[Editor’s Note: This is a guest post by Millionaire Mob, an early retirement blog focused on investing advice and travel hacking. Katie and I love to travel but we’re not that great at travel hacking. Katie does a better job finding deals than I do, but if you’re like us, there’s probably something you can learn from this post about traveling more cheaply. We have no financial relationship with Millionaire Mob.]

Travel hacking is such a broad subject that it is hard to determine what it truly means. I’ve come to help break it down in the simplest form and help you use the right tools to travel around the world for little to no cost.

Why Should I Care About Travel Hacking?

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Travel hacking has lucrative benefits and is best suited for higher income, strong credit consumers. Consumers with an outstanding financial status can obtain lucrative credit card and travel benefits.

Travel hacking is virtually a no-brainer due to the following benefits:

  1. Save money on required family/friends travel…. Imagine never having to pay for another out of state wedding trip.
  2. Work travel? Imagine having all lounge access, upgrades and so much more. Make becoming a road warrior a ‘road hero.’
  3. Vacation funds? Who needs to save money for vacations when all you have to pay for is food when you travel?

Travel hacking has obvious benefits. What are the downside considerations? Time and learning. That’s virtually about it.

With travel hacking, your credit score is only slightly impacted. I’ve been participating in travel hacking for over a year and my credit score is still 800+.

What is Included in Travel Hacking?

In my opinion travel hacking includes the following buckets:

  1. Churning credit cards;
  2. Manufactured spending;
  3. Booking award travel efficiently; and
  4. Travel hacking without a credit card.

I’d love to break down these buckets in greater detail to help you plan your first travel hacking experience.

1) Churning Credit Cards

What is churning credit cards? Credit card churning is the act of repeatedly opening credit cards solely for the welcome bonus. The welcome bonus is usually the crux of receiving a large lump sum of airline miles or rewards points. I used credit card churning to take a trip to France, Japan, California, Arizona and Chicago all in the span of 6 months… And completely free.

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For example, I recently opened the Chase Ink Preferred Card for the 100,000 Ultimate Rewards points after hitting the minimum spend. This is worth nearly $1,250 of travel rewards. I think I could find a destination for that.

With that kind of welcome bonus, I want to accelerate my minimum spending requirement (i.e., spend $5,000 in the first three months) as soon as possible. How do I do that? Manufactured spending.

2) Manufactured Spending

Manufactured spending is a loophole for generating more points using ‘artificial spending’ to turn credit card spending into cash. This cash, in turn, is used to pay off your credit card leading to $0 in net spend. You do manufactured spending for two primary reasons:

  1. Meet the minimum spending requirements to meet the signup bonus without buying extra items.
  2. Generate significant rewards points without actually buying anything.

How do you do manufactured spending? There are plenty of ways to do it and it is ever-changing, so stay nimble. Our guide to manufactured spending can help dramatically. However, there are some commonly known ways to participate in manufactured spending:

  1. Purchase virtual gift cards and convert them into money orders
  2. Fund bank accounts with credit cards

Using your rewards card for all of your purchases and bills is another way to increase your spending on the card. With services like Plastiq, you can even pay your mortgage, rent and other major expenses with a credit card. The payment times lag, so you need to plan accordingly.

3) Booking Award Travel Efficiently

An underrated component of travel hacking is booking your award travel efficiently. Travel hacking is solely a numbers game. Once you have amassed a large fortune of awards points, you need to deploy them in an efficient manner similar to how you would with spending or investing.

Some important definitions to consider include the following:

1) Cents per point

travel hacking millionaire mobTo calculate you take the cost of the flight or hotel stay divided by the points redemption. For example, if you could pay $2,000 for a flight or redeem for 60,000 miles, your cents per point would equate to 3.33x. That is a very good redemption. I like to target anything above 1.5x. These are great ways to book award travel.

2) Transferability

The crown jewel rewards programs are typically the programs that offer the most flexibility with the rewards points. Rewards programs such as Chase Ultimate Rewards or American Express Membership Rewards offer maximum transferability. These programs have partnerships with virtually every airline imaginable, so you can transfer your point dollar for dollar to other airline programs for maximum redemption value. Additionally, they even offer flexible options to redeem for gift cards at your favorite stores. I would advise against this, however, since the redemption value is lower than travel.

Organization is key here. Track all of your rewards programs in a simple document.

Travel Hacking Without a Credit Card

There is always a consideration to be made with travel hacking beyond credit cards. Far too many people believe that travel hacking only means opening a significant amount of credit cards. There is so much more that you can do other than solely just credit card reward bonuses.

Things that help with travel hacking without credit cards include:

1) Be cognizant of where you stay relative to the location.

Staying in an American branded hotel in a foreign country (even it if it considered a 3-star hotel in America) may be viewed as a luxury hotel in a different country. When I stayed in Japan, there were so many amazing boutique hotels that had an awesome design, comfort, and excellent service. These hotels were nearly half the price as staying at a Courtyard by Marriott or comparable budget American hotel chains. The same goes for Europe. I found myself finding way better values in hotels that weren’t international chains but were viewed as budget in the US.

2) Find those hidden deals!

Oftentimes, traveling via train/bus in foreign countries have opportunities for amazing deals. You just need to find them. I remember I found a way to input a 50% discount to our France rail passes! This saved us over $400 just on 3 train trips.  Hidden deals are hidden for a reason, so you must do your own research in certain cities. Another example of a somewhat hidden deal was my trip to Tokyo. I bought the Japan rail pass and that includes many local trains within the city of Tokyo. My Google Maps always told me to take the subway (which cost additional) versus taking the local trains. I got there in the same amount of time without additional cost because the Japan rail pass included it!

3) Make sure you are earning rewards for anything that you do while traveling (especially work travel).

I’m a bit of a rewards addict when traveling for my career. I need to have my points! You should too, however. Any time you stay somewhere just ensure that you are signed up for that specific airline, hotel or car rental establishment.

4) Oh, keep an eye out for bonuses too.

Oftentimes these rewards programs offer bonuses like a free night for staying 2 nights over the course of a few months. Try creating a dummy email account where you can scrap the benefits for these various bonus options. They are only one click away. I like using a separate email since I don’t want to receive a bunch of promotional emails. However, if you can get on all these email lists, you will likely get targeted for special promotions. I ended up receiving a Marriott promotion that included one free night, to be used whenever I wished, if I stayed 3 non-consecutive nights at one of their properties. I had a wedding in Chicago that I needed to stay overnight and used this free night! Bingo!

Travel Like a Pro

In order to travel hack without a credit card, you need to travel and act like a pro. Are you going to be staying in a big city that you will spend most of your time outside exploring all of the landmarks? Well, why should you spend all your money on a luxurious hotel?

Opening a number of different travel rewards programs takes some time and monitoring. It’s not easy. However, there are limited downside risks to travel hacking. It just takes some time and organization.

I don’t know about you, but generating free money and rewards is highly attractive to me.

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Feel overwhelmed? If you don’t want to participate in a full-fledged travel hacking expedition, try opening one of the key credit cards offered by the big banks. I prefer several luxury cards that offer me free lounge access, upgrades and travel credits. These end up being great adders to my already busy work/travel schedule.

You will love the benefits of traveling like a pro. Relaxing in a lounge after being on the road for consecutive days goes a long way to making life easier for you. You get to save a few bucks, too!

Are you travel hacking? What are your favorite cards to use for cashing in on travel? What are your favorite ways to find the best deals on hotels and travel? Comment below!