Experiences bring you more happiness than buying things. We've all seen the smiling Instragram photos from beautiful beach getaways and Machu Picu hikes. Millennials love to travel! But who can afford to take all these trips to exotic and gorgeous locations? If you’re like me and most millennials, you’re not exactly rolling in extra cash to throw at awesome travel. Between student loans, rent, and avocado toast, we’ve gotta figure out how to travel for as cheap as possible. Preferably for free. That’s where churning credit cards comes in.
What is churning?
Churning is the process of signing up for credit cards, getting the sign up bonus, and then moving onto the next credit card for another bonus. These sign up bonuses take the form of airline miles, hotel points, and sometimes straight cash. Using these bonuses allows you to fly for free (or as close to free as possible).
All it takes to get a sign up bonus is usually spending $X in Y months. Spending $3,000 in 3 months may seem like a lot, but it's much easier than you'd think. I’m going to show you how you can easily hit the bonus requirements (called “minimum spend”) with your normal month-to-month spending.
Won’t this ruin my credit? Or at least cost a lot in interest?
No, not if you do it correctly. In fact, my credit score has gone up about 100 points since I started (and keeps going up). But, there are a few people who shouldn’t do this:
- If you already carry a balance on a credit card month to month
- You have trouble making payments on time
- If you’re planning to buy a house or car in the next year
If you are already carrying a balance on any credit card, you should stop and fix that first. This is only going to increase your balance. Even one month of paying interest on a credit card you're churning could cost you more than you get for free in bonuses.
If you have trouble making payments on time already, this is going to make it harder. On time payments make up 35% of your credit score, so you really don’t want to mess this up.
If you’re planning to buy a house or car in the next year, all the credit checks (called “hard pulls”) the credit card companies make will show up on your credit report and could lower your score if you make too many (over 5–7 in a 2 year period may negatively impact your score). The number of hard pulls makes up 10% of you credit score. Luckily, these stop affecting your score after a year.
Adding more cards will also lower your average credit length, which will also lower your score. This makes up 15% of your credit score. You can manage this by closing cards after you get the bonus. I'd recommend keeping them open at least a year or so, because some credit card companies don't take kindly to opening a card, getting a bonus, and immediately closing it.
Like I said, churning has already increased my score, so your mileage may vary here. So think it over, do your research, and be sure you aren't going to buy a house in the next year or so. A higher mortgage rate is definitely going to cost you more than even the most exotic of vacations!
Ok, how do I travel for free?
Step one is to pick your first credit card. There’s about a million options out there, but I put together the 3 best options, depending on what you're looking for. You’ll notice these are all Chase cards. Chase has some of the best bonuses and will deny you if you’ve opened 5 or more credit cards in the past 2 years, so it’s best to start with Chase cards, then move on to other companies.
Note: Some of these links are affiliate links and I may receive compensation when you click them (and some I won't). I don't let this affect my articles, but I like to be transparent.
The Chase Sapphire Preferred is one of the best starter cards for anyone looking for some free vacations. For spending $4,000 in the first 3 months, you're going to get 50,000 free Ultimate Reward points. The annual fee ($95) is waived for the first year. Even better! Plus the physical card is metal. Trust me, it’s fun to throw a metal card down when you’re splitting the bill.
Those 50,000 points can be redeemed for $625 worth of travel. That should be enough for to get a round trip international ticket to most places, or two round trip tickets to someplace warm, like Cancun! Alternatively, you can transfer your points to partners like United and Hyatt, where your points could be worth 2 or even 3 times as much!
The Sapphire Preferred has a bunch of other great bonuses built in, like 2x points when you use it on travel and dining, rental car insurance, and no foreign transactions fees (definitely bring it on your first free vacation!).
I find this card useful enough that I kept it after the first year, even paying the yearly fee. It's a really nice card!
The Chase Sapphire Reserve is very similar to the Sapphire Preferred, but with a lot of extra features. For spending $4000 in 3 months, you get the same 50,000 Ultimate Rewards points as the Preferred. The physical card is still a heavy, metal card. You get all the features of the Preferred, but the real draw is all the other bonuses that make sure you're traveling in style.
Every year, the Reserve will reimburse $300 worth of travel purchase you make with the card, which can be a flight, bag fees, car rentals, hotels, cruises, and more. You also get free access to Global Entry (usually $100), so you can skip the long customs lines and use the shorter TSA Pre lines at the airports. This card also has some other great non-travel perks like free extended warranties and return protection.
The major downside is the card's yearly fee of $450, which is not waived the first year. The fee is offset by the $300 travel credit and Global Entry credit, so if you plan to travel this year, the price isn't too bad. It may be worth canceling it after the first year. Either way, this is the card I would personally start with. Those perks are too sexy to pass up!
Travel With Bae
Southwest is hands down my favorite airline. Between 2 free checked bags, no ticket change fees, their simpler and faster boarding, and their international flights to all the best beach locations, what's not to love? The best reason to love them though, is their Companion Pass program. The Companion Pass makes them a no brainer if you're doing all your traveling with someone else. The program allows you to book a Southwest flight, and then get a second ticket for your bae or best for free. Crazy, right?
To qualify, you need to rack up 110,000 Southwest miles in a calendar year. Then you get your companion pass for the remaining calendar year and the entire next year. That means you're getting anywhere between 13 and 23 months of free travel for your bae. That’s some serious savings. This one is a bit trickier (and more expensive) to pull off though.
