for Less than $50

Features & Advice | Bryce Conway | August 18, 2015

How To Travel Just About Anywhere in the Country for Less than $50

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Should I spend money on traveling or save it for something else?

This is the question that almost everyone has to ask themselves at some point or another.

One on hand, traveling is one of the most valuable things that you can spend your money on. It teaches you about other places, cultures, and most importantly about yourself.

But on the other hand, spending all of your money on travel will set you back when it comes to retirement, saving to buy a home, and accomplishing other major financial goals.

So if I told you that you could do both without compromise, would you believe me?

Probably not.

But hopefully by the end of this article you’ll see that “both” is an option thanks to a very simple, yet very misunderstood hobby.

Introducing, travel hacking.

Travel hacking is the process of earning tons of frequent flyer miles through things like credit card sign-ups and other promotions and using those miles to book tons of really cheap travel.

It’s a lot like extreme couponing, only it’s much more lucrative, requires a tenth of the time commitment, and it doesn’t require you to clip coupons or keep a stockpile of canned food in your basement.

The idea behind travel hacking is difficult to understand at first but it really is not too complicated. In fact, the basic process can be described in to five simple steps.

1. Apply for a rewards credit card that gives you some sort of bonus for signing up (free flights, 40,000 points, hotel nights, etc.)

2. Do the required steps to earn the bonus (usually just a minimum spending amount)

3. Use the sign-up bonus points/miles to book cheap travel

4. Cancel the credit card 11 months later (just before the annual fee comes due)

5. Repeat as often as needed

It’s that simple.

The big-time travel hackers complete this process  15-20 times per year, which allows them to easily take multiple international trips annually for next to nothing.

Why does travel hacking work?

Travel hacking works because it allows you to beat the banks and credit card companies at their own game.

Banks and credit card companies make a large portion of their profits by taking advantage of people who struggle to manage their personal finances. The banks/credit card companies provide a product that allows people to spend beyond their means, use advertising to make said people believe that they can buy anything (check out their commercials to see what I mean), then profit by charging very high interest rates on the debt that their customers inevitably accrue.

This business model works incredibly well for them. So much so that the average indebted American household has $15,611 of credit card debt.

Typical credit card interest rates are currently around 15 percent, meaning that the profits generated from credit cards are enourmous.

Credit card companies know this, so they offer large sign-up bonuses of miles, cash back, etc. on their products to encourage signups.

These bonuses are bait to lure you in to the trap of credit card debt.

Travel hacking is simply a way to collect these bonuses while avoiding the trap of credit card debt.

Won’t this destroy your credit?

No, and anyone who tells you it will clearly does not understand the mechanics of credit scoring.

Here is a quick overview of how a large number of credit cards applications can affect your credit score.

Every time you apply for a credit card (or any form of credit) you receive a “hard inquiry” on your credit report, which causes your credit score to dip by 2-5 points according to FICO.

That 2-5 point dip only lasts for a few months and is easily offset by the positive effects of having another account on your credit report. The new account will give you an increased amount of available credit (this is very good for your score) and the increased number of on-time payments that you will be making each month.

I have personally seen my credit score rise more than 80 points since I have started with this hobby.

What’s the catch?

The catch is that travel hacking only works when you don’t fall in to the trap of credit card debt.

If you end up running up a massive amount of debt then you have done exactly what the banks/credit card companies wanted you to do.

So you need to take a second to be incredibly honest with yourself before starting the process. If you know that you can’t trust yourself with credit then you shouldn’t try this.

OK, enough of the theoretical junk. Let’s look at an actionable plan to help you fly almost anywhere in the USA for less than $40.

As I mentioned earlier, step one of travel hacking is to apply for a credit card to earn some sort of sign-up bonus.

There are a lot of card options out there so let’s start with one of the more simple ones. Barclays Arrival Plus.

The Barclays Arrival Plus gives you 40,000 miles after you spend $3,000 in the first 3 months. These particular miles (they’re all different between cards) redeem at a rate of 1 cent each to erase travel expenses made with the card in the last 120 days.

So you can buy a $400 airline ticket and erase that purchase with 40,000 points. Or a $123 hotel room and erase the purchase with 12,300 points. Simple.

You also get a 5 percent bonus on any points redeemed, meaning that the 40k sign-up bonus points are worth $420 in travel statement credits.

Perhaps the biggest advantage of this card is that you have the benefit of the sign-up bonus before you meet the $3,000 minimum spend. This is because the points work retroactively. You can buy your travel now and use your points to erase the purchase up to 120 days later.

The Barclays Arrival Plus waives the annual fee for the first year so you could cancel the card 11 months after opening it and end up paying nothing out of pocket. Meaning that if your desired flight costs less than $400 total it would literally be free with this strategy.

Again, a concept that defies traditional logic but is really quite simple.

Join us and start your journey to a better life filled with lots of cheap travel.

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