Travel Hacking 101: Which Card Should I Get First?

While it’s important to meet your savings goals and make a plan for paying off your student loans, it’s just as important to treat yourself for all the hard work you put in day in and day out.

And if one of your long-term goals is to travel more, there’s no better time to do so than when you’re young. Except there’s just one thing: travel is a big-ticket item that may not fit into your small-balance budget.

Enter travel hacking, aka maximizing the benefits of travel credit cards to score discounted flights and hotel stays. It can feel intimidating to get into the “travel hacking” game, but we’re here to explain how it’s done.

For the absolute beginner to travel hacking, here are five steps to lay the framework.

Step 1: Use Your Credit Card Responsibly

The foundation of travel hacking boils down to responsibly using your credit card. That means paying off your entire bill before the end of your statement period. If you find yourself missing payments and accruing late fees and interest charges, it’s essential to change up your credit habits before you move on from this first step.

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Unfortunately, travel credit cards are pretty unforgiving and come with high APRs — so you really don’t want to miss any payments. Not to mention, the value of any points or miles that you earn from a travel credit card will essentially be negated by charges that you rack up from the credit card company.

Finally, you’ll need to have a good to excellent credit score to qualify for a travel credit card, so getting your credit in shape is the most critical step to delve into the world of travel hacking. For those without any credit cards in their wallet, apply for one of our best beginner credit cards and practice using a credit card responsibly for at least one year.

The first step may seem like the biggest barrier to entry, but slow and steady wins the race. Once you feel confident that you can manage multiple credit cards, the next few steps will feel like a breeze.

Read more: Helpful Tips for Maintaining a Good Credit Score

Step 2: Outline Your Dream Trip

Here comes the fun part: thinking about your first trip using credit card rewards!

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You’ll want to plan for the long-term — at least 6 to 12 months out. Who do you want to go with? Where do you want to go? For how long? Write down the rough details of your trip so that you can stay focused and work towards accomplishing these goals. This will also help inform which travel credit cards to apply for in step three.

For example, my friend wanted to treat her mom to a week-long trip to Spain, complete with business class seats. By applying and spending on the right travel credit card, she made this trip happen with points just eight months later.

Step 3: Apply for a Travel Credit Card

There are so many travel credit cards on the market, and you may feel overwhelmed at the sheer number of options available. It’s important to know that the best travel credit cards are ones that aren’t tied to any airline or hotel loyalty program.

Rather, you’ll want to apply for a credit card that’s issued by a bank. Our personal favorites include:

• Chase Ultimate Rewards®.
• American Express Membership Rewards®.
• Citi ThankYou® Rewards.

Trust us — you can’t go wrong with the four cards we’ve listed below. No matter which one you end up with, you’ll want to spend on the card for 6 to 12 months and earn the sign-up bonus. Then watch the points fly in.

The Chase Freedom Unlimited® is a popular cash back card, but it still earns points through the Chase Ultimate Rewards® program. You can use these points toward travel and there’s no annual fee, making it a great option for those on a more limited budget.

Cardholders earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% back on dining and drugstore purchases, and 1.5% back on all other eligible purchases.

That may not seem like much, but these bonus points add up quickly over time. When it comes time to use up your points, you can redeem for flights, hotels, rental cars, and more for 1 cent each through the Ultimate Rewards® portal.

Tip: Earning 1.5% cash back is interchangeable with earning 1.5x points on all purchases. This can help ease the confusion when calculating your bonus rewards. For example:

• A $500 flight purchased through Chase (5% back) will get you 2,500 Ultimate Rewards® points.
• A $100 restaurant purchase (3% back) will get you 300 Ultimate Rewards® points.
• A $50 Amazon purchase (1.5% back) gets you 75 Ultimate Rewards® points.

Pros

• No annual fee.
• Earn at least 1.5% cash back on all purchases.
• 0% Intro APR on Purchases for 15 months and 0% Intro APR on Balance Transfers for 15 months (followed by an APR of 19.74% - 28.49% Variable)

Cons

• Charges a foreign transaction fee of 3% of each transaction in U.S. dollars, so avoid using when traveling abroad.
• Points are only worth 1 cent each toward travel.

Apply now or read our full Chase Freedom Unlimited® Review.

The Chase Sapphire Preferred® Card is one of the most beloved travel cards on the market. There’s a $95 annual fee, but you’ll quickly realize that it’s worth the price tag given how many travel benefits come with the card.

Similar to the Chase Freedom Unlimited® mentioned above, the Chase Sapphire Preferred® Card earns rewards through the Ultimate Rewards® program. However, your points are more valuable and are worth at least 1.25 cents each.

For travel bookings made through the Ultimate Rewards® portal, your points are worth 25% more (1.25 cents each), stretching the value of your rewards even further.

However, the real “secret” to the card is that cardholders have access to Chase’s 15+ airline and hotel transfer partners. This is where travel hacking 101 kicks in: you can transfer your Ultimate Rewards® points at a 1:1 ratio to popular loyalty programs like World of Hyatt, Southwest Rapid Rewards®, and United MileagePlus.

Research the sweet spots of the Chase Ultimate Rewards® program, and you can score lie-flat business class seats to Europe for just 34,000 points, all-inclusive Hyatt resort stays for just 12,000 points per night, and more. This is where you can find 2 cents of value per point — or potentially even greater — by maximizing your rewards.

Read more: How Travel Hackers Use Chase Ultimate Rewards®

Tip: Travel hackers love to use a two-card strategy and carry both the Chase Freedom Unlimited® and the Chase Sapphire Preferred®. Pay for travel (up to 5x points) and dining purchases (3x points) with the Chase Sapphire Preferred®, and pay for all other life expenses (1.5x points) with the Chase Freedom Unlimited®. Then, combine your points together to accumulate a mountain of Chase Ultimate Rewards® points!

Pros

• Transfer your Chase points to 15+ airline and hotel loyalty programs.
• Annual $50 hotel statement credit for reservations booked through the Ultimate Rewards® portal.
• No foreign transaction fees.
• Trip cancellation and interruption insurance, baggage delay insurance, primary rental car insurance, and more.

Cons

• $95 annual fee.
• No introductory APR period.

Apply now or read our full Chase Sapphire Preferred® Card Review.

Citi Premier® Card

The Citi Premier® Card earns travel rewards points through the Citi ThankYou® program, and at a favorable 3x point earning rate on a diverse number of bonus categories. Plus, the Citi Premier® Card comes with a limited-time increased offer for new applicants, at 60,000 bonus points after $4,000 in spend in the first three months of account opening.

You’ll want to save up your points to transfer them to Citi’s 15+ airline and hotel partners, including Air France/KLM Flying Blue, Avianca LifeMiles, Turkish Airlines Miles&Smiles, and Virgin Atlantic Flying Club.

For example, you can score a 7,500 one-way flight to Hawaii with Turkish miles or a one-way business class flight to Europe for 50,000 Virgin Atlantic miles.

Tip: Most of Citi’s transfer partners are international airlines, but don’t fret. Leveraging these airline loyalty programs is actually the best way to score immense value from your credit card rewards.

Pros

• Elevated welcome offer of 60,000 bonus points.
• Strong rewards rate on everyday purchases and travel.
• No foreign transaction fees.
• Points transfer to Citi’s 15+ airline and hotel transfer partners.
• Annual $100 hotel statement credit for bookings of $500 or more through thankyou.com.

Cons

• $95 annual fee.
• Lacks travel insurance benefits that come with competing rewards cards.

Read our full Citi Premier® Card Review.

