Airlines Don't Want you to Know This:
If you're kind of familiar with the term "influencer" you've probably wondered how these people are able to travel so much. If you're like me, you've also probably wondered how you could possibly afford to travel like that too. Well, to do this, they either...
- Receive sponsorships from the companies they're collaborating with (difficult unless you have more than 100k followers)
- Blow a lot of money on overpriced tickets (hopefully not this one)
- OR... know the ins and outs of how airline reward programs work and they've learned how to game the system (the best scenario, AND how I've been able to travel so much)
How do Airline Reward Programs work?
A long time ago, airlines started to realize that they could provide great value to their customers by offering a way to build up loyalty points and earn free travel.
The downside is that plane tickets can range anywhere from 5k to 100k in points (all airlines vary). This is bad because most of them only offer 1 point per dollar you spend on the card. That means you'll have to spend $5000 to earn 5000 points, which will barely cover a one-way domestic flight.
Here's the secret:
Airlines slowly started to realize that they needed a reason for people to register for their cards.
Their solution - add "sign-on bonuses". Where they'll pay you in membership points (30k-80k) to open an account and spend some amount of money ($1,000-$3,000) within a small time period (usually 3 months).
A great example of this is Southwest's Rapid Reward Credit Cards. Their offers cycle through different phases. You can pick up one of their cards and earn anywhere between 40,000 - 60,000 rapid reward points. The average one-way flight with Southwest Airlines is about 8,000 points. The beautiful part about Southwest's offer is their year-long companion pass is open to anyone who can earn 110,000 points in a single year. This pass lets you designate one person who can fly with you wherever you go for just $5 in fees - Valid for one year. The companion pass is also transferable up to three times between three different people.
This probably sounds too good to be true. But I'm living proof that this is possible. I earned my companion pass in 2017. It has let me take 3 different trips with my girlfriend for free, and it is valid until December 2018.
On top of the Companion Pass, I earned 110,000 points. To put that into perspective, I've only used 30,000 points for all three of the round trip flights that I took in 2017. That means I still have 80,000 points to spend (where my companion can tag along for free).
Disclaimer: All of those flights were scheduled during non-peak travel times. I used Southwest's low fare calendar and I proactively watched their Fare Sales to find the best deals so that my points would stretch for as long as possible.
Lucky for you, Southwest has two different cards, the Southwest Premier Visa Card and the Southwest Plus Visa Card. Both of these referral links should get you 50,000 points. Southwest's base sign-on reward is worth 40,000 points. They always keep one of their three card's sign-on bonuses at 60,000 points.
If you follow the links above and are approved for one of the cards. You could claim your rewards on one of them, then wait a month or two for the second card to be worth 60,000 points. Once you get the sign-on bonuses for both cards (earning 110,000 points), you'll qualify for the Companion Pass the following billing cycle (free flights for your guest).
You can find great deals like this for any airline (international flights too). Just google "[Name of Airline] credit card" and search for their sign on bonus offer.
This August, we are taking a 5 person trip to Alaska. We will only be paying $200 in airfare for all five of us. I'll have a write up on how we plan to accomplish this in the next month or so.
Should I buy whatever I can to get the Sign-on Rewards??
No. Absolutely not. That's batsh*t crazy. The only way for this to be worth it is if you ONLY pay for things that you normally would, and also pay off the card immediately. The moment you start to carry debt, this strategy is no longer worth it.
Remember: Credit Card interest is the highest interest rate you can carry 15% - 25%.
I've created a list of examples of how I've seen people do this successfully:
- If you're in college, and you're renting an apartment. You're probably paying through a property portal. Find out if they take credit cards. Start charging your rent to your Credit Card, and pay it off immediately. At the very minimum, your rent is $500. Within three months, your rent will have covered 3/4 of the above Southwest sign-on bonus. The other 1/4 can be your gas, your groceries, textbooks??, utilites, etc.
- If you have car payments, find out if your lender will take payment via Credit Card. At the very minimum, that's another $100 - $300 a month working towards your goal.
- Student Loans should be the exact same scenario as the one above.
- This last one is one that I haven't tried myself. But I don't see why it wouldn't work. It involves Cryptocurrency, but it doesn't require you to own any coins. Open a Coinbase account, deposit money into it via your Credit Card. Transfer it to their partner service GDAX. Then withdraw it back to your bank account and pay off your Credit Card. The reason for the transfer is so you don't have to pay Coinbase's fees.
Will this affect my Credit Score?
You're probably concerned that this will lower your credit score. As long as you're conscious about the credit that you're taking on, you should be fine. I've been doing this for almost two years now. I'm 20 years old, and my credit score is in the low 800's. I have opened 5 different credit cards through various airlines and have been able to travel more frequently than most.
Each credit card application is a "soft pull" on your credit score. That means it's a blip on your report and is not as serious as a "hard pull" or a "credit inquiry". The latter negatively affects your credit score when you're applying for an auto loan, a house loan, etc. Of course, if you continue to apply and get denied for cards, you should probably take a break and try again when your credit looks healthier. You can check it for free through transunion once a year.
Here's how I did it:
My Freshman year in college, I realized that I could pay my rent in a lump sum and in advance. Thankfully, my school's scholarships covered my rent and tuition. At the beginning of each semester, they would cut me a check for my entire living costs (~$5,000).
I started working towards my Southwest cards in January of 2017 (Spring semester). I Paid for 4 months of rent ahead of time and paid it off immediately. Then, in August of 2017 (Fall Semseter) I paid for another 4 months of rent ahead of time in a lump sum). That earned me the companion pass in Septemeber.
Please don't hesitate to reach out if you're lost or confused. My e-mail is firstname.lastname@example.org I'm happy to answer any questions! :)