How We’re Flying for Free as a Family of Five

Note: this post contains affiliate links. Should you use one of these links I may receive a small affiliate fee or bonus points. 

NOTE: this may be of not interest to some readers. I get it. Take a gander at the archives for more on minimalism and simplicity. However, if you have the travel bug but are limited by a modest travel budget, read on. I mentioned we were travel hacking a while back on Instagram and had quite a few people reach out asking for more information. Here it is!

We’re soon to embark on a three week long excursion for our family of five. The destinations? San Francisco, Phuket, Thailand and Dubai in the UAE.  At face value it’s a trip that would cost us $20,000+. But we paid a fraction of that price for our flights and accommodations. My husband has a milestone birthday coming up in 2020 and I recently booked us on a quick jaunt to Tokyo five full days on the ground.  Business class over, first class back and an incredible luxury hotel. Retail price for the vacation is more than we paid for our minivan. We paid nowhere near that.

Late last year I was introduced to travel hacking via credit card bonus offers. I’d heard of the concept for years but it never made sense to me. We had a travel rewards credit card and while we did use the points for travel it took us a few years to have enough points for just one ticket. Even when we were flying a lot as a family the points accumulated at a steady but not astounding pace. I assumed people that were using reward credit cards to get free flights spent a lot of money. What I learned recently was that they weren’t spending a lot of money – they were just making regular purchases on lots of different credit cards.

I’ll mention here that the offers and strategy I share here are for Canadians. Americans have some different rules around credit card offers and I’ll share a post about great strategies for you soon. Pssst… a great card to get started on points in the US is this Everyday American Express. No annual fee and when you spend $1000 on the card in first three months you can get anywhere from 10,000-20,000 points worth a minimum of $100-$200 in travel. 

How did I get in to this secret club of credit card ‘churning’? I met someone that was doing it and she mentored me. She told me where to find information online and patiently answered all of my newbie questions. I dipped my toes in slowly with a few credit cards and as I became more comfortable and created our tracking system I realized I had enough skill to just jump right in. It’s been a lot of fun – think extreme couponing wins – and very rewarding.

Is travel hacking with credit cards right for you?

I can’t emphasize this first point enough: the skills that helped my husband and I get out of debt and stay out of debt for the last ten years are the same skills needed for travel hacking. This is not for everyone. If you:

• carry a balance on credit cards
• forget to pay bills on time
• are tempted to buy more when you have more available credit

Then credit card travel hacking is not for you. If you’re interested in travel hacking, work on paying off your credit card balance, changing your spending habits and get organized around bill payment.

Credit card travel hacking is for you if:

• you pay off credit card balances every month and on time
• you’re highly organized when it comes to paying bills
• you put most of your family spending or work spending on a credit card
• available credit has no influence on how much money you spend
• you’re interested in a hobby that allows your family to travel more than your budget allows

Here are some of the tasks you’ll need to spend time on for travel hacking. I’ll emphasize that for me, this is a hobby. I really enjoy the work involved with travel hacking and I spend 1-2 hours a week reading up on the latest offers and tracking our credit card opens/closures/spending.

When it’s time to book a trip with points I am happy to spend three to four hours researching route and airline options. This isn’t a set it and forget kind of hobby. You can travel hack to many different degrees, as I share below, but all of those degrees require that you be organized and frequently monitoring your progress. Travel hacking tasks:

• monitoring your credit score and credit inquiries (at least once a month)
• checking for new credit card offers (once a month at most)
• opening and closing accounts, transferring points, calculating when you will hit minimum spend bonuses (at least once a month)
• paying bills, changing recurring bill credit cards (minimum once a month)

Is this legal?

Yes. However, a certain amount of discretion is required.

You would obviously never tell a customer service representative that you intended to close a credit card account six months after opening it. And the credit card companies have every right to cancel your account. The best way to stay under the radar is to not call the credit card company if this is your second (or third or fourth) time holding a particular card.

Be patient when waiting for points to show up. Often bonuses won’t show up until a third statement or sometimes later. Apply for cards at a moderate pace, at most one or two a month. In general, hold a card for six months, cancel it, wait six months and apply again.

Is it really free? 

Not completely. To be clear: we’re not flying or staying at hotels for free but for a nominal amount. That $20,000 three week trip? Out of pocket it cost us somewhere between $2-3000 in credit card annual fees and taxes on the flights.

Initially I wasn’t interested in getting any credit cards with substantial annual fees. And if you want to use that strategy it can definitely work for you. Once or twice a year banks have promotions for credit cards with no annual fees. If you stick to those, you could definitely accumulate enough points for a great family trip every other year. If you and your partner/spouse each apply for 4 no fee credit cards a year, averaging 20-30,000 points per card, you could easily have enough points for a domestic trip for a family of four for one week with your hotel covered. Skip a year of the domestic trip and in two years you’d have enough for a 2 week overseas trip.

