Over the past year, I have learned some pretty incredible techniques to get FREE travel, worldwide. These mostly involve the use of credit cards; something that has always scared me. When we first got credit cards, we maxed them out, paid high interest (and sometimes late fees), and took years to dig ourselves out. However, now that we have learned that credit cards should only be used in a way that will keep you from paying interest, the tables have really turned. If travel isn’t your thing (WHAT?), there are also tons of ways to cash these out to cash or gift cards, but most cards offer higher incentives for hotels/flights/travel expenses, so we have been sticking to those. If you haven’t already, make sure to check out my post on how we went to Europe For Free, With $1000 In Spending Cash, and then continue on to find out some great ways to get more spending/points squeezed in to your daily expenses.
The first thing to consider is that all cards (at least the ones you should sign up for!) have a BONUS for spending a certain amount, usually within the first 90 days. This is an incentive to get you to sign up for the card, as well as to start using it and seeing how it works for you. Some spending requirements are super low ($500), and some are much higher ($5000), so you should make a game plan for how you will be able to hit the new bonuses before signing up for a card. Also, if you are going to do multiple cards at the same time, it would be best to use a private browser and sign up for all of them at once. We were able to do FIVE cards at the same time with one credit pull this way; our credit also INCREASED 100 points after the first 6 months of using these cards/techniques. Here’s how to hit your spending requirements/boost credit card activity to get the most points and bang for your buck.
- These cards should be the primary thing you use for ALL of your day to day expenses. These include your grocery shopping, gas purchases, restaurants, etc. We have been on a cash system for years since I used to be paid in tips, so every time I use a credit card while out and about, I put the cash I would have used into the bank (or a bank envelope) to later deposit. You have to make sure that you are only charging what you would have normally spent, but if you are using cash/debit, you won’t get the 1-5% back on the cards.
- ANYTHING that can be paid online should be paid via your credit card if possible. Occasionally companies will charge a 1-2% “convenience fee” to use a credit card; make sure to weigh the cost of this with the amount that you will get back from the card. For example, it costs me 1% to use a card for my insurance, but I get back 1% on the card I am using, so it makes sense. Also keep in mind that if you are getting a $500 bonus, a $5 fee may make sense as well. You can also OVERPAY your bills if you can afford it in order to max out spending in a particular promotion (i.e. Chase Freedom offers rotating categories every quarter), or in order to reach a bonus; I have sent in multiple months of payments at once, or pay an annual rate, especially on things like your home owners/car insurance to get an additional discount. Some examples of expenses that we have setup on autopay on credit cards:
- Home Owners Insurance
- Car Insurance
- Health Care
- Dental Insurance
- Trash/Waste Management
- Hulu/Netflix/Gamefly
- Pay your mortgage/rent/property taxes. This is a tough one. Most companies do not accept credit cards for payment of rent/mortgage. However, there is a company that we have been using that is PERFECT to handle this one, and will usually get all minimum spending requirements taken care of just by paying these high expenses. Plastiq works by charging your credit card for your rent (let’s say $1000), and then writes a check to your landlord/mortgage company. The credit card sees it as a regular charge, the mortgage company sees it as a check, and everyone is happy. The cost is usually 1-2.5% to do this, and they have some introductory offers to offset this cost (check out the Video Breakdown For Plastiq for more information). We just finished paying our property taxes with Plastiq, paid 1%, and got back 3%; in this case it was actually a money maker to send through Plastiq!
- All of the above are examples of what is called “Natural Spending”; using your regular expenses to earn credit card benefits. There are also a ton of ways to get “Manufactured Spending”. Most of these are pretty complicated, but the best are through buying gift cards. These should be cards for your regular expenses (like Shell gas, Dominos, Amazon, Home Depot, etc). There are also frequently offers at office supply stores for $10 off, or no activation fee, that make purchasing Visa Gift cards a money maker. For example, Office Depot just ran a promotion to get $10 off of a Visa Gift Card purchase of $300 or more. I purchased TWO $200 Visa Gift cards, got $10 off, and paid $403.90 (including the activation fees). I received 2% back in Office Depot rewards ($8.08), PLUS $20.20 back on my credit card (I have a card with 5% back on office supply purchases), making this a whopping $25 money maker! You can then use these cards on your regular purchases.
Bonus gift card point:
Another way that this gift card purchasing is helpful is with the different categories that you get bonus cash back. For example, many cards offer 1% back on all categories, but 2% back on restaurants, gas stations, etc. With my office supply store card, I get 5% back on office supply purchases, including gift cards. If I am spending $100 on Amazon, I will get 1% ($1.00) back. If I purchase an Amazon gift card at Office Depot and use that to pay for my Amazon purchase, I earn $5 back on the SAME $100 in spending. If you purchase the $100 Amazon gift card at Vons, you will get their gas miles, plus most cards offer 2% back on grocery purchases, so you will get double what you would have gotten for going straight through Amazon’s site for purchasing. Amazon also frequently runs promotions like $10 off $50 gift card purchase, which would be another way to get the extra cash back in this category AND get a huge 20% discount on your purchase.
All of these are GREAT ways to increase the amount that you use on credit cards on a monthly basis. I would HIGHLY recommend signing up for these cards so that you can start traveling for free, or even use it to cut your monthly budget as well. There are SO many great opportunities when you are able to make sure that you are not paying anything in interest; you MUST be able to pay off your bill every month or it will negate the cash back that you are earning. If you can do that, then I would absolutely check out my Travel & Credit Card section to get started.
Here are a couple of my FAVORITE cards that I would recommend: