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What I Used To Do
Back in 2009, I took my first trip abroad to Spain to attend a study abroad program. I was more than excited to go to a foreign country to improve my Spanish, eat new kinds of food and make new friends.
The one thing they don’t mention is the cost, especially the price of an airplane ticket. At the time, I didn’t even think twice about finding the funds to pay for my escape. I was young and wanted to experience a different lifestyle other than my own.
After searching multiple airline websites, the best deal I could find was on kayak.com for around $1,200. While I don’t regret going on the trip in the least, the thing I regret the most is how much I paid for that airline ticket when I know that I could have gotten a much better deal.
Use Credit Cards to Get Frequent Flyer Miles
Fortunately, there is a way to get a huge discount on any plane ticket thanks to the use of credit cards. Credit card companies offer many incentives or perks in order to attract new customers. One of those bonuses often includes a large sign-up bonus.
Let’s first take a look at a great example.
Right now the Barclaycard Arrival Plus™ World Elite MasterCard® is offering a bonus of 40,000 travel points after spending $3000 within the first 3 months of opening an account. These points can be redeemed for up to $400 toward your next travel purchase.
Here’s a quick glance at the card:
- After spending $3,000 in the first 90 days of opening an account receive 40,000 miles in points
- Earn 2X miles on all purchases
- The card has an installed chip which makes it easier for purchases abroad and at home
- Points can be redeemed for anything related to travel – hotel, flights, rent-a-car, etc.
- Redeeming your miles for travel credit gives you an extra 10% on miles redeemed
- No foreign transaction fees
- Free online FICO® Credit Score
This means that just by using the card as we would for purchases that we would normally make, we receive a free $400 toward travel, for any airline. Furthermore, since you earn 2x miles on all purchases, after spending your $3,000 you will receive an additional $60 dollars (6,000 points) toward your purchase.
All you have to do is spend $1,000 per month for the next three months and use this credit card at the time of purchasing a plane ticket.
There are many offers available aside from this Barclay’s Card. Depending on the credit card, you may not be able to use the points you receive toward any airline company.
Here’s a receipt from when I took a flight to New York from Spokane back in March. Thanks to the 50,000 mile sign-up bonus from Southwest (no longer available), I was able to reduce my plane ticket down to a mere $10. For this, however, I could only use the points toward Southwest flights.
Not only did this flight cost me a meager $10.00, but I still roughly have 23,000 points left. This is almost enough to make another round-trip flight across the country and back.
What’s the Catch?
Credit card companies wouldn’t offer you such great rewards if they weren’t getting anything out of it.
Credit card companies hope to earn interest off of your late fees, balance transfers and cash advances. They’ll pretty much do anything they can to get their hands on a little bit of your money. Make sure to pay all of your payments on time and don’t go into debt and there shouldn’t be any problem.
Furthermore, credit cards will charge an annual fee in order to compensate for the miles rewarded. For example, the Barclay’s Card that we just mentioned above has an annual card fee of $89, and most other cards will do the same.
While it may seem like the annual fee is a deal breaker since you have to pay them every year, try to reconsider. Most of the time the annual fee is waived for the first year. If you find out that you have to pay, there are ways to get your credit card annual fee waived.
I Can’t Spend the Minimum Requirement to Get My Bonus. What Do I Do?
If you’re a frugal spender like me, you may find it difficult to meet the minimum spending requirement in order to get your credit card bonus. The Barclay’s Card, for example, requires you to spend $3,000 in three months to get the 40,000 bonus points. Fortunately, there are many ways to work around this. I recommend two main methods.
1. Amazon Payments
Amazon Payments is a cash-transfer service similar to PayPal that is used to process transactions online. One option on the Amazon Payments website is sending cash as a “gift.” Amazon allows you to send up to a maximum of $1,000 to another person per month using your credit card.
With this in mind, if we can’t meet our minimum spending requirement of $3,000 in 3 months, simply transfer the rest via Amazon Payments to a family or friend and have them pay you back. There is absolutely no fee for doing this.
Please use this method with caution. Amazon may find it suspicious that you are continually sending $1,000 every month to the same person, especially if it’s getting sent back to your account. Once the recipient receives your cash, make sure to have them send it back to you through other means.
Furthermore, if you send over a certain amount of money as a gift in a calendar year (around $10,000), you may be taxed on that money. Please only use this method if you absolutely need to.
2. Purchase Gift Cards
If Amazon Payments is not an option for you, the best way that I have found is to purchase gift cards with my credit card.
