All veteran travellers have hacks that they use. Hacks are tricks for beating the system. Yes, they are sneaky. Yes, they are work. But man are they effective. Today, we will look at the use of credit card bonuses. Let me preface this by saying that the examples I give are Canadian and Canadian bonuses are pitifully stingy compared to American ones. It just means that Canucks have to be sneakier and work harder.
I have excellent credit. I also have naturally curly hair. Not to brag or anything but this allows me to take full advantage of credit card hacks (the credit not the hair). Following staff-member embezzlement while I had cancer, Fahbio’s business failed and he found himself with a horrible credit rating and piles of debt. We’re on a five year plan to extract ourselves from this mess and as a result of our draconian budgeting measures, we’re making serious headway and also socking aside a bit every month for our round the world trip. Our financial situation means that we have to take full advantage of the travel hacks at our disposal.
I currently have a significant number of “Airmiles”. I am referring to the miles associated with the blue cards that you show at participating stores. These Airmiles are good for:
- Stuff, like the $800 camera I was able to get for free
- Gift certificates, like for cinemas and Via Rail (our version of Amtrak)
- Experiences, like our free family trip up the CN Tower (value > $100)
Blue Airmiles are weak on flight redemption for numerous reasons so booking a “free” flight with these miles won’t give you much bang for your buck. In my opinion, you’re better off buying a ticket during a seat sale or even just shopping around for a good fare and using your miles for other things. Blue Airmiles are also North American-centric making it difficult to use them on a world trip.
But blue Airmiles cards are free and aren’t linked to credit in any way. It is a no brainer to apply for a card and to use it when making purchases.
Fahbio has Air Canada Aeroplan miles – enough for one round trip ticket to Europe. Aeroplan is part of the Star Alliance allowing miles to be used for flights on partner airlines like Lufthansa and Singapore Airlines. I have 0 Aeroplan miles. Because our current plan is to fly from Canada – Japan on a one-way ticket, I now feel a burning desire to get some Aeroplan miles. I do not want to earn them because that would take forever. I just want them for free.
I recently applied for a Toronto Dominion (TD) Aeroplan Visa Infinite card, was accepted, and received the card in the mail. It was a painless 5 minute application process. TD is currently waiving the $120 Cdn annual fee with no charge if you cancel anytime within the first 12 months. You earn a welcome bonus of 15 000 Aeroplan Miles when you make your first purchase. I bought $48 worth of gas this morning and am 15K miles up.
I also applied for an American Express Gold Rewards card, was accepted and should receive my card in a few days. An AMEX card can be harder to get, depending on income and credit rating, and is accepted in less places than Visa or Mastercard. The card I selected offers a welcome bonus of 25 000 reward points when you spend $500 within the first 3 months. The points can be converted 1:1 for Aeroplan miles at no cost. More enticingly, they can also be converted to any number of other airline rewards programs. I can choose to convert some to Aeroplan and some to my KLM frequent flyer account. I applied because AMEX is currently waiving the $150 Cdn annual fee. Same deal as TD – cancel within the first 12 months and there’s no charge. This AMEX card also offers double miles earned at gas stations, pharmacies and grocery stores. Since I had to buy a new hot water heater :-( I’ll put it on my card as soon as I receive it. Bam, I’ll be up 25K miles.
I should note that there is an even better offer on the table – 40 000 reward miles on an AMEX Business Gold card with no annual fee for 12 months. The catch is that you have to spend $5000 within the first 3 months and I didn’t want the pressure of having to spend that.
It costs 37 500 Aeroplan miles to get from Ontario to Japan. By making 2 simple purchases on 2 separate cards within 3 days of each other, I will have a free one-way ticket on Air Canada to Japan. Yes, it’s that simple.
A few points to consider:
- DO NOT DO THIS if you will either be tempted to buy things you don’t absolutely need or if you will, for whatever reason, not pay your bill off in full every month. It sounds anal but when I make a purchase, I go online and make the payment THAT DAY. If you will be making even a few purchases you don’t really need or spending a few $ in interest charges, this hack is not worth it.
- The Man will be psychoanalyzing your sudden need for multiple credit cards. Tread carefully if you do not want your credit rating trashed. You should not apply for a bazillion credit cards, use them once and then apply for more. This travel hack works best if you plan at least 18 months out for your trip and proceed slowly.
- If you are too young to apply for a credit card, you can still get a blue Airmiles card as long as you are at least 16 years old.
- If you are young or if your credit is terrible, work towards building your credit score. Try applying for a student credit card or a no-fee card with a low limit. Even if these cards don’t offer perks, they will still get you on track for getting those down the line. DO NOT DO THIS if you there is any risk of you making bad choices with the card.
- Make effort to avoid diluting your rewards by using too many cards. You can only spend so much money and if you have 16 cards on the go, each earning 3K rewards miles, you won’t be going anywhere.
- The biggest payoff, miles-wise, is in the sign-up bonus. That is one reason why we won’t be applying for secondary cards for spouse/adult child. Our goal is to get everyone’s credit where it should be so that each person is getting their own card with their own free flight. Go for the cards with the biggest reward and the lowest fee.
Take a few minutes over the next week to see what the various banks and credit companies are offering. I picked the two cards mentioned because I had a specific goal in mind that involved Aeroplan. There are likely other cards that would work better for you. Blogs and websites exist that explain in mind-numbing detail the ins and outs of various cards. Many of them use hyperbole to rope you into subscribing to the site or purchasing an ebook on how to travel hack. I recommend the following two sites to get you started as they are well written and have no strings attached:
Travel Is Free (warning: this guy is a hacker geek so don’t feel bad if you only understand 5% of what he’s talking about)
One final but important note. I love to shop locally and most mom and pop businesses will accept credit cards because people expect them too. Small businesses pay dearly for the “privilege” – between 1 1/2% and 5% on each purchase you make. AMEX charges the most, that is why they are the least accepted. Please make every effort to pay by cash or debit card when you frequent local businesses.