Thanks to well-timed credit card promotions, that all changes this year. For the next 20 months, our family of three will be flying for free (or very close to it). Here's how we became travel hackers.
It's All About the Points
Southwest Airlines (LUV) offers a frequent traveler program that allows qualified members to bring a companion on any flight flight, free of charge. To obtain this Companion Pass status, a traveler must either fly 100 qualified one-way flights or earn 110,000 points in its loyalty program within a calendar year. After reaching either quota, the status is active through the current year and the entire following calendar year.
We went for points. At the end of last year, Southwest ran a introductory promo for its personal and business cards (with annual fees ranging from $69 to $99) which offered 50,000 points for spending $2,000 in the first three months. I applied for a personal card in November and a business card in January. We put all of our day-to-day expenses on the first card until we crossed the $2,000 hurdle in January, at which point we started using our second card exclusively, always making sure to pay off the balance each month. Remember: No credit card promotion -- no matter how good -- is worth going into debt for.
Those 110,000 points we earned to qualify for companion status should cover the cost of at least five round trips for me, plus any additional points we'll earn through regular spending over the next year. Our daughter, now 16 months old, flies free for another eight months as a lap child, after which we'll use points that my wife accrued by getting a card during the promotion.
The Southwest promotion associated with opening new credit cards is no longer running, but it does pop back up fairly regularly. And there are plenty of other ways to land free flights. Each airline has its own credit cards and loyalty reward systems. Or if you'd rather not be tied to a specific airline, the Barclaycard (BCS) Arrival World Mastercard and Chase (JPM) Sapphire Preferred also offer great introductory promotions for rewards that can be used toward any travel purchase. The trick is to find promotions that cost little (in the way of annual fees and minimum spends) while netting the largest amount of points or miles. And if the deal includes status upgrades like priority seating, lounge access or companion passes, all the better.
While we're big believers in getting the most out of travel rewards, we'd be remiss if we didn't emphasize two cardinal rules when it comes to credit cards. One: Don't spend more money for the sake of any promotion. Two: Pay off your credit card balance in full every month. Follow those bits of advice, and the sky's the limit -- or whatever cruising altitude your free ticket affords.
Joanna and Johnny are the writing duo behind OurFreakingBudget.com, a personal finance site documenting the joys, pains and realities of living on a budget.