Everyone wants to know the cheapest way to travel. I posted this on Twitter the other day and got a strong response pressing for more information on the cheapest way to travel.
Here is the Tweet:
— ThisIsTrouble[Kyle] (@TruthfulTrouble) December 31, 2015
By now you’re probably wondering – how the hell did I manage to do this?
I’ve talked about the cheapest way to travel previously, in this post and this podcast, but I think the cheapest way to travel is a complex enough subject that it’s going to require actual words on paper that people can use as notes, rather than listening to me just throw terms out there on the podcast.
So – this is a long post, but well worth it.
Let’s start by breaking these down. What are your current expenses in life? In my case, I’m paying $2,000+ a month for my rent alone. That is a sunk cost – money I will gain nothing from, and will never get back.
Sure, I avoid the pitfalls of home ownership (having to repair stuff yourself, a mortgage, etc.) and I have freedom to up and move whenever I desire – but it’s still money going nowhere but to someone else’s bank account.
In addition to that, I spend at least another $700-$1,000 a month on groceries, gym membership, going out occasionally, travel, and all the other expenses that life throws my way.
Before we continue any further, I want you to sit down right now, open up a Word document or grab a sticky note – and estimate your own expenses. Write it down or type it up.
Go to CreditKarma.com, and create an account. Put in your SSN and other miscellaneous information, and you’ll have your credit score in less than two minutes.
Write it down, too.
Do you want to buy a new house or a car in the next two to three years? If so, write it down in the Word document. Write down specifically what you want and when you hope to purchase it.
If you don’t have any plans along these lines, leave it blank.
Now, if I told you that every month I obtain $500+ (that’s on the low side, it’s often $800) of free travel just by putting my rent on a credit card, is that something you’d be interested in?
If so, read on.
But, a disclaimer is necessary: I am not a financial expert. Do not take my advice and blame me if you run your credit to the bones. I have played this game for a year now with wild success and has set me up very well to travel for barely anything for the next several years. There are many other more detailed resources that I will link below as well.
It’s very, very simple.
I open credit cards that have good sign up bonuses for meeting a minimum spend; usually those minimum spends fall somewhere at 1k/2k/3k/5k thresholds. When I meet the minimum spend on those cards, I collect the sign up bonus, which have been worth anywhere from $500 to over $1,000 for the eight cards I’ve opened this year.
For the record, those cards are:
US Airways Dividend Mastercard (50k) – no longer available
Barclays Arrival+ ($400 statement)
IHG Rewards (60k points)
Hilton Citi Reserve (2 free nights)
Citi AA (50k)
Citi AA Exec (75k)
Citi Prestige (50k)
Citi Premier (50k)
Starwood AMEX (25k)
For the record, none of those links are affiliates.
I pay my rent on my credit card. It is that easy. I use a site called Radpad; they do charge a percentage fee, and it’s varied this year from 2.25% to 3%. For a $2,000 rent check, it comes out to be roughly $60 bucks a month.
But if that’s the cost to obtain nearly free travel, that’s a price I’m more than willing to pay. To top it off, I also don’t have to worry about writing a check and getting it into the rent deposit box on the first of every month. When I get a new card, I swap the rent payment method on the Radpad site and they take care of the rest. The convenience factor is just a bonus on top of the free travel.
Look at the screenshot I posted above from Twitter. That ticket is real, and I’m happy to provide further proof if requested.
I need to get to Krakow from Dallas on March 28th. At the time of writing this, that flight is $1,779. I paid $93.20
And on top of that, it has to connect through Chicago and Warsaw. It should also be noted: that’s only one way.
As you can see above, I opened a couple of American Airlines (AA) cards earlier this year. I netted 50k AA points for the Citi AA card and another 75k for the AA Exec. On top of that, US Airways merged into American – the 50k points from that card transferred over, too.
Prior to booking this flight I was sitting on a nice stash of 196k AA miles, and that’s after I used 25k to fly first class from NYC to LA in November.
The flight to Europe, from Dallas to Krakow (with only one connection in London) was all of 20,000 of those miles. Plus $93 in taxes because the UK is greedy. If I didn’t have to transit through London Heathrow (one of only 3 places in Europe with direct flights to Krakow), the taxes would have been only $5.60.
Five dollars for an EIGHTEEN HUNDRED dollar flight.
Of course, there is the value of the miles! If you want to do the “math” on what those miles are worth, just divide the number of miles by the ticket price. In this case:
20,000/$1,779 = .08895
In the case of miles, we’re dealing in thousands – we’d move the decimal places two points to the right and come out with 8.89, but let’s go ahead and just round that to 8.9.
This is the “value” of my redemption in terms of a monetary price per mile; the formula being:
Ticket Cost / Number of miles redeemed
Basically, my American Airline miles were used at a value of 8.9 cents each.
But what is an AA mile worth?
That depends on your opinion, as they’re a constantly fluctuating currency based off of latest news, flight availability, and more. They are truly a stock. There are sites that have monthly valuations of all airline currencies and they’re worth. Here is one, and here is another.
The overall consensus is that right now, AA miles are worth roughly 1.8 cents each.
This means that my redemption at 8.9 cents is very, very good. On top of that – I never would have paid for that coach seat. That is an absurd price. I’m interested in the cheapest way to travel, not get ripped off by airlines. I flew round trip to Budapest last year for only $700 round trip. I never would have paid that price, but because of airport availability (Krakow is not a big place) and the somewhat last minute nature, these are the cards I was dealt.
I’m offering free advice in this thread for anyone who wants it.
Take all that information in the Word document, and paste it in the comments below. If you don’t want to give your credit score, give a range (i.e. 600-700, 700-800, etc).
Add in one other thing: where you’d like to travel to. Make it a high aspiration. Want to spend two weeks in Rome? Cool. Stay in an overwater bungalow in the Maldives? Yeah, who wouldn’t?
Just look at this:
I am going to respond to every single comment in this thread, and show you how you could do the trip at a fraction of the list price. I’ll give you miles cost, show how I searched for it, the cards I’d consider, etc.
All you have to do is provide:
Seriously, it’s that simple.
I’m giving the free advice because travel has done wonders for me as a person, and everyone should have that opportunity.
As I transition to the next part of my life – away from the corporate world and towards a more nomadic lifestyle, you can expect a lot more posts along these lines.
Leave a comment below with your travel goals, and let’s see what we can do.