PART I: Con-Ed: How to Travel for Free/Almost for Free (Even When Your Employer Won’t Pay for It) "Travel Hacking for Physical Therapists”
By Andrew Banh, PT, DPT, OCS
July 2017
Andrew Banh PT, DPT, OCS traveling in Kauai using his Chase Sapphire points.
editors note: This changed my life! I have been "travel hacking" for a year now and it has been an amazing intro to not only traveling for free but it introduced me into the financial independence community. Andrew Banh is a go to person for this topic. I hope you use this amazing information to travel for fun or take one of our classes and take a "tax write off vacation." It is important to note that we are not affiliated with these credit card companies in any way and do not receive any monetary gain from this blog post. We are not financial advisors, we are simply sharing information that we hope will optimize the way you pay for your travel expenses. - Randal Glaser PT, DPT, OCS, CEAS I
PART I - What is Travel Hacking with Credit Cards?
I will discuss the context, rationale, basic methods for responsibly leveraging credit cards rewards to travel at reduced cost if this is something you haven’t tried before.
PART II - List of the Top Current Credit Cards Travel Rewards Offers (Skip to Here if You Are Already Familiar with Using Credit Cards Rewards)
If you already use rewards from credit cards to hack your travel, go ahead and skip to this section to see a detailed list of top-paying travel rewards credit cards with relatively low fees being offered currently.
PART I: WHAT IS TRAVEL HACKING? THE CASE FOR A TYPICAL WORKING PHYSICAL THERAPIST:
With working in the physical therapy profession, one can appreciate the job options across the diverse range of specialities, security, demand, flexibility, and freedom of choice to pick a desired setting or patient care structure to work in that many other professions do not have. One of the finest aspects of this profession is the opportunity to combine learning or teaching at weekend courses and/or conferences with personal travel aspirations. For example, you happen to be interested in taking a manual therapy course that is taught internationally, and one of the weekends takes place at a country of desired travel. Nothing like combining two things you enjoy in the same trip, right?
The Jetset team in Honolulu, Hawaii using their Chase Ink business card.
THE PROBLEM: TRAVEL GETS EXPENSIVE AS WE ARE TRYING TO BALANCE OUT PAYING STUDENT LOANS, RENT/MORTGAGES, ETC.
I’m sure many of you have compiled ambitious travel bucket lists and goals for the short-term future to maximize upcoming or planned vacation time. Or maybe you would like to take a nice international exotic vacation, but feel hesitation because of how expensive travel can get unless you get the right deals. You want to treat yourself, but student loans and other financial obligations such as a mortgage or car payment make you think twice.
The good news is that there are ways to work around the inevitable expenses in life such as student loan debt and a mortgage to ensure that you can still afford to stretch a con-ed weekend into an enjoyable, discounted, and sometimes even free, travel experience while not feeling guilty about draining your bank account in lieu of pursuing your travel aspirations. Furthermore, why unnecessarily pay for travel expenses when instead, you can save some dollars and get a trip at reduced cost (or even next to free after claimed bonuses) especially when you are trying to balance managing life’s other expenses like student loan debt and a mortgage? After all, you worked hard for your expensive degree, and need a periodic break from the hustle and bustle of the clinic or hospital to avoid burnout if you are to work for many more years.
THE SOLUTION: TRAVEL FOR FREE OR AT REDUCED COST THROUGH RESPONSIBLY USING CREDIT CARDS REWARDS AND PERKS:
One way to attain free (or reduced cost) travel opportunities is through taking advantage of some incredibly generous credit card sign-up bonuses and rewards for accumulated travel points that provide perks in the form of redeemable flights, hotel stays, car rentals, upgrades, travel statement credits, or cash back. It takes some research and work through the fine print to fully grasp the offers, but the payoff is well worth it.
Why use a credit card over a debit or cash purchase? Many credit cards offer great travel rewards not found otherwise when using debit cards or cash to make corresponding purchases.
In various combinations, here are some of the possible bonuses and rewards either come with a card, or can be bought with accumulated travel points from your bonus and purchases:
Free or discounted flights & upgrades
Free or discounted hotel/resort stay, or spa & upgrades
Free or discounted car rentals
Special airport lounge access
Global Entry
TSA Pre-check
Free checked bags
Priority boarding
No foreign transaction fees
Annual travel credit on your account anniversary
Shopping discounts with select merchants and retailers
Extended warranty on purchases made on card
Fraud coverage
Different credit cards also come with various forms and combinations of Purchase Protections; again, incentives not typically offered with cash or debit card purchases, such as:
Car Rental Accident Protection (For example, you do not have to purchase additional rental car accident insurance if you made the car rental purchase on a benefited credit card.)
Travel Insurance Protection with Partial to Full Reimbursement (your trip gets cancelled under qualified conditions, or delayed beyond a certain duration)
Lost Baggage Protection
Emergency Hotline
Recently, I used credit card bonuses and rewards from the Chase Sapphire Preferred card almost entirely paid for my round-trip flight and 5-night Hilton Hotel stay during a recent trip to Kauai and Oahu earlier this year in January. From a combination of accumulated points from the sign-up bonus and spending on routine expenses with my card, I only had to pay out-of-pocket a little more than $200 out for a five-day trip that would probably normally cost anywhere $1,500 to $2,000 with this general itinerary. I made sure to pay off the full monthly account balance to ensure none of this involved incurring new debt or interest.
