You are currently viewing 10 Rules About Travel Hacking Credit Cards

Here are the 10 rules and things to know about related to travel rewards credit cards, so you too can start earning hundreds of dollars worth of free travel.

Welcome to our new Travel Rewards section. First of all, make sure you read our introduction to Travel Hacking. so you understand the basics.

You should now know that Travel Hacking is another name given to the world of earning Miles and Points (travel rewards) for free travel. The easiest and fastest way to do so is with credit cards. More specifically: by getting credit cards.

What is by far the most lucrative is what we call the Signup Bonus. That’s why we recommend actual Travel Hacking credit cards, not those cashback cards, because cashback cards usually don’t have a Signup Bonus. And the Signup Bonus is really the way to go to get free travel.

You could easily get about $1,000 worth of free travel every year, I’ve been earning that every year for many years. And if you travel as a couple (or with a friend), you could both get Travel Hacking credit cards and double that amount.

But remember: you have to be financially responsible to get involved in Travel Hacking, as mentioned in the intro article.

This is only the beginning of our Travel Hacking section, many more articles will follow this fall. Join over 35,000 other travel enthusiasts and subscribe to our newsletter to make sure you don’t miss a thing.

So now, which credit cards to choose? That’s a whole other question, and it deserves its own article. It depends on your situation and your objectives. We rank the best credit card offers in Canada every month to help you decide.

But in all cases, it is vital to understand the basic rule for Travel Hacking credit cards, so read this before doing anything.

And just a last side note before I get into it. Travel Hacking credit cards are not credit cards to use when traveling. That’s not what it means. Travel Hacking credit cards get you free travel, that’s where the name comes from. It seems that some people mix up the two concepts, so I just wanted to make sure that was clear.

So here’s what you need to know about Travel Hacking credit cards:

1. The Most Important Rule (And It’s Not Even Close )

You must absolutely pay your entire credit card bill, every month. No exceptions. If you can’t do that, you shouldn’t even consider Travel Hacking, it’s really that simple.

I already mentioned it in our Introduction article, but it’s worth repeating. You won’t ever pay a single cent in interest on any purchase if you pay your entire credit card bill at the end of the month. It’s just like paying with a debit card straight from your bank account. So Travel Hacking is completely free.

2. Pay Everything With A Credit Card

Absolutely everything. This is really the most basic rule. Paying for any purchase with anything other than a credit card is literally like throwing money away. Get rewarded for every purchase by paying with a credit card. You’ll get points or miles that will get you free travel so pay absolutely every purchase you can with a Travel Hacking credit card.

We also have a trick to pay certain bills that normally can’t be paid with a credit card, don’t miss our upcoming article.

Rule 2B is obvious, but let’s spell it out to be safe: you should never spend more just to get points or miles. That’s not Travel HackingTravel Hacking is just being rewarded for your current and normal expenses and maximizing those purchases, not making more purchases. That wouldn’t make any sense.

3. Signup Bonuses

What we were talking about was earning points on a daily basis with your regular purchases. But those earnings will only be a small portion of what you’ll earn, much less than half (unless you’re a huge spender).

The real way to get free travel is with Signup Bonuses (also called welcome bonuses). It is incredibly lucrative and that’s how you’ll get $1,000 worth of free travel every year if you want to.

So, no need to be rich or to spend a whole lot of money to earn miles and points, they are accessible to everyone, assuming your credit score is high enough to get credit cards, which is the case for anybody who is financially responsible. And if you are not financially responsible or if your credit score is low, you should get professional financial advice and work on rebuilding your credit score and certainly not get involved with Travel Hacking. 

Your credit score is an asset, so take care of it… and reap the rewards!

So to get free travel, you order multiple credit cards every year (yes, multiple) and you’ll get Signup Bonuses. I order at least 4 every year, usually more. Unless you aren’t financially responsible (if so, again, don’t get into Travel Hacking), the only reason you should order less than that is if you are just starting out and don’t have a credit card with a long history (we’ll get to that on point #5).

And no, do not believe those who say that you shouldn’t have multiple cards, that is just plain false. That’s the next section.

4. Credit Scores

Ordering 4 credit cards per year is actually very positive for your credit score. Yes, you read that right. As long as you pay every single bill entirely and on time, but again, that’s Rule #1… I won’t repeat it every time.

Why is it positive? Because one of the most important parts of your credit score, as I’ll show you below with a nice graph, is your credit utilization rate. So let’s say that right now you spend $1,000 per month and your credit limit on your only credit card is $5,000… that means you are using 20% of your available credit, which is high… and bad for your credit score. Let’s say you have multiple credit cards, your $1,000 spending represents a much more reasonable credit utilization rate of 5%, which increases your credit score. Banks love when you use as little of your credit as possible. Remember: this only works if you pay everything on time, if you don’t or can’t, do not attempt to enter the world of Travel Hacking.

