Travel Hacking Frequently Asked Questions

Sometimes the quickest way to get up to speed on a topic is to review questions and answers on it.  So I’ve created this page to give you answers to some of the most frequently asked questions on travel hacking.  I’ll update it from time to time with new questions and answers.

Want to test your travel hacking knowledge?  Take The Ultimate, Definitive Travel Hacking Quiz.

If you have questions I haven’t covered below, send them my way and I’ll do my best to answer them!

Q1: Why should I get in to travel hacking?

A1: That’s easy – you can visit incredible, unforgettable places for pennies on the dollar.  The rewards you can get through travel hacking are often very lucrative.  One example: Whereas a standard cash back credit card may yield you 1% or even 2% on your purchases, with certain travel credit cards you can get signup bonuses worth over $1,000 and ongoing rewards that often equate to 3% or 4% back on purchases.  There are many other travel hacking techniques outside of credit cards also.  They help you turn everyday activities, such as handling your electricity bill, into valuable frequent flyer miles or hotel points.

Q2: What are the best frequent flyer and hotel loyalty programs?

A2: This might seem like a “copout,” but…it depends.  In general, the programs that are best for you will depend on which airport you use most often and what type of hotels you enjoy.  There are some standout programs though when it comes to value per point.  On the hotel side, Starwood and Hyatt points can sometimes be worth as much as 3 – 5 cents per point.  Airline mile values are changing rapidly these days as frequent flyer mile redemption rules change.

Q3: Will applying for travel credit cards hurt my credit score?

A3: Not really.  As I’ve laid out on my credit score page, complete with my actual credit score history over a 17-month period, opening and closing credit cards won’t devastate your credit score.  That doesn’t mean you should be stupid about it.  Opening a new account will have a small and only temporary hit to your credit score.  Your score is much more affected by your payment history (whether or not you’ve been significantly late to make payments) and amounts owed.  For more information, click here.

I created this infographic to show that opening and closing credit cards over 17 months didn't hurt my credit score. It held strong in the 800's! (Click image for high-res version)
I created this infographic to show that opening and closing credit cards over 17 months didn’t hurt my credit score. It held strong in the 800’s! (Click image for more information)

Q4: What is churning?

A4: It’s not the process used to make butter.  In the context of travel hacking, churning is repeatedly acquiring the same credit card to get the signup bonus for that card over and over again.  To be successful with such an approach, you often have to wait a certain amount of time between card applications.

Q5: What is an “app-o-rama?”

A5: Sometimes people confuse an app-o-rama with churning.  Whereas churning is focused on repeatedly getting the same card, an app-o-rama is the process of applying for multiple credit cards simultaneously.  It can lead to increased chances of approval versus applying for the same cards over the course of multiple days.

It’s best to apply for cards from different banks in an app-o-rama.  In other words, you might apply for one card from Chase, one from Bank of America and one from American Express.  If you apply for multiple cards from the same bank simultaneously, your chances of getting a denial go up.  I often do app-o-ramas.  Check out this post for a summary of one of them.

App-o-rama is applying for multiple credit cards simultaneously.
An “app-o-rama” is applying for multiple credit cards simultaneously, which can increase your chances of getting approvals.

Q6: Should I hold on to frequent flyer miles or points until I get maximum redemption value?

A6: While you generally don’t want to redeem points or miles if the redemption rate is much less than normal, holding on to points or miles for very long periods of time is also inadvisable.  Airlines and hotel companies are known to devalue their currencies every so often.  When deciding whether to redeem you should consider the redemption value you’re getting but also whether you’ll be able to use those points or miles for any other valuable redemptions in the future.  If you don’t have any other near-term redemption options, you may want to go ahead and pull the trigger and redeem.

Q7: What is the best domestic frequent flyer perk for couples?

