Travel Reward Hacking for Newbies

If you’re angling to travel more often but don’t necessarily have the funds to make it happen, credit card rewards could be your new best friend. With the most popular travel rewards cards on the market, it’s possible to earn airline miles, hotel points and flexible travel credit that can make travel free.

If you’re strategic and willing to play the game, it’s even possible to score thousands of dollars in free travel every year.

Of course, any time credit cards are involved, the stakes are raised. While many offer a few free flights or free hotel stays after you sign up and meet a minimum spending requirement, you have to pay your balance in full and avoid debt to truly benefit.

Since the average credit card interest rate is hovering around 15 percent and most rewards cards come with higher APRs, pursuing rewards while carrying a balance is a lost cause. Like it or not, the interest you’ll pay will absolutely wipe out your rewards.

However, there are other pitfalls many newbies fall into to be aware of. Here are some important travel hacking tips to consider before you dive in:

Don’t Overextend Yourself

One of the easiest ways to score free travel is to sign up for as many travel cards as you can to earn sign-up bonuses. In many cases, you can nab up to $500 in travel in one fell swoop, provided you can spend up to $4,000 on your card within three or four months.

Many newbies get so caught up in these bonuses that they forget to check whether meeting those spending requirements is feasible. When they overextend themselves, they wind up doing crazy things like buying new furniture or buying thousands of dollars in gift cards, so they don’t miss out on the reward.

Before you sign up for a new rewards card to earn a signup bonus, make sure you can reach the requirement with regular spending—and that you aren’t putting your finances at risk.

READ MORE: The 3 Best Reward Cards with no Signup Bonus

Maximize Usual Spending

Another mistake many newbies face is forgetting how to maximize their rewards after they sign up. They may use their travel credit cards for gas and groceries, but they forget all the other bills they can pay.

To earn the most points and miles, it’s important to consider all the bills you can pay with credit. Utility bills, daycare, insurance and cable television can help you rack up more rewards over time.

Of course, the key to truly benefitting is never overspending, no matter what. If you don’t have that part down, then putting more bills on credit will only leave you worse off.

READ MORE: How to Save Money and Use Travel Rewards

Be Strategic

Since some cards offer more points and miles on certain types of purchases, you can get more bang for your buck by signing up for those that align with your spending style and learning when to use which card for which type of purchase.

For example, the Chase Freedom card is offering 5 percent back on your first $1,500 spent at Walmart and select department stores through the end of December. If you have this card but chose to put those purchases on one that’s earning a lower, flat rate, you would be missing out.

While missing out on a few hundred points may not matter in the short-term, not strategizing can make a big difference over the long haul. And if you’re going to bother to earn points and miles, you might as well make the most of what you have.

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