How to fly around the world for (almost) free: our introduction to Travel Rewards

Mrs. Nomad Numbers and I had a passion for international travel from a young age. Recently, we decided to take our passion to the next level by becoming full time slow travelers. Since we started to plan for our nomadic journey we used different methods to decrease our spending. This includes finding the perfect accommodation with up to 40% discount by using AirBnB, paying for our flights by using exclusively travel rewards, reducing our taxes by using specific tax optimization or even reducing using geo-arbitrage to reduce our cost of living by 50%.

In today’s article, we will discuss Travel Rewards. We will explain what they are, how you can leverage them and the ultimate card we recommend to get your started. We will also share how much free flights we got from Travel Rewards in 2018 and what our plans for 2019 are. Let’s get started.

Travel Rewards 101

Travel Rewards (also referred to as “Credit Cards Rewards” or “Travel Hacking”) is where you open targeted credit cards in order to get large travel points sign-up bonus. You then later can use/combine such bonuses to fund your travel. (Such sign-up bonus mostly benefits residents of the United States of America.)

There are 3 types of travel rewards to be aware of:

• Airlines or Hotel rewards – Such rewards come from credit cards that are co-branded with either an hotel chain or an airline company.
  Example: Delta Skymiles Credit card, Marriott Bonvoy Boundless Credit card.
• Fixed value rewards – Such rewards are set in value and can sometimes directly be applied to the money you spent on your credit card to erase it (like the Capital One Venture and their Purchase Eraser)
  Example: Capital One Venture,  Barclaycard Arrival Plus
• Transferable rewards – These points are the most flexible (are usually the most valuable) since you can either use the bank’s travel portal or transfer them to partner airlines and/or hotels.
  Example: Chase Sapphire Reserve.  

IMPORTANT – Travel Rewards only work if you have a good credit score, are able to pay your card in full on time, and are ok to withstand a temporary 3-5 point decrease in your credit score after applying for such cards. If you don’t feel comfortable with any of these, please restrain from opening a new credit card.

THE MOST IMPORTANT RULE OF TRAVEL REWARDS!

How to get the most out of Travel Rewards?

Here are our pro tips to maximize your travel rewards:

1. Pay your card in full every month. We can’t say this enough! If you can’t pay your card each month, please don’t open a new card. Getting into credit card debt is not what we are discussing here. Please make sure that your financial situation is in order first. Nobody wants to unnecessarily increase their debt and/or lower their credit score.
2. Understand the Chase 5/24 rule. If you open more than 5 credit cards in the past 24 months (across any credit card provider) Chase will not approve you for a new card. Pro-tip: Chase is known for having the most valuable rewards points (called Ultimate Rewards), so you want to prioritize opening your Chase cards first.
3. Only aim to get at least $500 worth of total value (after annual fees) when opening a credit card. Don’t open a credit card that will give less than that (like CC with a one-time $50 credit on your next flight or online purchase). The reason for that is that you are limited by the amount of cards you can open with the Chase 5/24 rule.  
4. Avoid annual fees. Most cards will void the annual fee. After that, you can reassess whether or not you still get value by keeping the card open and paying the annual fee.
5. Track your rewards in one place. We use a spreadsheet to keep track of every credit card we open. The information that is important to capture are:
   1. the name of the bank
   2. the name of the card
   3. the type of card (personal/business)
   4. the name and type (transferable. airline miles, hotel points…) of the reward you will be getting
   5. the day your card will renew (which is usually one year later)
   6. the bonus you will be getting
   7. the minimum spend you need to hit
   8. the date by which you need to hit your minimum spending limit
   9. whether or not you have received the bonus
   10. whether or not you want to keep the card open
6. Alternate opening a card for you and your partner (if applicable). This is an easy way to double the benefits. This is especially relevant when such bonuses are part of a limited-time offer.
7. Open business cards before hitting the Chase 5/24 limit. Business Cards don’t count towards the Chase 5/24 rule. So if you’re trying to stay under 5/24, you can still rack up points and miles bonuses with business cards without affecting your ability to sign up for Chase cards in the future! 

What are the best cards to get started?

We highly recommend that you start with the top Chase cards (Chase Sapphire Reserve or Preferred) to plan against the 5/24 rule.

