Is you DON’T talk about travel hacking.
Just kidding 😀
I actually wanted to write about my experiences with credit card companies while travel hacking.
One of the first things I noticed is the system is designed to get you addicted to the card. After spending my first purchase I got a miles bonus immediately credited to my account. After spending the minimum I got upgraded to a premium card. I can definitely understand why the rewards system would get a lot of people. It’s almost designed like a casino game where the lights flash and make loud noises when you win. The real world doesn’t have a lot of positive reinforcement and it’s rare to be rewarded for your actions as an adult.
The credit card system is based on getting people to overspend and get themselves into a bad financial situation. The credit card company is maximizing its profit when you all your money on a card and have to pay it back with 15-20% interest that’s capitalized every month.
The system is not in favor of the consumer.
I realized that I spent a lot more money than I usually would because I was working toward a goal. Instead of spending $1,000 over 3 months, I spent the limit in 1 month. I charged clothes and fancy lunches in Midtown because at least it was going toward my travel fund. It was unexpected how easy it was to waste the money on things I didn’t need. I’m still not sure what I spent the money on to be honest.
Another thing you might already know is that credit card companies are shady.
The card that I signed up for wouldn’t post my transactions instantly. It would take about a week for the budget to update so I was less aware of what I was actually spending. When I checked the account it would say spent- $500 or something and I would think it wasn’t that bad, but then I would notice that there was another $100 charge that hadn’t been processed yet.
It’s bizarre that when you spend money from your bank account the transaction posts almost instantly. Sure is might take a couple days to update fully, but the bank will take the funds out as soon as possible because they don’t benefit if you spend all your money and don’t need an account with them anymore. It’s a completely different set up when you’re working with a credit card.
On top of that it’s very difficult to remember how close to the goal you are. When you pay off part of the balance, it’s easy to forget that it counted toward the reward minimum you had to spend. If you charged and paid off $400 then you only have $600 left. You’re not working toward that neat $1,000 number anymore.
Last off, I’m so surprised how high my credit limit is compared to my salary. If you can get approved for 1 card you can easily get approved for 10. I’ve actually been getting lots of offers in the mail now so I must be on the master credit card mailing list now. If I got approved for $5,000 limit on 10 different cards that’s $50,000 I can spend whenever I want. Just so be clear that’s more than I make in a year. No wonder so many people get themselves into trouble with credit card debt.
I’m still not too concerned about overspending because I know it will get old for me really soon. Even when I was a kid I tended to save money in the bank. By the time I graduated high school I had a couple grand saved up that went toward my semester abroad trip. I’m glad to have the credit card experience because it’s forced me to think more about what I’m spending my funds on. Would I rather blow money on new shoes or save a little bit every month to spend on a trip in a few months? I know I prefer to travel over buying dumb stuff.
I was doing the math on how much it would cost to go on my top 4 travel destinations and I was surprised how little it would cost. I could easily spend the same amount on shoes over a year.
Here’s an example
Flight from NYC = $800-$900 (AirLingus)
Hostel ($20/night)= $140
Food ($30-50/fay)= $210-350
Fun Stuff= $200-300
Taking out the flight if you travel hack= $600-900
That’s really not that much when you think about how much rent costs or a car payment. It makes my dream of traveling around the world a lot more possible.
Top 4 Travel Spots
Paris/Camino de San Tiago= $2395
Machu Picchu= $ 1280
Taking out the flights if you travel hack= $3965
So to comfortably travel for 2 and 1/2 months would be about the same price as living in NYC for a month. That’s so much more possible than I thought! These estimates are actually high because I remember during my semester abroad food in Spain was way cheaper than in the US. You could get a huge meal with drinks for like 7 dollars. In NYC I can barely buy a hot dog for the same price. In Vietnam or Peru I’m sure these costs are even lower. It’s also a lot cheaper to use hostels if you don’t mind sharing a room with other people. Every time I stayed at one before it was always a really good experience. Hostels are full of nice young adventurous people that are excited to meet new people. Usually the hostel sponsors some sort of event at night too so if you’re traveling alone it’s an easy way to make new friends and have a group to go out with.
I’m so excited about this new goal!
I think I would only have to be at my job for a year before they would let me freelance or work from home. I don’t see why they wouldn’t let me. It’s the kind of company that they realize the work is very intense and it’s in their best interest to have as many freelancers as possible. If they have someone that was trained internally it’s a bonus for them.
More updates to follow over the next couple months! I already have enough saved up for 1 trip. Only 3 more to go!
Please follow and like us: