If you read enough posts and comments across Facebook and other platforms, you start to notice several patterns. After seeing people make the same mistakes over and over again, I figured it was time to address these so that those just starting out can understand them and hopefully, avoid them. If you think I missed anything, let me know in our Facebook group.
These are in no particular order and there may be some overlap here, but I think it’s important to still break things down even if some of these could have been combined.
1. Not understanding the whole picture
This is a bit of a broad topic but I’ll narrow it down like this: someone will post something indicting that they understand that points will lead to free stuff but they really don’t understand how involved this is and what it will take to really put together some great free trips. They’ll say something like “I got X card, I put a ton of spending on it and I have Y number of points, now what?”. This is why I suggest people review all of the travel hacking courses before starting their travel hacking journey. The courses should not take you long to review but a lot of people just have some mental block that prevents them from reading everything. If you really want to achieve success at anything, you have to put the work in.
2. Not having a strategy
I might see this one more than any other. It often goes like this “I have a cash back card, an Amex card, two Chase cards and a Capital one card”. As a result, they have a random collection of points and they have no real path forward. Some of this is related to mistake number 1 but a lot of this is also because people fall for the hype you’ll see across social media and the internet. You’ll see so many people hyping every single card. What they don’t understand is that these people get money for every single card that people apply for. So much of their livelihood depends on a lot of people applying for a lot of different cards. Of course, not every single person is like this, but some of the most prominent voices out there are pushing all sorts of cards that most people don’t need.
When you have a strategy such as the Chase Trifecta, you’ll achieve greater success and you’ll find this easier to manage.
3. Going outside of Chase when you’re starting out
This is closely related to number 2. Some people just do not appreciate how good Chase is and the importance of the 5/24 rule. Maybe they don’t even know the 5/24 rule exists. Either way, it just makes no sense to go outside of Chase when you are under 5/24 unless you can articulate a reason why it makes sense. If you pay rent, then it is likely your biggest expense so getting a Bilt card when you are under 5/24 may make sense. Some might argue that you are better chasing SUBs to start but if you’re going to get business cards, you can get the Bilt card and the Chase Trifecta and you’ll still be under 5/24.
When you stick with Chase, you will accumulate a lot of Ultimate Rewards. That’ll make it much easier to use since you’re dealing with the same transfer partners. I’ve seen people with 120,000 Urs, 70,000 Amex points and a bunch of other points. Now they want to use them but the transfer partners don’t all overlaps. If that person wanted to stay at a really nice hotel, it’s probably not going to happen. If you that same person focused on Chase, they’d have over 200,000 UR’s. That’s enough for 5 nights at a 40,000 UR a night hotel.
Another benefit of sticking with Chase is that you can manage everything from one account. This makes it easier for newer people to manage everything.
4. Not having a plan for your points
I see a lot of people that accumulate a bunch of points only to ask later “what should I do with all of these points?”. I’m not suggesting that you shouldn’t ask for advice, but way too many people have no plan at all. There’s no specific goal that they are working towards. Even if your goals change, it’s still important to have one. If you were to ask my advice, I’d suggest starting with Hyatt. You’ll get the most value for your points. Getting 2 cents per point (cpp) is the benchmark with Hyatt and it’s pretty easy to reach. Once you get up to the more expensive hotels, you can usually get over 3cpp. There’s just no other hotel program that can compare to that.
Unfortunately, Hyatt isn’t everywhere but they are growing. If you have your heart set on a certain location and the only option is Marriott, then that’s fine. You should still know exactly how many points you’ll likely need. Now you have a goal and you know what you are working towards. I think that helps you focus since you can see the entire picture. This is helpful because you often need to book the nicer hotels way in advance. If you have a plan, you’ll know when you can start looking for award space.
5. Not being able to unlearn
Part of learning involves unlearning what you think you know. This is really tough for some people. Maybe it’s their ego not allowing them to admit that what they’ve been doing is wrong. Maybe its something else. Either way, it’s hard for some people to grasp that their cashback card needs to be dumped. They don’t understand that their airline card is not to be used. I’ve tried to counsel a lot of people that just don’t want to accept that the Chase Trifecta is a way better strategy than what they are using now. Heck, it’s tough to get some people to understand that the Chase Trifecta is a strategy. They just don’t want to break old habits but they still want to travel for free.
When you start out with travel hacking, you have to forget everything you think you know about credit cards, points, miles, etc. Start from scratch and only once you’ve got a good handle on all of this can you determine if your old cards should still be used. Chances are, they shouldn’t be used at all unless you happen to have a Chase Freedom card.
6. Not understanding that different points have different values
I’ll see a lot of people say they got a card because the SUB was 150,000 points or because they got 6x in a certain category. They think that this card is way better than anything the Chase Trifecta can provide. Unfortunately, what they don’t understand is that all points are not created equal. People hate math and the credit card companies know this. Thus, they’ll entice you with these big numbers knowing that a lot of people are not going to actually do the math.