So why apply for credit cards with an annual fee? More points! In Canada, American Express offers generous and flexible points but they come with an annual fee of $150-$699. On the other hand, getting 70,000 points from one card and using it for a business class flight means that your $499 annual fee netted you a flight worth over $3000.

In my case, I have a large family. We would like to travel once or twice a year and also cover our semi-frequent domestic travel. My kids are in the summer swim club and there are a 3-4  meets that we need hotel rooms for. Plus a few other short trips to ski or run errands in a larger city. If we could get those 10-15 nights of hotel paid for, we would save ourselves a nice sum of money.

Another thing to consider: earning points and using them for travel is tax-free earnings. If your tax rate is 30%+ then having a small hobby of collecting points for travel could save you significant money.

How do you earn a lot of travel miles and points with credit cards quickly?

The ‘secret’ to earning a lot of travel miles and points quickly – for Canadians! – is pretty simple. You open a new credit card with a bonus offer, get the bonus, and then close the card.

Sure, there are some finer points to all of this but essentially that is the big secret. Open card, meeting minimum spend on card, get travel points, close card. Repeat.

What are the finer points? You need to keep track of your credit score and you need to keep track of all the cards you have open.

You MUST close cards before you get dinged with another annual fee. You need to know how long to keep a credit card open and when you can apply for it again.

You need to know which airlines and points programs will fly you where you want to go.

You have to book your tickets as far in advance as possible. Or, book last minute.

You need to know which airlines charge high taxes and fuel surcharges on rewards redemptions and which do not.

Another finer point, and an important one, things are always changing.

Offers can be gone tomorrow and points can be devalued. A great sign up bonus can disappear and be replaced with one that is barely worth the annual card fee. This is why you need to view this as a hobby, one that you are interested in learning more about and keeping up with the news on.

How many credit cards should you sign up for? That depends. What’s your credit score? Are you applying for a mortgage soon? How much is your regular monthly spending on a credit card? Do you have a spouse or partner that is also interested in credit card ‘churning’? I started slowly. I applied for one credit card, cleared the bonus by hitting the spending requirement (it’s usually X amount of spending in the first 90 days that the card is open) and then waited two months to apply for another card. Then I jumped right in:

• Month 1: 1 card
• Month 2: no cards
• Month 3: 4 cards
• Month 4: 1 card
• Month 5: 2 cards
• Month 6: 2 cards
• Month 7: 1 card
• Month 8: 2 cards

In eight months I applied for twelve credit cards. Did it affect my credit score? Yes. Am I worried? No.

I started with scores in the mid-800s and I’m now, eight months later, in the mid-700s.

Tracking Credit Scores

If you’re going to credit card hack, you need to monitor your credit score and credit inquiries.

There are two credit reporting bureaus in Canada: Equifax and Trans Union. You can access your Equifax credit file at Borrowell.com and your Trans Union file at CreditKarma.ca.

It’s important to know which banks use which reporting bureaus.

Trans Union

American Express, Capital One, MBNA, RBC, Scotiabank, Desjardins, Rogers Bank, Tangerine, TD Bank USA.

Equifax

Bank of Montreal, Canadian Imperial Bank of Commerce (CIBC), Capital One, NBC, TD Canada Trust, Chase Canada, HomeTrust, PC Financial

Which credit cards should you apply for?

I’ll link to a some of my favourite cards here but I also recommend you start keeping your eyes peeled for deals from the big banks like RBC, CIBC, TD and BMO. Those banks typically have offers a couple times a year for cards with a minimum spend for bonus, and, importantly, first year annual fee waived. These are great options for offsetting travel costs, getting a few nights hotel for free or saving up AirMiles (great for Disneyland tickets). In addition to the cards below we have applied for cards with all of the big banks. Get the bonus, hold for six months, close. Apply again at least six months later (or more). Rinse and repeat.

American Express has the best rewards of any Canadian credit card issuer. They are generous and flexible. The catch is that all cards have an annual fee and some are steep. Here are my favourites:

My pick as a starter card? The American Express Gold Rewards Card (scroll to the bottom for the link to the Gold card). 25,000 points when you spend $1500 in the first three months, $150 annual fee. Convert those points to Aeroplan and that’s a roundtrip flight in North America.

Cobalt American Express Card: this card is great for flexibility in travel. Aimed at Millennials, instead of an annual fee users pay $10 per month. The Cobalt American Express accumulates 1 point for every dollar spent and for the first year they offer a 2500 point monthly bonus if you spend $500 a month on the card. This card has an incredible multiplier for grocery and dining of 5x the points. So your $500 in grocery and dining equals 2500 points (minimum value of $25). In a year this card will cost you $120 in fees and earn you $600 in travel credit if you spend $500/month on it for dining and grocery. Many people make this card a ‘keeper” (ie. don’t cancel it and reapply) because the points are so flexible and the 5x multiplier on dining and grocery is the best return of any card.