So yes, a credit card application will momentarily decrease your credit score, but it is a very minimal bump, 10 points or less because that variable is a small portion of the overall score (the smallest). But it only lasts for a couple of months and will quickly be canceled out by your better credit utilization rate, and then it will even increase. Feel free to research this (don’t ask your grandma, ask experts) and you’ll see that getting new credit cards, as long as they’re used intelligently and paid on time, is a great way to increase your credit score (and it helps build your credit history as well).

Here is a graph of what is included in your credit score:

Photo Credit:


So having multiple cards is great: 35% of your score is perfect as long as you pay everything on time, another 30% is the credit utilization rate I was telling you about (How Much You Owe) and 15% is the length of your history (I’ll come back to this one in a second).

You can therefore easily order 4 new cards (experts seem to recommend ordering 2 every six months, that’s what I do, or 1 every 3-4 months). You’ll get tons of points with the Signup Bonuses. You’ll travel for free. It won’t cost you a cent. And it will help your credit score.

I personally have 8 credit cards and I have an excellent credit score. The number of cards you have has nothing to do with your score, just pay everything on time.

And sometimes people say “I already have 2 cards, I’ll cancel one before getting a new one”. That’s really unnecessary. Once you have it, there is nothing negative about keeping it. It’s actually even quite positive, because of the aforementioned credit utilization rate, but also for the length of credit history (the next section).

Lastly, the only exception to this rule is when you are planning to get a huge amount of credit, like a mortgage. If that’s the case, try not to order any credit cards in the six months before and apply for credit cards after the mortgage is signed and done.


5. Always Keep Old Credit Cards Open

The length of your credit history is only 15% of your credit score, but it’s a variable that is so easy to control to increase your score, and very few people know about it, unfortunately. And it’s even more important if you are new to Travel Hacking.

Essentially, financial institutions feel reassured when you have a long history of good credit.

Translation: keep your oldest credit cards open. The longer you’ve had a credit card, the better your credit score will be. So while it is a good idea to reassess your credit card portfolio on a yearly basis, always try to cancel the most recent ones to keep you average length of credit as old as possible.

That doesn’t mean you should pay an annual fee for an old card. You can simply downgrade a card that has an annual fee to a no-fee version from the same financial institution. For example, if you’ve had a CIBC Visa card with an annual fee for a long time, that account has a long history of credit, you shouldn’t close it. You should call CIBC and ask them to transfer that account number onto a no-fee basic Visa card. Then you sock-drawer it. Yes, it means what you think it means. That way the card doesn’t cost you a thing and you keep your length of credit history, which is great for your credit score.

I planned on doing that for both a CIBC and a TD Visa card this year and when I called them, they both actually offered to waive my annual fee for another year to keep me from downgrading, so that’s even better.


6. Some Cards You Should Get And Then Never Use Again

About that sock-drawer thing. One of the most “rookie” comments in the world of Travel Hacking is when people say they won’t order a certain credit card because they won’t use it. Who cares. If the Signup Bonus is good, get it. Then you sock-drawer it as soon as you unlock the Signup Bonus. Then you cancel it just before the Year 2 annual fee payment. You got your Signup Bonus, life is good.

Yes, you simply cancel it after 11 months. That’s why the previous section on keeping older cards is important, to keep your length of credit history pretty old. Some people are scared of ordering credit cards just to cancel them a year later. That’s Travel Hacking. If the card has little perks other than the Signup Bonus, you get the Signup Bonus, you set up a reminder for 11 months later on your calendar, then you cancel it. That’s it.

By the way, never cancel a card right after you’ve unlocked the Signup Bonus. First of all, there’s absolutely no use. Wait just before the next Annual Fee payment. And make sure to read the policy about what happens with your points, miles or travel credits once you cancel the card, as every card is different. If you check that out early, you’ll have 12 months to make a plan to use the points or to transfer them in some way.

So you order cards, you unlock the Signup Bonus and you cancel it at the end of the first year if the perks aren’t worth another annual fee payment. Most cards are only worth it for the Signup Bonus. It’s free. If you don’t use the card afterward, it doesn’t matter. It’s all about the Signup Bonuses.



 7. Unlocking Signup Bonuses

I have mentioned unlocking the Signup Bonuses a few times, here’s what that’s all about. Almost every credit card with an interesting Signup Bonus will require you to spend a certain amount on the card in the first 3 months, to unlock the Signup Bonus. It’s inevitable, and rest assured, that’s the only requirement and it’s only in those first 3 months, then you’re done and can sock-drawer the card if you want, you’ve gotten your Signup Bonus and you don’t have to do anything else.

We will be sharing an article on how to easily reach the minimum spend in the coming weeks, but here are the basics.

Usually, the minimum spend is around $1,500, which should be pretty easy in three months. Even when ordering two cards at a time it’s doable for most people, you probably spend more than you think in a three month period. You can also time a larger purchase with your credit card application routine, you can ask friends if you can put their spend on your card or you can use this nifty trick.

Simply head to a store that sells a large assortment of gift cards for other retailers. Load up on the ones you’re certain you’ll use in the near future, and you’ll easily hit $1,500 without losing any value because gift cards don’t usually expire, and they no longer have any processing or purchase fees. You’re simply pre-paying your purchases to reach the minimum spend amount and unlock free travel rewards.