The best deal that I am currently aware of is the American Express Gift Card which can be used on all purchases that accept American Express. There’s no fees for keeping the card, your card is refundable if lost or stolen, funds do not expire and you can use membership rewards points to pay for it.
The processing fee for the cards is also one of the lowest at a one-time fee of $3.95, so make sure that you purchase cards with high amounts so you don’t continually pay this amount.
You can even get a 1% discount on this gift card by purchasing it through a cash back website called Extrabux.
When you sign-up for an Extrabux account, search for American Express Gift Cards. Click the link on their site and you’ll be automatically redirected to the gift card purchasing page. Make the purchase, and within a couple of days money will be rewarded into your account. There’s even a special right now, where you are granted $5 just for signing up.
Calculate The Total
Again taking the Barclay’s credit card as an example, let’s say we purchase two American Express Gift Cards at $500 each. Our total processing fee is going to equal $3.95 x 2 = $7.90.
We are going to receive a 1% discount from Extrabux which is $1,007.90 x .01 = $10.07. We also gain another $5 for signing-up with Extrabux, so we actually get $10.07 + $5.00 = $15.07.
Subtract our processing fee of $7.90 from our discount of $15.07 and we’re actually making a small profit of around $8 dollars.
All-in-all, we have 2 $500 American Express Gift Cards, an extra $8 dollars and our 46,000 travel points through Barclay’s.
So I Can Just Apply For A Million Credit Cards and Never Pay For Flights Again?
Essentially, Yes. Do I recommend this? No, and here’s why.
Applying for too many credit cards can ultimately damage your credit score.
Each time a new card is activated, your score may be dropped by a few points. When you start using your card and make all of your payments on time, your score will slowly start to rise. The downfall comes in when your card is inactive for too long or is not making payments. This is where your score might fall.
Let’s say you have 20 credit cards that you applied for within a year. In order to keep your credit score from falling, you have to keep using the cards every so often for the next few years until they expire. Keeping track of 20 credit cards may be a tad tedious.
Additionally, the three major credit bureaus (Experian, Trans Union, and Equifax) will see that you have a significant amount of accounts opening, only further hurting your score.
Canceling your card is also not an effective option, as it will only damage your credit score.lowers your score. I personally recommend only applying for 4-5 cards a year at most.
How Do I Find Out About These Credit Card Deals?
There’s currently a large array of credit cards that you can apply for, and many of them have great bonuses.
All of my domestic flights this year have been paid for. Of course, depending on the amount of flights that you take and how far you travel, this may not be the case. I earn about 100,000 – 200,000 points alone per year just by signing up for 3-4 credit cards annually.
A site solely dedicated to great credit card deals is millionmilesecrets.
Sign-up For Rewards Programs
Almost every major airline has a rewards program which you can apply for. Simply put, each time you purchase a flight you earn points through the appropriate airline company. These points can then be redeemed for discounts off of your next flight.
After making 100,000 miles in purchases through Southwest, you’re granted a free companion pass, allowing you to take an extra passenger on your next flight at no extra cost.
When you purchase your next flight, not only can you get cash back from your credit card, but you’ll also be raking in points through your airline’s rewards program.
Use the Best Sites For Finding Deals
Even though we can usually get our entire flights covered through credit card bonuses, we want to do our best to make them stretch for as long as possible. We can do this by finding great deals.
The website that I recommend most for finding discounted flights is kayak.com. Kayak takes comparisons of prices from multiple travel sites and places them on one page.
A few others I would recommend for any flight are Google Flights, SkyScanner and AirfareWatchDog. Of course there are many websites similar to these, so it’s best to check as many as you can before making a final purchase.
Once you find a flight on one of these flight search engines, don’t book your ticket right away. Check what airline has the best price and go to that airline company’s homepage. Check first for specials on their websites as well as what the price would be for your flight.
Delta currently has a special on flights to Latin America and the Caribbean.
For domestic flights around Europe, I recommend Ryanair. In the past, I’ve taken flights from Spain to Portugal for as low as 5 euros. It looks like prices like this don’t exist anymore, but you can still find great deals.
You can also again look to Extrabux for a chance to get a little bit of cash back. By purchasing a Southwest ticket through Extrabux, you may be eligible for a 2% discount off of your flight ticket.
If you’re paying even close to full-price for airline tickets, start looking for credit card sign-up bonuses. Further drive down that price and save your miles by using rewards programs and looking for specials.
If you have any other suggestions on how to save money on flights, feel free to let us know in the comments below.