I’ve had this card for for eight months and like how flexible the points redemptions are. We booked a hotel in August and every month that I accumulate points on the card I can put the points directly against the transaction. One point equals 1 cent against travel spending and .7 of a cent against other spending. The Cobalt American Express Card is a great long term card to use for travel spending that is put directly on the card.

Other American Express cards that offer generous sign up bonuses:

Note: American Express has historically been quite welcoming to small and nonregistered businesses when approving. For instance, I have been approved as a business using my blog and our household

The American Express Business Edge Card (scroll down to find this card offer): $99 annual fee, 40,000 MRS points (like MR points but they convert to Marriott hotel points or can be used against travel purchases) for $5000 in purchases in three months. This is a great new card from American Express that offers you a minimum of $400 in travel for just $99.

The American Express Business Gold: 40,000 MR points when you spend $5000 in three months, $250 annual fee. For $250 you have enough points for a roundtrip ticket to Mexico or oneway in Premium Economy to South America.

The American Express Business Platinum: a hefty $499 annual fee and a whopping $7000 minimum spend in three months gets you 75,000 MR points plus global airport lounge access. Is it worth it? For us it has been. Our Dubai-Thailand trip cost of 450,000 Aeroplan points and $600 in taxes for the what would have cost us a minimum of $12,000 in flights. So the $499 annual fee gave us $1950 in flights.

The American Express Personal Platinum: $699 annual fee (includes a $200 travel credit), 60,000 MR points when you spend $5000 in three months and global airport lounge access. It’s a steep annual fee but if you remove the $200 travel credit, you are getting 60,000 MR points – for our recent bookings we were getting 2.6 cents per MR so $1560 in value – for $499.

Interested in almost free hotels? American Express offers two Marriott Bonvoy Cards: business and personal. If you spend $3000 on the card in three months you’ll receive 50,000 points, enough for 3 nights at a category 2 hotel. This card can also be worth it to hold onto as after the first year you receive an annual free night award on your anniversary of holding the card. We booked five nights in Phuket Thailand at a great resort for 100,000 Bonvoy points – the rooms retailed for $400 + USD/night, the annual fees on the cards I used to collect the points were $120 (Bonvoy Amex Personal) and $150 (Bonvoy Amex Business – scroll to bottom of that page to see the offer). So $2000 USD in hotel cost me $270 CAD. Not free but considerably less than retail.

Alaska Airlines Mastercards: Alaska Miles can be very useful for both trips to Disneyland or Palm Springs and trips to Asia. Alaska is a partner of Cathay Pacific and Japan Airlines so that trip to Tokyo or Hong Kong could be nicely taken care of with some Alaska Miles.

There are two MBNA Alaska Airlines Mastercards available to Canadians. With one card the annual fee is $99 and you receive 30,000 Alaska miles when you spend $1000 on the card in the first 90 days. The other Alaska card gives you 20,000 miles for a $1000 spend in 90 days and has an annual fee of $75.

What can you do with 20,000 miles? Book a roundtrip flight YVR-LAX for 20,000 points + $56 USD in taxes. The actual price of that ticket is $356 USD. But with your annual fee of $75 CDN and the $56 USD in taxes it will cost you roughly $150 CDN (even less if you use the trick I share below). And, sweet spot, when you hold one of these Alaska Mastercards you receive a companion fare voucher for Alaska flights that could reduce a second fare.

With 70,000 Alaska miles you could go to Japan.

YVR-NRT (Tokyo) direct on Japan Airlines for 70,000 + $94.10 USD in taxes roundtrip. Actual cost of that ticket is $1113. If you ‘churned’ the Alaska cards, and used the Great Canadian Rebates referral bonus below, the $1113 ticket to Tokyo would cost you roughly $200.

Pro tip for the MBNA Alaska Mastercards: Want to save on the annual fees? Sign up for a Great Canadian Rebates account and apply through the Credit Cards/Finance page on the site and you’ll get $60 back from Great Canadian Rebates. The card with a $95 fee then costs you just $35 for 30,000 Alaska miles and the card with the $75 fee costs you just $15 for 20,000 Alaska miles.

I love to travel but it’s expensive. Even more so with kids along!

Credit card travel hacking has not only greatly expanded our ability to travel – it’s really fun! I love getting a deal and strategizing and this hobby checks both boxes. For more info I recommend checking out PrinceofTravel.com. His archives are a gold mine and while he often focuses on luxury travel hacking, he has great information on how to find the lowest tax and surcharge redemption flights.