And be careful not to get refunds that would bring you back under your minimum spend amount, you’ll lose your Signup Bonus. If your card has an annual fee, it will be billed in your first three months but it does not count against your $1,500 spend, so make sure you take that into account because again, you’ll lose the Signup Bonus if you’re not careful. Last important tip: the three months often start on the day of your application, so make sure not to cut it too close, if you miss the deadline, you can’t get do anything about it. You can’t get the Signup Bonus back under any circumstances if you make a mistake so be careful.



8. Stop Being Scared Of Annual Fees

Most of the time, the best credit cards come with annual fees. Not getting a card by principle just because it has an annual fee is one of the most common beginner mistakes.

Just take the Marriott Bonvoy American Express Card as an example: it’s the best offer in Canada right now, it gives you up to 8 free nights in nice hotels (Marriott Category 1 hotels). Sure it has an annual fee of $120, but I can’t imagine anyone would value 4 free nights at anything less than $120 right?

So who cares if it has an annual fee, the Bonus is worth it. If the Signup Bonus was $100 for a card with a $120 annual fee, then, in that case, the annual fee isn’t worth it obviously. Use your judgment. And if you don’t feel like doing your homework, we’ll be analyzing every Signup Bonus in Canada and telling you which ones are worth it on our credit card ranking page.

And remember, if there aren’t any perks or value other than the Signup Bonus, you cancel the card in Month 11, before the second annual fee payment, and that’s it. Then you get a new card! Rinse and repeat.


9. Not All Cards Are Created Equal

They sure aren’t. There is a lot of options, and it’s very important to choose the best cards to maximize your rewards. For example, the American Express Cobalt and American Express Scotiabank Gold have “category bonuses” which give you extra points when making purchases in a certain category. So you need to balance the number of points a card will give you for your everyday purchases with the number of points the Signup Bonus gives you.

And not all Points and Miles are created equal too… Some points are worth more than others, some points are more useful for a certain type of traveler, etc.

We will also be covering that aspect in our future articles.

But in the meantime, if you’re beginning, you should definitely concentrate on the Signup Bonus, because as we said, that’s the most important and lucrative part. You can see our article about the best credit cards here.


10. Travel Hacking Credit Cards Have A Lot Of Perks

One of the best traveling tips is to pay for your plane tickets with a Travel Hacking credit card. It’s so easy, you’ll get $500 completely free for a hotel and meals when your flight is delayed for 4 hours or more.

It’s free and included with most Travel Hacking credit cards.

But there are plenty of other perks, like Baggage Delay Insurance (if you don’t pack light and you bring a checked bag, you know they will lose it) and Purchase Protection for longer product warranties.

If you have personal car insurance, you won’t ever have to pay a single cent for insurance when renting a car, because Travel Hacking credit cards have a free Loss/Collision Damage Waiver Insurance that covers you. That way you can rent cars for $19 a day (or even less) and stop paying for all the insurance products they try to get you to buy.

Some credit cards have other perks, like 14 days of free Travel Medical Insurance (TD Visa), unlimited VIP Lounge Access (AMEX Platinum) or even access to special VIP events (AMEX Cobalt and Platinum).


That Was Our Article About Earning Points…

Credit cards are great for the first part of Travel Hacking, the earning part. You might be shocked to hear that this was actually the easy part. Travel Hacking consists of two steps, Earning and Burning.

Burning, or using your points and miles, is another tricky subject, but we’ll gladly walk you through that with our advice and tips: don’t miss our next Travel Hacking articles.

But what you should know for now is that you should never use points or miles for anything other than travel. Your return will be infinitely lower if you buy other things, it’s just an all-around bad idea. If you don’t want to use points and miles on travel, don’t start Travel Hacking (that’s why there’s the word travel in there ?).


Now that you know all the rules, check out our ranking of the best credit cards for Travel Hacking.


Bottom Line

This is just the start of our section about Travel Hacking. Stay tuned for more information!

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Andrew D'Amours

Andrew is the co-founder of Flytrippers. He is passionate about traveling the world but also, as a former management consultant, about the travel industry itself. He shares his experiences to help you save money on travel. As a very cost-conscious traveler, he loves finding deals and getting free travel thanks to travel rewards points... to help him visit every country in the world (current count: 71/193 Countries, 47/50 US States & 9/10 Canadian Provinces).

This Post Has 2 Comments

  1. Krysta

    Thanks for providing all of this information! What an exciting new hobby! For the AMEX Cobalt card, would you cancel the card after spending $500/month over12 months or is this a card that should be kept open?

    1. Andrew D'Amours

      Hi Krysta 🙂 I would definitely keep it open because 5X the points on groceries is amazing (and with the transfer rate to Marriott, that’s 6 Marriott Points per dollar) and by buying gift cards at your grocery store, you’ll earn that rate on many other purchases. It adds up a lot quicker this way 🙂

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