Below we provide 5 simple steps to start your transformation from a newbie to travel rewards guru. Travel hacking might seem to be easy, but in fact it has bunch of unobvious details and features to go beyond regular ways of travel maximization.

Step 1. Learn the basics

Travel hacking is all about saving money on travel. You can do that by obtaining “points” and “miles” offered by airlines and hotels loyalty programs and certain credit cards.

The concept of a travel hacking is quite simple. You earn points and miles the following ways:

  • You spend money using credit card which includes travel reward program. Each dollar spent will bring you certain amount of points or miles. Some banks issue co-branded credit cards which grant you additional points or miles you can redeem on the flights operated by a particular airline.
  • You participate in an loyalty programs with airlines, hotels, etc. Each flight or hotel stay will bring you some amount of points or (in case of airline program) miles. Amount of points or miles earned usually depends on a length of your flight or how much money you spend with particular airline or hotel.

When you have obtained certain amount of points or miles, you can redeem them on free airfare. You can do that in one of three ways:

  • If your card participates in travel rewards program, you can use points to buy airfare through bank’s travel portal. Usually, 1 point = 1 cent if redeem through travel portal.
  • You can transfer credit card points to card’s partner airline. Then you can exchange points for an airfare. Sometimes this way of points redemption is more profitable than redemption through bank‘s travel portal.
  • You can redeem points and miles earned by flying with a particular airline for a free airfare directly with the airline.

Step 2. Set up your goals

Before you start to participate in any travel rewards program, decide on your goals. How do you want to utilize your travel points? Are you interested in domestic flights, or you are willing to travel internationally? Do you want to fly often with budget airlines, or you strive for a first class experience? Your goal have an impact on a strategy of travel hacking, namely choice of loyalty program, number of points, where to get them, how to redeem them, etc.

Travel hacking is a long-term game and takes some time and patience. Setting up the right goal is crucial to develop effective strategy of points and miles acquisition and redemption. The right goal will help you to stay focused and develop necessary consumer habits leading to maximization of your points.

Step 3. Sign up for airline and hotel loyalty program

This step goes together with the previous one. Loyalty programs grant you points or miles when you choose to fly particular airline or stay at a particular hotel chain. You can check our full list of airline loyalty programs reviews.

Your preferences towards a particular loyalty program depends on your travel goals. By signing up for the right loyalty program you can faster reach your travel goal. Moreover, you can sign up for most loyalty programs at absolutely no cost.

Let’s dive into a representative example. If you are a frequent business traveller within US who often stays at Mariott hotels during business trips, you might want to sign up for Southwest Airlines Rapid Rewards and to combine it with Mariott Rewards loyalty program. Why so?

Southwest Airlines operates mostly domestic routes and is very convenient for travel within US. Mariott Rewards loyalty program will grant you 600 travel points for each stay eligible to redeem for Southwest Airlines flights, and 10 Mariott points per $1 spent on room rates and qualifying charges at Mariott. Plus, you can redeem any amount of your Mariott points for Southwest Rapid Rewards points.

Step 4. Get the right credit card

Credit cards with juicy travel rewards program is a must to achieve your travel maximization goal fast. The more powerful the rewarding capability of your card is, the quicker you’ll reach your goal.

Сredit cards that include travel rewards program are very different. Some banks issue credit cards that are co-branded with airlines and hotel chains. Features of credit cards that provide travel rewards vary dramatically: they have different signup bonuses, require different credit score to be approved, etc. Thus, don’t rush, but choose your card wisely. Here we picked a few of best travel rewards credit cards that are quite friendly to travel reward newbies.

When you choose your travel rewards credit card, pay special attention to the following features:

  • Signup bonus. Banks attract new customers by issuing credit cards with a certain amount of points eligible to be redeemed for the airfare on a particular airline or for hotel stays at a particular hotel chain. Amount of points coming with differents cards vary: for example, with Chase Sapphire Preferred® credit card you will get 50,000 points after you spend $4,000 within 3 months, while Citi ThankYou® Premier Card will grant you only 30,000 points after you spend $3,000 within 3 months.
  • Earning rate. Earning rate is the number of points you get for making purchases at a particular merchant. As usual, earning rates vary: some cards will give you 3 points on each $1 spent on any travel, some – only 2 points on purchases within certain travel programs, etc.
  • Redemption rate. Redemption rate represents a transfer ratio of travel points for airline points. In short, it shows how many travel points you need to get a free ticket.
  • Annual fee. It’s simple: the lower – the better.
  • Foreign transaction fee. It is important since probably you will travel abroad. Many credit cards don’t charge you a foreign transaction fee. Anyways, usually it doesn’t exceed 3%.

Let’s come back to the example we provided in Step 3. A business traveller who often flights with Southwest Airlines and stays at Mariott might like to apply for one of the Chase Visa Southwest Rapid Rewards® credit cards. These cards will grant you 50,000 Southwest Rapid points after you spent $2,000 on purchases within first 3 months, 2 points per $1 spent with Southwest Airlines and at partner companies, and 1 point per $1 spent on other purchases.

Step 5. Maximize your purchases

To maximize travel rewards we recommend charging all your purchases to a credit card linked to your travel reward program. And, of course, pay off your balance each month in full.

To earn additional travel points, you may sign up for dining programs or shopping through online hotels’ or airlines’ portals. Dining programs, which are provided by many airlines and hotels, grant you additional reward points when you dine out at particular places.

At the same time, hotels’ and airlines’ online portals will provide you the opportunity to earn travel points for shopping. These portals are called “mileage malls”. While shopping particularly at a mileage mall, you will get reward points in addition to the points you get for using a credit card. Double profit!

Dining programs and mileage malls are lucrative, but difficult ways of travel maximizations. To learn how to navigate around them and use them effectively, check our guide on dining programs and mileage malls.