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5 Steps To Travel The World For Free – Forbes

Photo By: Taylor Weidman/Bloomberg

</div> </div> <p>As a financial planner, I want to help my clients achieve all their hopes and dreams; however, some dreams are more expensive than others and it’s hard to balance the limitations of someone’s earning and saving potential with their desires.</p> <p>The number one dream for most of our clients at The Financial Gym is travel; and unfortunately even the most frugal travel plans come with a price tag. Thankfully, we employ credit card travel rewards to help our clients achieve their travel dreams in a cost-effective manner, and it’s something you can do as well.</p> <p>Many of us know of or utilize credit cards with rewards points, but the key to credit card travel hacking is not in the ongoing use of the cards, it’s in the strategic usage of the sign-up bonuses. Typical rewards cards give users one to two times points for every dollar they spend, so if you spend $1,000 on the card, you earn 1,000-2,000 points. For most travel sites, this won’t even earn you a half a day in a rental car. However, many rewards cards offer high bonuses when you sign up after spending a certain dollar amount. For example, the <a href="https://creditcards.chase.com/credit-cards/chase-sapphire-preferred" target="_blank" rel="nofollow">Chase Sapphire Preferred</a> card offers you 50,000 rewards points when you spend $4,000 in three months, if you were using your regular rewards card, you would have to spend $50,000 to get that many points.</p> <p> </p> <p>Before you start signing up for new cards to achieve your travel goals, though, make sure you follow these five steps so that your travel dreams don’t turn into credit card nightmares.</p> <p><strong>Step 1: Check Your Credit Score</strong></p> <p>Rewards cards, specifically travel rewards cards, provide a number of benefits for their users; however, if you want to get approved for one, you need a credit score greater than 730. I’ve seen clients get approved for rewards cards with lower scores, but nothing lower than a 715. If you don’t know what your credit score is, there are a number of free sites to use like Credit Karma or Credit Sesame. If you already have a credit card with a company like Bank of America, Discover or American Express, they all provide you with your FICO score for free as a cardholder benefit. If your score is lower than you anticipated, you can get a full credit report from each of the three credit reporting agencies through <a href="https://www.annualcreditreport.com/index.action" target="_blank" rel="nofollow">Annualcreditreport.com</a> and use this report to help you build up your credit to take advantage of these cards in the future.</p>

<p><strong>Step 2: Review Your Expenses</strong></p> <p>If you pass the credit score test, the next step to credit card travel hacking is to review your monthly expenses for the last three months and determine how much you actually spend on a credit or debit card. Many of the credit card offers require you to spend a certain amount of money within the first three months to earn the rewards, and you don’t want to overspend just to get the rewards points. Some cards don’t have a high initial spend hurdle, so you want to make sure you find the reward cards that are appropriate for your typical monthly spend limits.</p> <p><strong>Step 3: Figure Out Your Destinations</strong></p> <p>The next step, and I think the most fun step in the credit card travel hacking process, is determining where you would like to travel. Knowing your destination will give you a great idea of the types of cards that can best help you . Clients of mine wanted to travel to Alaska for a cruise, so one of the cards they applied for was the <a href="https://www.alaskaair.com/content/credit-card/visa-signature.aspx" target="_blank" rel="nofollow">Alaska Airlines Visa Signature Card</a>. After they earned those rewards, they then applied for hotel cards that had properties in the cities where they planned to stay before and after the cruise. If you’re not sure where you want to travel, there are general travel rewards cards like the <a href="https://www.capitalone.com/credit-cards/venture/" target="_blank" rel="nofollow">Capital One Venture Card</a> or <a href="https://www.bankofamerica.com/credit-cards/products/bankamericard-travel-rewards-credit-card/" target="_blank" rel="nofollow">BankAmericard Travel Rewards</a> credit card that you can use to get started.</p> <p><strong>Step 4: Create a Hacking Plan</strong></p> <p>The number one question my clients ask before they start credit card travel hacking is “Will this ruin my credit score?” The reality is that if you play the game properly, it will improve your credit score, you just need to make sure that you time the opening of cards accordingly. From an expense and credit score management approach, you should open one card at a time and then wait three to four months before applying for another card. Since it takes a few months to earn the rewards and you need to have some time to book your trip with travel rewards, make sure that you apply for the cards whose points you will need first and prioritize the others after that. For example, you may need to use your hotel rewards points before you have to book your flights, so you should apply for and churn the hotel card before opening the airline card.</p> <p><strong>Step 5: Manage Your Cards</strong></p> <p>When you use credit card sign-up rewards for travel, you need to make sure that you don’t overspend to earn the points and you also need to make sure you don’t pay unnecessary fees in the effort to earn points. Many travel rewards cards have an annual fee; however, they will waive the fee for the first year. If the card is not one that you imagine using all the time, then you need to remember to either downgrade to a non-rewards card or cancel the card before the one-year free period is over. A good way to track your plan and manage your cards is to create a spreadsheet with all these details to keep organized.</p> <p>If travel is one of your dreams, but saving for it is difficult, think about leveraging the sign-up rewards of credit cards to help you achieve your travel dreams, just make sure you follow all the steps and use the cards to your advantage rather than over-spending or letting fees get in your way.</p>” readability=”65″>

Photo By: Taylor Weidman/Bloomberg

As a financial planner, I want to help my clients achieve all their hopes and dreams; however, some dreams are more expensive than others and it’s hard to balance the limitations of someone’s earning and saving potential with their desires.

