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- Reflection No. 16
Happy New Year everyone! I hope your 2024 holiday season was full of joy and relaxation. Welcome to 2025!
In the month of January I’m sharing a little secret: you can travel responsibly without jeopardizing your finances. And lucky for you, Reasoned Reflections is going to uncover all the tips and tricks to mastering travel hacking this month. I hope you enjoy!
TODAY ON REASONED REFLECTIONS:
Personal finance articles 💰;
My favorite travel card;
Reflection No. 16 — Credit card churning;
Quote of the Reflection.
Personal Finance Articles 💰
Time for a bit of R&R
My Take - KISS—Keep It Simple, Stupid—is some of the best advice when it comes to investing. Low-cost index funds may not sound flashy, but they’re proven performers over the long haul. Sometimes, the simplest approach is the smartest one!
My Take - You might be surprised by how many things can qualify you for a business credit card—you don’t need a fancy entity to get started (though setting one up for liability protection might be worth considering down the road). Adding a business card to your travel hacking toolkit can unlock even more rewards and perks.
Membership Rewards v. Ultimate Rewards
My Take - Both rewards programs have their advantages, and with great transfer partners on both sides, you really can’t go wrong. That said, I find the Ultimate Rewards interface to be a bit more intuitive!
Retirement rules becoming dated
My Take - Determining how much you can comfortably withdraw from your accounts in retirement is tricky—it’ll vary for everyone. One thing I do believe? The traditional 60/40 stock-to-bond split feels outdated. With a solid nest egg, many retirees may benefit from taking on a bit more risk in their portfolio diversification to maximize growth potential.
My Take - The real magic in the travel points game lies in mastering transfer deals. To take your travel to the next level, you need to know which partners offer the best value, when it’s the right time to transfer, and how to calculate the true value of your points.
My Favorite Travel Card
Ready to take your travel game to the next level? One of my go-to travel cards is the Chase Sapphire Preferred! Right now, Chase is offering a 60,000 point welcome bonus worth up to $750 (when booking trips through the Chase travel portal) after spending $4,000 in the first three months. Don’t miss out—grab this deal while it lasts!*
*This section includes a referral link to the CSP card that will reward me if you use the link, apply for the card, and get approved.
Reflection No. 16: Credit Card Churning
I - Issue: What’s credit card churning?
R - Rule: Credit card churning is a way for you to quickly rack up travel miles and points. It involves opening a new credit card that has a nice sign up bonus (preferably an increased offer), meeting the minimum spend requirement to earn the bonus, and closing the card before the next annual fee hits.
A - Analysis: I know talking about credit cards goes against a lot of financial advice out there. However, if you can resist overspending and pay the statement balance in full each month, credit cards can be a valuable part of your personal finance journey. Plus, there is a ton of personal value in creating memories. Credit card churning and travel hacking is one way I can create travel memories without breaking the bank.
Again, here’s how it works: open a card with a juicy sign-up bonus, meet the minimum spend, and cancel before you’re hit with the annual fee. You can rack up a lot of credit card points this way for hotels, flights, and more. To level up your churn there are three strategies I’m going to share with you: two-player mode, leveraging business cards, and manufactured spending.
Two player mode
Two player mode is exactly as it sounds. Two people—like spouses, significant others, or maybe even travel buddies—team up to double their point haul. Here is how two player mode works:
Person A signs up for a card with a great bonus, hits the spending requirement, and earns the points.
Person A then refers Person B to the same card. Person B signs up, meets the spending requirement, and earns the bonus points.
Bonus: Person A also gets a referral bonus for bringing Person B on board.
Two player mode definitely accelerates your earning power, but keep in mind that you both will need to meet the spend requirement.
Personal and business cards
Do you have a side hustle? Whether you’re tutoring, consulting, or running an Etsy shop, you can apply for a business credit card. Business cards open up even more opportunities to earn bonus points!
Something to keep in mind, though, is business cards will typically have higher spending requirements, and the card should only be used on business—rather than personal—expenses. A business card can dramatically increase your point accumulation if you have enough business spend to meet the spend.
Manufactured spending
What if you spot an irresistible sign-up bonus but the spending requirement seems out of reach? Generally speaking, you shouldn’t apply for that card, but let me introduce you to manufactured spending—a way to “manufacture” purchases to hit that threshold.
One popular method is buying gift cards for stores you already shop at. You are essentially prepaying for your future expenses. You do need to be aware of any activation fees on the gift cards as those extra costs can add up. Also, some stores only allow you to purchase gift cards with cash, so keep that in mind, too.
Another option is funding a new checking account with your credit card. This option can help you meet the spend requirement quickly. Be cautious, however, if you’re thinking about funding a checking account with your credit card—some issuers treat it as a cash advance which comes with additional fees. Make sure to check beforehand to avoid any unpleasant surprises!
C - Conclusion: Credit card churning can help you rack up points and miles quickly, turning dream vacations into reality without blowing your budget. But it’s not for everyone. The key is discipline: avoid overspending, pay your balance in full each month, and only churn cards when it aligns with your financial goals.
Time to Reflect…
When I first heard about travel hacking and credit card churning over seven years ago, I was skeptical. It sounded too good to be true, and I’d heard plenty of horror stories about people getting into trouble with credit cards. But after some careful thought, I decided to give it a shot—under one condition: I would only apply for a card if I was confident I could meet the spending requirement through my typical monthly expenses, like groceries, gas, and insurance.
Travel hacking done responsibly has helped my wife and me travel to some pretty cool places.
Quote of the Reflection
“Oh the places you’ll go.”
-Dr. Seuss
Thanks for reading! That’s all for today, but if you enjoyed this Reflection, the best thing you can do for me is to share it with those in your network. Referrals mean the world to me! 😀