MISSION REPORT: FORT FUBAR
SITREP: I flew six people and got a rental car for free just by being in the military!
Are you broke as joke and in desperate need of a vacation? Well, I know a way you can travel for virtually free! It’s called credit card rewards, and the secret hack here is to be in the military (we will highlight this momentarily). Credit card companies are offering fantastic deals in the form of credit card points (rewards) for you to use their credit cards. These points are worth thousands of dollars and can be redeemed anytime depending on the credit card company you use. So, with that, let’s get to it!
The Quick Down and Dirty
Open a travel rewards credit card. I recommend the Chase Sapphire Reserve (use this link to apply Chase Sapphire Reserve Link). It comes with a sign-up bonus of 60,000 points when you spend $4,000 in the first 3 months of having the card open. These points are typically worth 1 cent per point meaning that once you receive the points you have essentially $600 of free money to spend on travel. But wait, there’s more! If you book through the Chase portal (their website) you can get a redemption value of 1.5 cents per point, so your 60,000 points are essentially worth $900! That’s $900 of free travel for you to purchase plane tickets, rental cars, and/or hotels. And once you get further down the rabbit hole of credit card rewards, you will find ways to transfer these points to partners (for example Chase points can transfer to Hyatt Hotels or Southwest Airlines), and book flights, hotels, and rental cars at even better redemption rates (think 2 to 4 cents per point), essentially getting a $400 a night hotel for $200 or less (but not paying any actual money because you are using your reward points).
Minimum Spend
Does spending $4,000 in three months sound like a lot? Worried about not hitting the minimum spend level of $4,000 in 3 months to get the bonus? Here are some things you can do. First remember that it’s never worth it to spend extra money to try and get credit card rewards. The point is to put your everyday, normal spending such as electric bill, subscription service bills, gas, groceries, etc. on the card and pay it off as if it were a debit card. This means at a minimum you pay the card off every month and NEVER CARRY A MONTHLY BALANCE! Paying interest on the card defeats the whole purpose. If you can’t pay the credit card balance off every month, then this is not for you. As the Money Guy team says, “Credit Card Use, OK. Credit Card Debt, No Way!”
Second, there are ways to hack the system. For example, you could buy a $1,000 grocery store gift card with your credit card and then use that gift card (after you have hit the minimum spend) to buy your groceries. You can also wait until you have to make a big purchase, such as a dishwasher or refrigerator, and then use the credit card for that.
Stacks on Stacks on Stacks
Once you have hit that minimum spend for the initial bonus, then you can use those points to redeem them for travel. But what if 60,000 points isn’t enough to get you the trip you want? Well then you stack credit cards. Each time you hit a minimum spend and get the bonus, you then open a new credit card and do the whole thing over again. Credit card companies tend to only reward you with a one-time initial bonus and that’s what we are after. We will stack these bonuses and let them build up in our rewards account until we have enough points to pay for the trip we want. It’s that simple.
What about my credit score? Won’t it decrease and bring financial ruin upon my life!? The answer is “not really.” After you get the initial bonus, and spend the points, you will close out the credit card. This will ding your credit score about 5-10 points. As long as your credit score is above 740, you will never have to worry about this. There is no difference in an 850 and 740 from the credit card company’s perspective.
Now if you are getting ready to apply for a loan (for a house or car), I would hold off on opening or closing credit cards until after the deal goes through, just to make sure your credit score is on the up and up. But outside of that, it should not be an issue. You may also have to keep an account or credit card open, so you don’t lose those points. For example, if you have a Chase Sapphire Reserve card and close the card out while you still have points, those points will be lost (assuming you have no other Chase account open).
Double the Pleasure, Double the Fun
Another hack is the know that you and your spouse count as two separate people. Your spouse should open a credit card separate from you. You can combine the points in your accounts periodically to make it easier for one person to book the travel. If you think you can’t hit a minimum spend without adding your spouse, then by all means add them. But that limits your ability to stack credit cards because of… the 5/24 rule. Chase (whose points are the most valuable and easy to use) only allows for an individual to have opened up to 5 credit cards in a 24-month period. That means if you try and stack a 6th credit card (and that card is a Chase card); they will deny you. But like I said, your spouse counts as a separate person. So, between the two of you, so long as your credit card is not joint, each of you could open up 5 cards in a 24-month period (that’s a total of 10 cards). And if each card gives you 50,000 points (which it should yield more), that’s 500,000 points or $5,000 of travel in a two-year period!!! Not even including getting a better redemption rate for those points.
Military for the win!
Now here is the hack of all hacks! Chase and American Express (AMEX) waive the credit card fees for active military personnel (not on business credit cards but on personal credit cards). That means the Chase Sapphire Reserve card, that comes with 60,000 bonus points, gives you $300 a year in free travel (in addition), plus airport lounge access and a slew of other amenities is completely free to active-duty military personnel. How much does it normally cost? $595 a year! You get all those benefits for free just for being active duty (or on active orders). The AMEX Platinum card is also the same, waving the massive $700 a year fee for military.
Now to recap. Using the links provided (because you are thanking me for providing you with this information), apply for a Chase Sapphire Preferred credit card (Chase Sapphire Preferred Link). Once you get the initial bonus, apply for the Chase Sapphire Reserve card and get that bonus (Chase won’t let you go from higher tier to lower tier). Then based upon the type of trip you want to take, start applying for the various credit cards associated with that hotel or airline. Chase points are more flexible and easier to use, so that’s why we start with them. If you want to fly to Disney World on Southwest Airlines, open up a Southwest Card through Chase. If you want to stay in an all-inclusive Hyatt resort, open up a Hyatt Credit Card. Once you are intentional about your plans and strategy, the sky is the limit to free travel!
Love this article? Great! Let me know and I’ll produce more. Hate this article? Well, it’s probably ‘cause you hate free money and just want to stay at home all the time. Why don’t you go ahead, respond, and let me know why I am wrong.
*This article was written by FUBAR 6. All opinions expressed in this article are that of the author. This article is not endorsed by the Department of Defense, the United States Army, or any other state or government agency. Comments to the author can be submitted below.