I was raised by very frugal parents and was given generally very good financial advice. One thing they taught me was never to get a credit card with an annual fee. With my parents’ advice in my head I would never give a second glance to any card once I saw the annual fee. Why bother? The cashback percentage was rarely enough to make up for the annual fee, plus the idea of paying to use a credit card just irked me.
Then this summer I discovered travel hacking, which is essentially using credit card sign-up bonuses to travel cheaply or in some cases for free. Seeing as travel is basically my favorite thing but I’m a total cheapskate, this seemed like it was right up my alley.
Hours of research later – which, BTW, is totally not required, but totally something that I always do – I decided to try something. That 50,000 Rapid Rewards that Southwest Airlines offers a few times a year with their $95 annual fee card is touted as being two round-trip flights, but it never actually hit me that it could be the truth, and therefore worth several hundred dollars, obviously negating the annual fee quite effectively. And then I ran some searches on Southwest and realized that if I bought at the right time with those bonus points I could actually get three of us to visit my husband’s family in New England and back with that one bonus! Well, then. I got my first credit card with an annual fee. I hit the minimum spend* ($5,000 in 3 months), got the bonus points, and got the tickets.
We have not traveled to New England as a family of four yet – my youngest son joined our family about six months ago – but for the past few years it’s cost about $750 for three of us to go there and back, so for four of us it probably would’ve been about $1,000.
Here’s the cost breakdown for this travel hack:
$95 – annual fee
$33.60 – taxes/fees not covered by Southwest Rapid Rewards
$283.20 – cost for fourth ticket on same schedule
$1000 – estimated cost of four people to New England and back
– $411.80 – cost of hacking our way there
= $588.20 savings!
We saved almost $600 on a trip we would’ve taken anyway by getting the SWA credit card bonus!
This is actually a pretty pathetic travel hack for most people who do this, but you’ll never see me complaining about saving hundreds of dollars. I know how I could’ve made it much better; if I had a high-tier Chase card I could’ve transferred enough points from our Chase Freedom to cover the other plane ticket – but I don’t have one of those. Yet.
Anyway, I’ll post my how-to on travel hacking one of these days, but till then read this series by Travel Summary.
What are my plans for travel hacking?
1. I’d like to get us to New England and back every year for free-or-cheap.
2. I’d like to get at least my husband and me on one awesome trip each year with at least airfare covered. We’re looking at Ireland in 2015 and maybe back to Hawaii in 2016.
* A minimum spend is a dollar amount that a credit card requires you to reach in a certain period of time in order to get the bonus. If you don’t reach this in time you will not get the bonus. In order to reach ours we stopped using our other credit cards completely, except for the Chase bonus categories, and only did our regular spending, and made it with a month to spare. (I think I blame that on going to Hawaii. Ha.) There are many ways to “manufacture spending” – not as wasteful as it sounds, I promise – but we didn’t need any of them.