The number one dream for most of our clients at The Financial Gym is travel; and unfortunately even the most frugal travel plans come with a price tag. Thankfully, we employ credit card travel rewards to help our clients achieve their travel dreams in a cost-effective manner, and it’s something you can do as well.

Many of us know of or utilize credit cards with rewards points, but the key to credit card travel hacking is not in the ongoing use of the cards, it’s in the strategic usage of the sign-up bonuses. Typical rewards cards give users one to two times points for every dollar they spend, so if you spend $1,000 on the card, you earn 1,000-2,000 points. For most travel sites, this won’t even earn you a half a day in a rental car. However, many rewards cards offer high bonuses when you sign up after spending a certain dollar amount. For example, the Chase Sapphire Preferred card offers you 50,000 rewards points when you spend $4,000 in three months, if you were using your regular rewards card, you would have to spend $50,000 to get that many points.

Before you start signing up for new cards to achieve your travel goals, though, make sure you follow these five steps so that your travel dreams don’t turn into credit card nightmares.

Step 1: Check Your Credit Score

Rewards cards, specifically travel rewards cards, provide a number of benefits for their users; however, if you want to get approved for one, you need a credit score greater than 730. I’ve seen clients get approved for rewards cards with lower scores, but nothing lower than a 715. If you don’t know what your credit score is, there are a number of free sites to use like Credit Karma or Credit Sesame. If you already have a credit card with a company like Bank of America, Discover or American Express, they all provide you with your FICO score for free as a cardholder benefit. If your score is lower than you anticipated, you can get a full credit report from each of the three credit reporting agencies through Annualcreditreport.com and use this report to help you build up your credit to take advantage of these cards in the future.

Step 2: Review Your Expenses

If you pass the credit score test, the next step to credit card travel hacking is to review your monthly expenses for the last three months and determine how much you actually spend on a credit or debit card. Many of the credit card offers require you to spend a certain amount of money within the first three months to earn the rewards, and you don’t want to overspend just to get the rewards points. Some cards don’t have a high initial spend hurdle, so you want to make sure you find the reward cards that are appropriate for your typical monthly spend limits.

Step 3: Figure Out Your Destinations

The next step, and I think the most fun step in the credit card travel hacking process, is determining where you would like to travel. Knowing your destination will give you a great idea of the types of cards that can best help you . Clients of mine wanted to travel to Alaska for a cruise, so one of the cards they applied for was the Alaska Airlines Visa Signature Card. After they earned those rewards, they then applied for hotel cards that had properties in the cities where they planned to stay before and after the cruise. If you’re not sure where you want to travel, there are general travel rewards cards like the Capital One Venture Card or BankAmericard Travel Rewards credit card that you can use to get started.

Step 4: Create a Hacking Plan

The number one question my clients ask before they start credit card travel hacking is “Will this ruin my credit score?” The reality is that if you play the game properly, it will improve your credit score, you just need to make sure that you time the opening of cards accordingly. From an expense and credit score management approach, you should open one card at a time and then wait three to four months before applying for another card. Since it takes a few months to earn the rewards and you need to have some time to book your trip with travel rewards, make sure that you apply for the cards whose points you will need first and prioritize the others after that. For example, you may need to use your hotel rewards points before you have to book your flights, so you should apply for and churn the hotel card before opening the airline card.

Step 5: Manage Your Cards

When you use credit card sign-up rewards for travel, you need to make sure that you don’t overspend to earn the points and you also need to make sure you don’t pay unnecessary fees in the effort to earn points. Many travel rewards cards have an annual fee; however, they will waive the fee for the first year. If the card is not one that you imagine using all the time, then you need to remember to either downgrade to a non-rewards card or cancel the card before the one-year free period is over. A good way to track your plan and manage your cards is to create a spreadsheet with all these details to keep organized.

If travel is one of your dreams, but saving for it is difficult, think about leveraging the sign-up rewards of credit cards to help you achieve your travel dreams, just make sure you follow all the steps and use the cards to your advantage rather than over-spending or letting fees get in your way.

5 Steps To Travel The World For Free – Forbes

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