My Travel Philosophy

Travel often, but spend little-to-nothing on big ticket items like flights and accommodations. This allows for money to be guiltlessly spent on great food, spectacular excursions, and unforgettable experiences.

How?

You’re undoubtedly asking how this is even possible. I’ve figured out a way to use sign-up bonuses, travel tools, and research. Over the last few years, I have refined this process (and made a bunch of mistakes so you don’t have to!) that I want to share with you so you can have hundreds and potentially THOUSANDS of dollars in free travel every year.

We all have to spend money to live, but what if I told you that you can turn that spending into a 10-day international trip that will make you the envy of the office?  Read on!  Most of our expenses can go on a credit card in one way or another.  And lots of credit card companies will pay us for using their cards.  And I’m not just talking 1%, 2%, or even 5% cash back.  I’m talking hundreds and hundreds of dollars.  So why not use that to our advantage?  Now, this is where the slope can get very slippery, so there are two rules we have to follow before doing this:

Rule #1: NEVER spend more than you would if you were paying with cash.

Rule #2: ALWAYS pay off the credit cards every month.

If we don’t follow these two rules, we will end up in way more trouble than this strategy is worth.  But if we are willing to have the discipline, it can pay off immensely.

Sign-up bonuses:

So, you are interested in the hundreds of dollars I talked about?  They come in the form of credit card sign-up bonuses.  You have probably scored a couple if you are a normal credit card user.  They’re pretty cool.  Money back just for spending!

Credit card companies offer these bonuses in order to get more of our business.  The way they make money is by charging store owners a fee for each purchase made with a card.  We (the customer) don’t see this fee, but that’s how a card company makes money.  Therefore, the more we use the card, the more the card company makes.  They want us to get the card and use it so they offer sign-up bonuses.  They bank on the fact that once we have the card, we will keep using it.  If they give us the bonus and then you stop using the card, they probably don’t recoup the amount that they give you in bonuses.  So they come up with offers like 3x rewards on restaurants, 2x rewards on gas, and 1x on everything else to keep us using the card.  But if we take a look at it, the sign-up bonus is WAY better than even the best of the lasting rewards programs.  

Take a look at the difference.  There are a bunch of cards that offer $500+ in sign-up bonuses for spending $3,000 in three months.

Rewards after spending $3,000	Expressed as a %
3% cash back (a very generous credit card reward program)	$90	3%
$500 sign-up bonus (a very reasonable credit card bonus)	$500	16.6%

Why would we ever settle for 3% when we can have over 16%?!  This is where we start doing things a little differently than the average credit card user.

Rule #3: ONLY spend on a card that you’re currently accruing a sign-up bonus

What that looks like in practice:

Hypothetically, let’s say we spend $1,200 a month on a credit card.  (If you don’t know how much you spend, head here for an article about budgeting and some cool tools you can use to get your finances in tip-top shape.)  That means over a 3-month period, we spend $3,600.  Many credit card bonuses have a “minimum spend” that spans a 3-month period, so knowing that number makes it possible to determine the new credit cards we can apply for.

We find the first card you want to apply for and are approved.  The minimum spend for the card is $3,000 in the first three months.  (Remember that the clock for the bonus starts ticking the day we get approved!)  Let’s say that day is January 19th.  Come April 19th, given that we have put all our purchases on this new card, you’ll have the sign-up bonus!  That’s great, except that we technically spent an extra $600 on the card that you didn’t need to qualify for the sign-up bonus.

Here’s what we do instead.  When we have spent about $2,750, we apply for the next credit card on our list.  That way it can be in the mail on its way to us before we hit the $3,000 on our original card. As soon as that $3,000 limit is hit, you move all of your spending to the new card and start accruing the next sign-up bonus.  This means you will be getting a new card fairly regularly.

Some people will argue that you’re hurting your credit score by signing up for new cards every few months.  However, when you take a look at the factors that make up a credit score, only a small portion of it is made up of credit card applications.  If you stick to Rule #1 and Rule #2, your credit score won’t see more than a small drop for a month or two.  Don’t believe me?  Go here for an article about credit scores and how I have consistently kept mine around the 770 range for the entire duration of my credit card escapades.

Questions?  Let me know in the comments below.  Otherwise, check out the “New Card Lineup” under the menu Start Here to get started earning valuable travel bonuses!