Hello folks! Hope all is well. And I hope today’s title doesn’t catch you off-guard. Credit card award and frequent flyer award travel has always made me cringe when I hear it. Award travel is a complicated world and it appears it only keeps getting more complicated. I hate booking with awards as it always feels like I could be getting a better deal out there (not much different than booking airfare regularly…), but I do love taking advantage of free awards and credit card bonus award offers. Hard to go wrong booking with bonus miles! Today we will be talking about how award travel is changing and how I managed to save approximately $3,774 with my travel hacking in 2016 alone.
Your Money Matters
I enjoy listening to the Your Money Matters podcast from The Wall Street Journal and one jumped out at me recently. It discussed New Ways to Fly with Miles. I’m always looking for new deals out there. If there is an easier or cheaper way of getting something I already buy, then I’m all over it.
Also, I’ve been looking for a good time to do a post on my travel hacking experience…so perfect timing!
In the podcast, it is discussed how using awards has gotten more complicated as award seat inventory has been limited and award travel isn’t “free” as fees and fuel surcharges are levied and continue to go up. Lastly, while airline partnerships have expanded, thereby allowing miles to be used elsewhere, not all partnerships can be booked online with award travel!
The podcast mentioned American Airlines in particular who has 26 partnerships around the world, however only half are bookable on their website. The airlines have been supposedly struggling to get award travel inventory meshed across its platform and available online…how convenient!
The end result…well if you are anything like me it results in hours of searching for the best use of my miles and awards. It means tracking airfare prices over months to find the best time to buy, and searching for the best destination airport, layover location, and airline to use. No wonder a world of professional bookers has popped up…
Yes, you heard me right. Booking travel awards has gotten so complicated that it has sprung a new industry of professional bookers! One that was mentioned specifically on the podcast was Book Your Award. This was the first I had heard of professional bookers. Has anyone ever used them before? Please share in the comments what you thought!
How about another easy and great solution put out there by a fellow blogger, the Frugal Vagabond. Just earlier this week he wrote a post on Braindead Easy Travel Hacking where he discussed a new feature on his The Earth Awaits platform for Award Travel Search. This tool combines the following features with more to come:
- Knowledge of 18 different airline award charts
- Which points transfer to which airlines and at what ratios
- 61,000 airline routes
- Up-to-date credit card offers with the highest signup bonuses
Impressive work, Vagabond! Thanks for the great tool!
My Tips for Using Award Travel
Booking airfare is no fun. I’d probably rather go to the dentist. Seriously. And booking award travel is no different. As the podcast has mentioned, it is becoming increasingly painful. So below I outline my philosophy toward award travel (don’t take this as advice, you need to make up your own mind and find what’s best for you):
- Maximize free offers. I have always gladly accepted reward perks through frequent flyer programs and credit card rewards, but in 2015 and 2016 I’ve become increasingly focused on credit card travel hacking. There are credit score considerations to make regarding this, but I haven’t found my score to be negatively impacted much. And I’ve gladly accepted and utilized offers for “40,000 bonus miles when I spend $3,000 in the first 3 months”…That way if I end up getting hosed on the utilization of these awards, at least they were generally handed to me for free. And the opportunity cost of simply sticking with one 2% cash back card is easily outdone.
- Use awards as soon as I can. Awards will only get less valuable over time as award programs are modified and de-valued or points expire. And also, awards sitting idle in your account are like having cash sit in your checking account earning you 0%. I’m not saying book travel you otherwise wouldn’t, I’m simply saying using them sooner rather than later is better.
- Consider first or business class tickets. This is where you can get more bang for your award buck. There have even been a few occasions in 2016 where my wife and I flew first class for fewer miles than what it would have been to book in economy class! Shocking, I know, but true! Those occasions were first and only times we ever flew first class and I’m sure everyone else up there loved the peace and quiet our two year old brought with him! J
Travel Hacking is Simple
In the last couple years, my wife and I have signed up for countless cards. Literally, countless cards…there’s the Southwest card, American Airlines card, Barclaycard, Capital One Venture card, Chase Sapphire Preferred and Reserve cards, Citi American Airline card… I could be missing one or two that have come and gone. Needless to say, it takes a good system to stay on track of all these cards.
- Right away we put the card on auto payment for the full balance so we don’t ever get stuck with late fees or interest charges.
- We put a calendar alert to cancel the card before the annual fee kicks in. Often times the first year fee is waived. So in 12 months we call up the card company, tell them we are going to cancel to avoid the fee and sometimes they will actually waive the fee for another year to entice us to keep the card open. And this is preferable to us so our “credit account” is out longer and there is less of a negative impact on our scores. If they don’t offer to waive the fee for year two then we will cancel…better to get rid of the card then pay any fee.
- Also, if you forget to cancel the card and the annual fee kicks in, we’ve had luck calling the company and subsequently getting them to waive and credit it back to us.
- Another option to cancelling is simply downgrading the card to a no fee card and not risk your credit score the slight, short term negative impact from closing it.
- We’ve never had trouble reaching the spend limit. And usually we meet it within just a month or two…not because we are huge spenders…it’s because of daycare. Yes, daycare is the key for us, they accept credit cards at no extra fee. We know our monthly spend, put everything we can on the card, and pay it off in full to ensure we reach all spending targets.
- And once we hit the spending limit required for the bonus travel, we cycle to the next card.
Credit card travel hacking isn’t for everyone and credit score implications are important. While my score has been dinged for the number of “new accounts” (accounts opened within the last two years), it has also benefited from “available credit” (the more credit cards opened with less utilization demonstrates handling available credit appropriately) as well as no late payments.
After somewhat intense travel hacking for about two years my credit score has dropped modestly, but remains “excellent” in the upper 700s.
My Award Travel
As I mentioned above, in 2016 alone my wife and I utilized $3,774 worth of free award travel. On top of that, we are each sitting on over 150,000 of award miles ready for the next trip. Perhaps we slow down the travel hacking a bit…
Our total vacation spend in 2016 was $8,410, net of the reward benefits it was only $4,637 out of pocket. Our vacation spend won’t always be so high. Last year was a big travel year as two of my brothers got married. And our little one was over two years old for both of those flights back home to the Midwest meaning we had to buy his plane ticket too! And on top of that, I had a couple bachelor parties I was drug along to…
Questions for you:
- Have you had any major travel hacking successes or failures?
- What are your tips for using award travel?
- Have you ever tried a professional booking service?
Thanks for taking a look!
The Green Swan