Travel photo from a Jetset trip. Yes we used our points!
A QUICK, REPEATABLE PROCESS TO RECEIVE TRAVEL REWARDS AND BONUSES OVER AND OVER AGAIN:
Open credit card with offer of interest, which is done within a matter of minutes online.
Set your new account to autopay of the full monthly balance as mentioned above.
Once you get it in the mail, put all of your standard monthly expenses (gas, groceries, entertainment, etc.) on that card until you reach your spending threshold to claim your bonus. Be sure you know the total spending amount needed and deadline timeframe. If you plan on traveling for a course, pay for the course on your card knowing that your employer eventually reimburses you.
Redeem bonus for your current or next trip.
Repeat the cycle with a new card that has a major bonus (I opened a second travel card before my trip and started spending towards that bonus).
IMPORTANT ASSUMPTIONS BEFORE YOU START:
Here are some conditions to ensure before you open credit card accounts in order to not create new financial headaches, or to avoid magnifying existing financial obligations that can send a personal financial situation into downward spiral:
You have excellent credit (700+?), otherwise you may not be approved for these offers. Get a free credit report from secure sites such as Credit Karma, Free Credit Report, Annual Credit Report, or with various free personal finance and budgeting apps such as Mint or Personal Capital.
Your current financial situation is NOT living paycheck to paycheck, and you are not behind in payments with existing debt. Avoid digging a bigger financial hole, pretty self-explanatory here.
You plan on paying off the FULL statement balance on time each month, otherwise you accrue needless high-interest debt and the credit card company likely revokes your earned rewards. This is good practice even with a card that comes with a temporary 0% APR introductory offer - either you pay now, or pay off a much larger balance later, which could put you in a bind. And missing a monthly payment or coming short causes your credit score to drop. Set the default setting on your account to autopay of the full statement balance immediately after opening your account, then you are covered. Review your monthly statements and account activity weekly to fight any potential erroneous charges.
You aren’t applying for a loan or mortgage anytime soon, otherwise the temporary hit in your credit score from a hard credit inquiry from opening a new account can affect the loan terms and interest rate you are offered. Closing a credit card account in general can also temporarily lower your credit score. In general, credit scores take 6-12 months to recover from these events.
You don’t spend more than you typically spend each week or month, just to get the bonus and more points. Make sure you are only spending on the same typical life essentials, such as paying off utility bills, groceries, gas, dining with your card. It’s counterproductive to your financial well-being to spend more frivolously just to get a comparatively smaller reward.
You will read the fine print (links provided in this article) to fully understand a given credit card’s offer, terms, and conditions! Every credit card has different rules for qualifying and claiming bonuses and rewards that may be missed if glazing over the cumbersome fine print. Common qualifying conditions include maintaining an active account in good standing (regular activity every 24 months with no defaults), and not previously claiming the card sign-up bonus in the past. Other common caveats include several card offers restricted to online-only, and/or containing blackout dates and seat restrictions with attempting booking.
"stay after class" and stretch your Con Ed into a vacation!
THE FINE PRINT: OTHER POINTS OF CAUTION BEFORE OPENING CREDIT CARD ACCOUNTS FOR TRAVEL:
Drawback #1 - Initially lowers your credit score (only temporarily if you manage your account right): Your credit score takes a small dip when you open a new card because it triggers a hard credit inquiry in your record.
Solution: Keep your payments on time and credit utilization low (under 30% of available balance for each account) and your score typically recovers within months. Proceed with caution if opening a new credit card before applying for a mortgage, new job, loan (such as personal, student, refinance) in the near future, as opening a credit card before this life event can have a negative impact on your offers.
Drawback #2 - Tracking many account balances and payment due dates becomes overcoming: It helps to be systematic by using Autopay in combination with budgeting apps to keep your financial life in order.
Solution: Set accounts to monthly autopay of the full balance to avoid incurring the ridiculous interest rates of credit cards, despite some cards including introductory benefits such as up to 15 months of 0% introductory APR (annual percentage rate), which essentially makes it an interest-free loan during that duration. A budgeting and personal finance app like Mint can also pool all your data and account balances into one centralized place for weekly review and in case anything unusual comes up in your billing statement.
Drawback #3 - Some rewards take weeks to months to redeem, and you have to redeem within a certain period of time.
Some cards only offer travel statement credits after you have already spent on travel, and your bonus may not post to your account until months after reaching the conditions to qualify for the bonus or rewards, kind of like a travel rebate. You must also redeem on travel purchases within a specific time period, such as 90 days from date of purchase posting on your account. Make sure you are able to pay off a trip and full statement balance upfront to avoid incurring high-interest debt, as mentioned earlier.
Disclaimer: The information on this article is not to be construed as financial or tax advice. Neither I, nor Jetset Rehab, are affiliated, have financial conflicts of interest, or earn commission from any of the services or companies featured above.
Andrew Banh, PT, DPT, OCS is an orthopedic physical therapist who also enjoys reading and researching about personal finance, investing, and travel in his spare time. Follow him on LinkedIn, or his travel, motivational page on Facebook and Instagram: @growthstateofmind.
Part II Click here
If you start collecting bonus points now, you can j join us in Cabo, WITHOUT paying for your flight!