If you already have those cards and are looking for other suggestions, please check out our Credit Cards page where we put the latest credit cards offers we’ve been recently using. And if you’d like to stay updated on our finds, we suggest that you sign-up for our newsletter where we share the latest offer from the cards we’ve been recently opening. 

How much in travel rewards did we earn and redeem?

Now that we’ve introduce the notion of Travel Rewards and how to best use them, let’s look at how we travel rewards we earn and redeem in 2018.

Note: For our latest numbers, please refer to our latest travel rewards spending reports here.

Let’s start with the recap of how much travel rewards we earned from credit cards during the 2018 calendar year:

Credit Card	Opened by	Sign-up bonus / Min Spent	Estimated cash value	Value per $ spent
Chase Ink Business Preferred	Mrs. NN	80,000 Ultimate Rewards (UR) Points / $5K	$1,200 [2]	0.24
Golden Delta Skymiles	Mrs. NN	40,000 Delta Skymiles + a $50 statement credit after making a Delta Purchase within the first 3 months / $1K	$480 + $50	0.23
Golden Delta Skymiles Business	Mr. NN	30,000 Delta Skymiles / $1K	$360	0.36
Credit card purchases	Mr. & Mrs NN	69,323 travel rewards (mostly UR points)	$1040	N/A

In 2018, we were able to accumulate 3 sign-on bonus between the two of us which have an estimated cash value of $2,090 (or 150K travel rewards points). On top of that we also earned an extra 75K of travel rewards point by either flying or making purchases using our credit cards. So in total for 2018 we earn about 220K of travel rewards points.

We also got the Southwest Airline companion pass for the entire year that was able to cut the price of our flight by half. (minus the tax)

Now thanks to travel rewards we were able to get the following airfares for free in 2018:

Let’s now look now how much travel rewards we redeemed in 2018:

International travel: 17 tickets

• 4 Round trip tickets from France to California (for 2018)
• 2 One way tickets from Montreal to San Francisco (for 2018)
• 1 One way ticket from Oakland to Puerto Vallarta (for 2018)
• 2 One way tickets from Mexico City to San Francisco (for 2019)
• 2 Round trip tickets from San Francisco to Aruba (for 2019)

Domestic travel: 6 tickets

• 2 One way tickets from New-York to Oakland (for 2018)
• 2 Round trip tickets from Oakland to Portland (for 2018)

In total we purchased 23 tickets using Travel Rewards in 2018, two third of them (17) were for international travel. This saved us between $6,000 – $10,000 which we would have had to pay out of pocket otherwise. Instead we use a combination of the Southwest companion pass (that is a buy-one-get-one deal on any Southwest flight for all of 2018) and 388K airlines miles.

What are our plans for 2019?

We plan to keep collecting travel rewards through 2019 (we have already received 2 sign-up bonuses for a total of 150,000 UR points) and redeem them to help us reduce our cost of travel. As we plan to visit both Europe and Southeast Asia in 2019, we are looking forward to scoring some pretty sweet deals to help us reduce our cost of living even further. And once we do we will definitely be sharing our story.

Our bottom line

Thanks to Travel Rewards we were able to redeem 23 airfare tickets in 2018 and two third of them were to travel internationally. This helped us (& our family) to fly around the world for (almost) free! While we have been accumulated Travel Rewards since 2016, 2018 has been our biggest redemption year and now that we travel the world for life, we expect that be able to redeem even more Travel Rewards and enjoy the benefits of free travel in the years to come.

If you can tap into Travel Rewards you can also significantly reduce the cost of your travels. Where you aware of Travel Rewards before and if so did you successfully used credit card sign-up bonus to travel to some pretty cool places? Did we overlook something that would help us improve our game even further? Please leave your comment on the comments section below.

Happy & safe travels!

Footnotes:

• [1] We are not currently an affiliate for any credit cards that we are mentioning here (including Chase credit cards). We have shared our referral link from opening this credit card ourselves so you can get the opportunity to sign-up as well. If you sign-up using this link, we may receive a referral bonus of a certain number of Chase Ultimate Rewards points.
• [2] We are able to get a 1.5 cents valuation for all of our UR points because we have the Chase Sapphire Reserve card. If you don’t have this card in your chase account, your UR points will redeem as 1.25 cents.