You’ll need to apply for both the Southwest Rapid Rewards Premier and Southwest Rapid Rewards Plus cards, complete their minimum spends ($2,000 in the first 3 months each). You can apply for one card, then the other so you aren't trying to spend $4,000 in 3 months. Each card has a year fee that isn't waived the first year ($99 and $69, respectively). So total, the Companion Pass is going to require $4,000 and cost $168 in fees, but you can spread it out over 6 months if you need, unlike the previous cards. At the end you’ll have a ton of miles to spend on Southwest flights plus you’ll have effectively doubled them with the pass. Nice!
Note, these cards are also under Chase’s 5 cards in 24 months rule, so you should do this one before the Sapphire cards if you’re going to do all your travel with another person. The best time to apply for these would be just before the start of the new year, so you earn the first bonus in January and then you can maximize the number of months you have your Companion Pass.
Alright, I Picked My Card, Now How Do I Rack Up My Free Travel?
This is way easier than you think. Whip out your budget and see how much you spend a month on everything other than your rent and loans (student loans, mortgage, car loan, etc). Is it over $1334? I bet it is! Boom! You can get the bonuses for any card listed above without spending a single dime you wouldn’t have otherwise. The easiest way to get these bonuses is to use your card for everything you were going to pay for anyway. Here’s a quick list of ways to rack up your bonuses:
- Eating out (all that avocado toast)
- Cell phone bill
- Insurance — car, renter, etc
- Gas/Public transit
- Utilities (maybe)
If you switch all your expenses to whatever card you’re currently working on, you should be able to hit the required spending in no time. The first thing I do when I get a new card is set up auto pay so I make sure I never miss a payment. Then it takes me about 30 minutes for every new card to update all my accounts online to use the new card. Once I’ve almost hit the minimum spend, I apply for the next card and switch these accounts to that once I’ve finished the bonus. All these bonuses for 30 minutes every couple months? Totally worth it.
Sometimes things like rent or your student loans can be paid via a credit card. This is almost always a bad idea, because the extra fee you pay to use a credit card eats up all the savings you’re getting from the miles. If you’re super lucky and there’s no fee for a credit card, you should definitely pay for those with your card. And I’m jealous.
Finally, if you’re going to be short of a bonus, you can always buy some gift cards and then use those cards to buy things the next month. I’ve done this with Amazon gift cards, because I buy basically everything from Amazon (groceries, clothes, doggo toys…the list goes on and on). If you need to pick up gift cards, you’ll probably want to take a month off of new cards so you don’t fall behind on payments while you use the gift cards for your normal spending. This should be a last resort though. You can't pay off your credit card balance with gift cards!
Some people use strategies called manufactured spending to hit their bonuses quickly. These are usually complicated, time consuming, and fraught with downsides (cards getting canceled out of the blue or being investigated for money laundering). I like to keep things easy, so I don’t recommend manufactured spending.
If you don’t have a budget yet, go check out Mint.com. After linking your cards and bank accounts, it will automatically sort your spending into various categories. It's super easy and can help you realize how much you're spending on things like groceries and going out. Best of all, it is free!
This Seems Really Complicated
This can be as complicated or easy as you want. You could get the Sapphire Preferred, earn the bonus, and then use it for all your purchases going forward. You’ll get some free travel from the bonus and use very little effort to keep getting miles. But you definitely won’t get as much travel as you could.
Personally, there’s no way I could keep track of all of this, so I built a spreadsheet! You can use the same spreadsheet to sign up, track bonuses, minimum spend, due dates, when to cancel, etc. I find it essential, so I’m providing it to you for free. [link to collect email, direct them to the google spreadsheet right after getting email, and have link to skip giving email]
I Got My First Bonus! What Next?
If I were starting over right now, this is the order I’d go through them. It would probably take a couple years to finish this list, but at the end you’d have about $9500 worth of miles and hotel points, plus $600 in cash. Daaaaang that's a lot of travel!
Miles on Miles on Miles
If you want to focus on free flights, here's the cards I would get, in order:
- Southwest Rapids Rewards Premier - $2,000 in 3 months - 60,000 Rapid Rewards points
- Southwest Rapids Rewards Plus - $2,000 in 3 months - 60,000 Rapid Rewards points
- Chase Sapphire Reserve - $4,000 in 3 months - 50,000 Chase Ultimate Rewards
- Chase Sapphire Preferred - $4,000 in 3 months - 50,000 Chase Ultimate Rewards
- United MPE - $2,000 in 3 months - 40,000 United miles
- American Airlines Platinum Select - $1,000 in 3 months - 30,000 American Airlines miles
- Amex Platinum - $5,000 in 3 months - 60,000 Membership Rewards points
- Citi Prestige - $7,500 in 3 months - 75,000 Thank You Points
How About Free Hotels?
After you fly to your exotic locations, you’re going to need somewhere to stay. I generally prefer cheap hostels, but sometimes you want something a bit nicer or romantic. These cards will help you rack up free nights at hotels, including some rooms much nicer than I’d ever pay for myself.
- IHG Rewards - $1,000 in 3 months - 80,000 IHG Points
- Marriott - $3,000 in 3 months - 80,000 Marriott Points
- Hyatt - $2,000 in 3 months - 40,000 Hyatt Points
Free Cash Is Awesome Too!
Even though experiences bring you more happiness than buying things, you’re still going to want to buy some new things. You can use the bonuses from cash back cards to fund a new iPhone or laptop. Here are some cards with great cash back bonuses: