Although it may seem counterintuitive, credit cards are a huge part of the way we survive as budget backpackers. Many years ago, I was introduced to the concept of “travel hacking”, which is basically signing up for credit cards that give you airline, hotel, or travel points. Most of the points come as sign-up bonuses for spending a certain amount, but I also accrue points by earning 1-5 points per dollar spent in my daily life.
Depending on the card, the points can be transferred to airlines or hotel chains or used to book within the credit card’s portal, for example, American Express or Chase. Some people get really into the travel hacking game and churn through credit cards and do all sorts of things to leverage their points, but for me, my strategy is simple. I don’t spend money unless I’m getting points for it.
I apply for new credit cards when I’m anticipating big purchases, which will help me hit the minimum spend and earn the sign-up bonuses of 40,000-100,000 points. Joe and I have signed up for credit cards in the US and Australia that earn us points, and because of our Qantas cards in Australia, we were able to do a whirlwind tour of every state and territory in Australia and not pay a penny for flights.
In addition to points, many credit cards marketed toward travellers provide additional benefits that come in handy at home and on the road. The main credit card I use in life but especially for travel is the Chase Sapphire Reserve card. In my opinion it is the best credit card for travel within the US and abroad as there are no foreign transaction fees (these can add another 3% or so onto your credit card transactions), there is a $300 yearly travel credit, and you get complimentary Priority Pass membership, which allows you and a guest access to thousands of airport lounges worldwide. The Reserve also gives you complimentary enrollment into Global Entry or TSA PreCheck but I have never been in the States long enough to get enrolled. There is a $450 annual fee for the card but the $300 travel credit and the $429+ value of the Priority Pass membership cancel out the annual fee for me. I used my $300 travel statement credit in the first month or so of my trip but that was $300 worth of flights, hotels, AirBnBs, and Ubers for which I was reimbursed.
Joe and I also use the shit out of my Priority Pass membership. We usually end up in a lounge every time we fly, and being the budget backpackers we are, we use the lounges to their fullest extent. We hit up the buffet, drink the free booze, charge our devices, and use their wifi. And if there’s a massage chair you know I’m posting up in it. Some of the lounges have dress codes and it always makes me laugh when Joe and I break out the nicest attire in our backpacks to get into a lounge and make them regret they let us in.
The Chase Sapphire Reserve also comes with many travel-specific perks such as rental car insurance and trip cancellation or baggage loss insurance. And, of course, the card offers sign up bonuses of Chase’s Ultimate Rewards points after hitting the minimum spend.
When I signed up for the Sapphire Reserve, the welcome offer was 100,000 points, which could be spent on flights, hotels, rental cars, or shopping. Those points have been enough for me to fly back and forth to Australia several times as well as pay for some of our flights and hotels during our RTW trip.
If the $450 annual fee seems a bit high, Chase also offers cards with amazing travel benefits but lower annual fees, such as the Chase Sapphire Preferred. If you do any travel at all I would definitely make sure the card you use does not charge foreign transaction fees at the very least, and investigate travel credit cards that can earn you points for the spending you are already doing or provide additional travel benefits and protections on the road.