Whether it’s a points currency like URs, hotel points or airline miles, they all have different values. See this article for more information. Simply put, you need to get those values first in order to do the math. Let’s assume that X points are worth 0.5 cents and Y points are worth 2 cents. A card that gives you 150,000 X points will yield a value of $750. A card that gives you 60,000 Y points will yield a value of $1,200 points. That is gonna surprise some people.
How do you figure that out? One cent is expressed as 0.01 so a half a cent would be expressesld as 0.005 and two cents would be expressed as 0.02. Now just take the number of points and multiply by the value of the points. So for the X card, it would be 150,000 x 0.005 = $750. Not too complicated once you know how to do the math. It’ll also help you avoid falling for those cards that you don’t really need. Once you benchmark everything against Chase, you won’t find too many non-Chase cards that are worth a 5/24 slot.
7. Getting the Amazon card
Let’s face it, most of us buy a lot of stuff from Amazon but how much of that stuff is really the expensive? I think for most people, it’s smaller items. But even if you buy a ton of stuff at Amazon and/or Wholefoods, does this really warrant a 5/24 slot? I don’t think it does. While Prime members can get 5x back on Amazon and Whole Foods purchases, that’s just cash back and not Ultimate Rewards. So that 5x is really just 5 cents and it will always just be 5 cents. Ultimate Rewards on the other hand are worth 2 cents at least, sometimes more. So if you earn 3x back it’s really 3 x 0.02 which equals 6 cents. If you really buy that much at Amazon, you can buy gift cards from Amazon and load up your account to easily earn 3x or more.
Remember, if it’s too easy, it’s probably not worth it and this is definitely one of those cards where it’s not worth it. But it’s simple to understand and easy to use so a lot of people fall into this trap.
8. Trying to max out categories that aren’t that important
Some newer people get way into this hobby too fast. They feel like they need to max out every single category. As much as I love Chase, there are definitely some holes in the program such as gas and groceries. This causes some people to seek out other cards so that they can get a higher earning rate on those categories. What they fail to understand is that their spending in those categories is not likely to really move the needle. Since this will require you to go outside of Chase, you’ll be using up a 5/24 slot and you’ll have a different points currency. As discussed before, having your points scattered in different places can make it more difficult to use them.
You don’t have to maximize every last dollar when you are just starting out. Eventually when you move beyond Chase, you can have different cards for almost every category if you would like.
9. Being scared of business cards
I don’t know what it is about this topic but it really scares a lot of people. As we addressed in this article, do not be scared of business cards. I think a lot of this boils down to people not understanding how the IRS really works and/or how our criminal justice system really works. The IRS and FBI are not going to kick down your door because of your credit cards. The IRS cares about whether your taxes are accurate. A credit card has nothing to do with your taxes. If you don’t believe me, talk to a lawyer or an accountant. The bar for what constitutes a business is very, very low. Business cards are one of the absolute best ways to earn free travel. The Chase Ink Business Cash card is one of the best cards you can possibly get since you can earn 5x by buying gift cards at office supply stores. They also have massive SUBs and they don’t count towards your 5/24 status (although you have to be under 5/24 to get one).
10. Going above 5/24 before you are done with Chase
There reaches a time in every travel hacker’s life when it is time to give Chase a break. After all, there’s a lot more out there if you want to take your hobby to the next level. Of course, there’s nothing wrong with just sticking with Chase. Regardless, actually getting to 5/24 should be avoided unless you have timed this out where it will only be temporary.
I’ve seen way too many people get to 5/24 and then realize that they now want to apply for Chase business cards. At that point, it’s too late. Even if you have no interest in business cards for some reason, you really want to be careful with your 5/24 status since you never know when a new offer will come out. What if Chase comes out with some new amazing card one day? What if there’s an amazing new SUB on a card you don’t have yet that’s only available for a limited time? What if you change your mind about business cards? In any of those scenarios, you’ll be wishing that you didn’t hit 5/24 so soon.
Bonus – thinking there’s one magic card
I debated whether to include this since it’s not really a mistake but instead, a bad way of thinking about travel hacking. So, I just made it a bonus topic because it is important to address either way. I see this all the time “I want to travel for free on points, what card (emphasis on the singular card and not cards) should I get?”. This is a very common question and quite often these people are very upset to learn that there is no such card. What separates travel hackers from 99% of the population is that we put the work in. We develop a strategy. We learn and then we learn and then we learn some more. We always look to improve to get the maximum amount of points so that we can get even more travel for free.
Conclusion
I’m all about learning from mistakes but I think its even better to learn from other people’s mistakes so you don’t make them in the first place. If you’re just starting out, you can avoid these mistakes by reading all of the travel hacking courses and asking questions in our Facebook group. Were here to help!