A7: This is certainly a subjective question but there is one domestic perk that is widely considered the best around for couples: Southwest’s Companion Pass.  The holder of the Southwest Companion Pass gets to bring a companion on any flight he/she is on, for free.  That perk lasts for the remainder of the calendar year in which the Companion Pass is earned and all of the following calendar year.  For a ton more information on the Southwest Companion Pass, check out my posts:

Q8: Which bank offers the best travel credit cards?

A8: Chase has long been a leader in the world of valuable travel credit cards.  They offer co-branded cards for Southwest, Marriott, United, Hyatt, IHG, British Airways, Ritz-Carlton, and Disney.  They also offer the highly-valuable Sapphire Preferred, Freedom and Ink (business) cards.

Lately though CitiBank has been making moves, improving their Premier and Prestige ThankYou cards and they also offer co-branded cards for American Airlines and Hilton.

American Express is another player in the travel credit card game.  Their most well-known travel credit card offering is the Starwood Preferred Guest card, which is available in both a personal and business version.  They also offer co-branded cards for Hilton and Delta.

Barclay is mostly known in the travel world for one offering: its Arrival Plus World Elite card.

Q9: What is the Chase 5/24 rule?

A9: In late 2015 anecdotal evidence made it clear that Chase had instituted a new policy.  The policy is that Chase will not approve an application for the Sapphire Preferred, Freedom (and possibly Ink) cards if the applicant has opened more than 5 new credit card accounts in the past 24 months.  Some folks believe that the policy may be enforced even against those who have opened exactly 5 new credit card accounts in the past 24 months.

As of writing this policy only applies to the Sapphire Preferred, Freedom and possibly Ink cards.  However, there are some indications that this policy may be applied to all Chase cards (e.g. Southwest, Hyatt, etc.) in the near future.

The policy is unlikely to affect most people new to travel hacking as those people are unlikely to have opened 5 or more credit card accounts in the past 24 months.

Q10: What is manufactured spending?

A10: Manufactured spending is spending created, usually on a rewards credit card, specifically to meet a minimum spending requirement or to generate additional rewards.  The goal is to do that with a net-zero or close to net-zero outlay.  Methods to manufacture spend change over time as store and bank policies change.  Some involve gift cards, money orders, etc.

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4 thoughts on “Travel Hacking Frequently Asked Questions

  1. Off the subject- do you know the statistics on zika and Gillian Barre syndrome in Cancun area? Is tis affecting rates on hotels? Has anyone ever taken the catamaran to Isla Mujeras and then rented golf carts on the island. We heard mopeds are dangerous with traffic.

    1. Hi Sage!

      Many years ago I visited Cancun with friends and we took the catamaran over to Isla Mujeres and drove golf carts around the island. It was a fun time. I’d agree with the sentiment that golf carts are safer than mopeds in that setting. I also remember that there was a shark pen at the pier where you could “hold” a tame shark.

  2. Thanks for doing a stint on MMS. My husband & I jumped into this whole new world (cue the orchestra) about a year ago. One thing I’ve noticed is that, although we essentially have the same information and excellent credit, his credit score is always a little bit better than mine and when we apply, mine gets hit harder and has a slower bounce-back. Do you have any info or anecdotal evidence about why this happens. It fries me because I’m the financial mastermind in the family, but I am also curious…

    1. Hi Carole!

      You mentioned that you and your husband essentially have the same info but have you checked your credit reports to confirm there’s no incorrect info showing up?

      Does he have a longer credit history or greater credit limits? The former would definitely help and the latter can help by keeping utilization ratios low.

      One thing to keep in mind – once your credit score is into the “excellent” range, increasing it further doesn’t have much of an “accessible” benefit. A person with a credit score of 825 is probably going to get the same interest rate on a loan as someone with a credit score of 800. So if your scores are excellent, it’s probably not worth fretting about though I definitely understand how it could be annoying in your case.

      BTW, here’s an interesting article on credit score vs gender: http://www.bloomberg.com/news/articles/2016-02-10/does-your-gender-affect-your-credit-score

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