American Express® Gold Card

• Credit score required: Good to Excellent
• Annual fee: $250
• Interest rate:See Pay Over Time APR
• Welcome bonus: Earn 60,000 bonus points after you spend $4,000 or more in the first three months of account opening.
• What we like:
  • Up to $120 in annual Uber Cash credits.
  • Up to $120 in annual dining credits for participating restaurants.
  • Earn 4x points on U.S. supermarkets (up to the first $25,000 spent annually, then 1x), 4x points on restaurants worldwide, 3x points on flights booked directly with airlines or through Amex Travel, and 1x point on all other eligible purchases.

Last but not least, the Amex Gold Card is a terrific card that’s rewarding for both travel and everyday purchases. It earns a whopping 4x points on restaurants worldwide and U.S. supermarkets (up to $25,000 spent annually), making the Amex Gold an ideal card for foodies.

The card also participates in the American Express Membership Rewards® program, where you can transfer your points to the issuer’s airline and hotel transfer partners like Air Canada Aeroplan, Delta SkyMiles, Marriott Bonvoy, and more. Travel hackers love the Amex Gold since the points add up so quickly and transfer to a myriad of useful partners to squeeze 2 cents (or more) of value per Membership Rewards® point.

Tip: American Express offers countless ways to redeem your points on its portal, such as gift cards, Amazon purchases, and more. However, resist the urge to spend your points for anything other than transferring to travel partners — this is the only redemption opportunity to score an expensive business class flight for a fraction of the cost in points.

Pros

• Access to Amex’s 20+ airline and hotel transfer partners.
• Excellent rewards rate for foodies.
• No foreign transaction fees.

Cons

• Steep annual fee.
• High purchase APR.

Read more: Amex Gold vs. Chase Sapphire Preferred® Card

Best Travel Hacking Credit Cards: Overview

Step 4: Redeem Your Rewards

After 6 to 12 months of card spend, you will have accrued thousands of points in your account. Now, it’s time to redeem your rewards and make that trip happen!

It would take too long to list out the sweet spots of every credit card transfer program, but fortunately there are tons of resources online to help you score your dream flight or hotel stay. Below, we’ve listed some of the best transfer partners from the three programs we discussed (Chase Ultimate Rewards®, Citi ThankYou® Points, and American Express Membership Rewards®).

Chase Ultimate Rewards®:

• Air Canada Aeroplan.
• British Airways Executive Club.
• Iberia Plus.
• Singapore Airlines KrisFlyer.
• United MileagePlus.
• Virgin Atlantic Flying Club.
• World of Hyatt.

Citi ThankYou® Rewards:

• Avianca LifeMiles.
• Turkish Airlines Miles&Smiles.
• Singapore Airlines KrisFlyer.
• Wyndham Rewards.
• Virgin Atlantic Flying Club.

American Express Membership Rewards®:

• Air Canada Aeroplan.
• ANA Mileage Club.
• British Airways Executive Club.
• Iberia Plus.
• Qantas Frequent Flyer.
• Singapore Airlines KrisFlyer.
• Virgin Atlantic Flying Club.

Step 5: Think About Your Next Move

Making your first points redemption is a huge deal, and you’ll quickly realize it’s not so difficult after all. Not to mention, it’s incredibly satisfying to know that you paid for an entire flight or hotel stay using points and miles.

Travel hacking is an ongoing hobby, and you’ll want to think about your next move. Do you want to keep putting your everyday spend on one (or two) cards? Do you want to add new cards to your wallet to earn a big welcome bonus or other unique travel benefits?

Read more: How Many Credit Cards Should You Carry?

But if you’ve reached this final step, congratulations! You’ve mastered travel hacking 101 and can unlock a world of travel possibilities.

Summary

A question I’m often asked is, “How do you travel so often?” The photos of lie-flat seats with champagne in the sky and oceanfront resorts only tell a fraction of the story. Travel hacking has enabled these aspirational trips to places far and wide — and you can do the same, too.

Featured image: Africa Studio/Shutterstock.com

Read more:

• Best Travel Rewards Credit Cards
• 6 Signs it’s Time to Apply for a New Credit Card