Travel Hacks: This Is How You Do It
Several times a day, one of my social media accounts or instant messaging apps pings or dings with a message asking a travel question that usually goes something like this:
Hey!! Long time, no talk. I’ve got a bunch of different credit cards. How can I use them to get a cheap vacation next month?
The message might be a bit different or it might say they have points with several different airlines or hotel brands, but the content is usually along those lines.
I’ve earned a bunch of points and miles and now I don’t know how to use (burn) them.
That approach to travel hacking is similar to shooting a bunch of arrows up in the air, then grabbing a target and running around trying to catch them in the bull’s-eye. You’ll be very busy, but you’ll probably end up tired, frustrated and possibly punctured and deflated.
No biggie. We can fix this. Let’s start as simply as possible. Where do you want to go? A lot of TravelZork readers want to go somewhere where they can gamble. In the United States, that means Vegas, Connecticut, Atlantic City, Biloxi and numerous other places. Let’s use Connecticut for our example. There are two excellent tribal resort style casinos Mohegan Sun and Foxwoods and they are both reachable from several good airports (including Hartford, Airport Code : BDL) that have jet service. Now we’ve got a destination, a goal. Without a goal, there is no good reason to try and EARN any miles and points. You’d be much better off focusing on cash-back cards and putting the money in your pocket. In short:
Identify Travel Goal -> Earn
Miles and Points are a lousy long-term investment. Their value is determined solely by the Credit Card, Airline and Hotel companies that issue them. Overnight they can be devalued faster than a Zimbabwe dollar, Penny Stock, Dutch Tulip or Beanie Baby. Here’s a good example. On March 31st Alaska Airlines’ Mileage Plan (one of my favorite in terms of overall value) announced that starting immediately First Class Awards on Emirates from the US to Dubai would jump from 180,000 miles to 360,000 miles. Boom!! Instant 50% devaluation. Anyone who had miles in the bank with Alaska with the goal of taking that world-class trip on Emirates in a First Class Suite on an Airbus A380 was out of luck, instantly.
OK, back to our trip to the Connecticut Casinos. This is where we want to go. We have a goal. Now we can start earning miles and points to get us there, and we’ll earn only those miles that will make it possible. We’ll earn them and then we’ll burn them. No Beanie Baby miles for us.
Identify Travel Goal -> Earn -> Burn
We’re going to use a west coast point of departure (Seattle, Airport Code : SEA) for our example. I’ll be looking for a round trip ticket, with no more than one stop and I’d like to go First Class because it’s a long flight and my joints and muscles need the extra room. (OK, the free drinks and better food are good too.) I use several different airfare sites to look for the best deals on airfares and hotels including kayak, momondo and Google flights. (Also be sure to check out : Airline “Mistake fares?” | How do I find them?) Based on my requirements Kayak returns a cost of $1112 – 1169 for SEA-BDL via DTW in First Class on real airplanes, not regional jets. (Interesting data point – A Coach / Economy Ticket with United runs about $650, Delta is $709. So first class is ~61-75% premium in dollars.)
Delta and SkyTeam is an airline alliance I’m very familiar with. I’ve flown more than 3 million miles with them, so I’m up to speed on what to expect on a Delta flight. I think I can reach into the snack basket barehanded and name the goody by its size, shape and location. Hopping over to the Delta site, I’m going to look up award flights to closely match the one shown above. The shortest flight I could find was SEA-DTW-BDL, it’s on real airplanes and can be had for 53,000 miles in Coach or 82,500 miles in First Class. That’s only about a 56% premium FC over Coach. There’s also $11.20 in fees to pay, which is less than the cost of a double Woodford or Vodka if you choose Coach.
Are we getting decent value for the miles we are going to burn? As of May 1, 2016 I’m seeing valuations of about 1.2 cents per Delta SkyMile. Doing the math we get:
$1145 (average $ per FC seat) divided by 82,500 = 1.38 cents. That’s a good deal as it’s above the 1.2 cents previously mentioned.
Now, if we were starting from a clean sheet of paper, we’d have to come up with a way to earn those miles unless we were going to bite the bullet, plunk down the plastic and buy the ticket outright. And we’re not going to do that. So let’s assume we have no miles or points in the bank and we need to earn 82,500 of them in a hurry. The very best miles/points currency right now comes from American Express, in the form of Membership Rewards Points and Chase Ultimate Rewards Points. The American Express Sapphire Preferred Guest Card comes in right behind, so any of those choices are a good place to start.
As of May 13, 2016 the very best deal out there is to get the American Express / Mercedes Benz Platinum Card. We can earn a quick 75,000 Membership Rewards (MR) Points.
- 75,000 MR points after you make $3K in purchases in the first 3 months
- $200 annual airline fee credit
- Access to Delta SkyClubs
- Priority Pass Select membership
- $100 Global Entry fee credit
- TSA Pre-Check fee credit option
- Hilton HHonors Gold Status enrollment
- Starwood Preferred Guest Gold Status enrollment
- Access to American Express Centurion Lounges
- Access AMEX Fine Hotels and Resorts with a 2X MR bonus on travel
- Access to Boingo Wi-fi hotspots
If you’re a Mercedes-Benz owner or prospective owner there are additional benefits:
- $100 certificate for the purchase of MB accessories
- $1000 certificate towards the lease or purchase of a new MB after charging $5K in one year
This card has a $475 per year fee but the benefits offset the cost quite nicely.
After we make the first $3,000 in purchases we will have a total of 78,000 Membership Rewards points in our account, leaving us just 4,500 short of the 82,500 needed for our ticket. You’ll actually need 83,000 points as Membership Rewards points must be transferred in 1K increments. There’s several simple ways we can make up that difference. I’ll list a few of them:
- Channel all spend through the AMEX MB Card (You can use it to pay many of your monthly bills like cellphone, cable, satellite TV, some utilities. It adds up quickly.)
- Buy some AMEX Gift Cards. Right now, there is no fee to buy the cards. You get the points right away and you can spend them with the majority of vendors that take AMEX.
- Refer a friend to apply for an AMEX card. Once you get yours, a quick search for “Referral Bonus” on the AMEX site will provide a link that will earn you 10K points for each referral that signs up and qualifies for the card.
- Buy SkyMiles from Delta. Don’t do this. It’s a terrible deal. They charge 3.5 cents per mile that you’re going to cash in for about 1.4 cents.
Once you have the MR points in your account, it’s a fairly straightforward transaction to move them over to your Delta SkyMiles account and cash them in for your First Class Ticket.
Once you arrive at Bradley Airport just north of Hartford, CT it’s a 40 minute ride to the Mohegan Sun or Foxwoods. So we did it. We started with nothing, created a travel goal, earned the miles/points and burned them wisely.
Keep this strategy in mind and you will rarely, if ever, get burned while you Travel Hack!