I’m now two months into the Travel Hacking Experiment. For those that don’t know, travel hacking is the art of signing up for a bunch of credit cards to get the lucrative sign-up bonuses, and then using those rewards to travel for free/cheap. You can read my beginner thoughts on the subject here. My goals when I started looking for cards to sign up for were:
1.) Earn AAdvantage points (or points from any airline in the OneWorld alliance).
2.) Earn Hilton HHonors points.
You might recall, from Travel Hacking: Part I, that I applied for five new credit cards back in March, and was approved for four of them (turns out Citibank doesn’t like to issue multiple new cards at the same time). Here’s a recap of the cards, the sign-up bonuses, and the minimum spending requirements to get the bonuses:
- Citi AAdvantage Visa – Sign up bonus of 50,000 AAdvantage points after spending $3000 in the first 3 months.
- American Express HHonors Card – Sign up bonus of 50,000 HHonors points after spending $750 in the first 3 months.
- US Airways Premier World Mastercard – Sign up bonus of 50,000 Dividend Miles after your first purchase and paying the $89 yearly fee.
- British Airways Visa – Sign up bonus of 50,000 Avios points after spending $2000 in the first 3 months.
Typically Mrs. Dragon and I don’t spend $5750 in non-mortgage expenses in three months. So the plan was to use manufactured spending to hit those spending levels. However, it turns out that the timing of this experiment couldn’t have been better. Since we bought our house our spending level has been higher than normal, which has made meeting the minimum spending requirements a lot easier.
As of this writing, I’ve hit the requirements for the bonuses on the first three cards, leaving only the British Airways Visa to go, all without doing any manufactured spending. The 50,000 HHonors points and the 50,000 Dividend Miles have already posted to my accounts. Not only that, but because of the American Airlines/US Airways merger this quarter, those Dividend Miles are already converted to AAdvantage miles. Sweet!
Of course, the higher spend rate is not great, and our expense reports have been too high for my liking recently. But we’ve been trying to limit our spending to things that we think will reduce future spending (like buying a lawnmower and some tools) and things that immediately make our lives better (fresh paint on the walls was a must for us).
That’s all fine and good for me personally, but it’s sort of a let-down from a blogging point of view. A big reason for this experiment was to try out manufactured spending to see how much of a hassle it was.
I have a business trip coming up in a week or two and that will help drive up the spend rate for the last card, which will make meeting the requirements even easier. Don’t worry though, the expenses will all be reimbursed, so they won’t show up on the next expense report :).
However, even if I can meet the minimum spend without it I’m going to try out at least one method of manufactured spending, which I’ll talk about in the final update of this experiment, so stay tuned.
Now on to the credit score. The data here is fuzzy at best because I also got a brand new mortgage just before applying for all these cards, and I have no way to distinguish between the effect of the mortgage vs the effect of the credit cards.
As stated in Part I, my FICO score before the mortgage and new cards was 796. Before my round of credit card applications I could only assume that my credit score would be negatively affected by all the new hard inquiries and having “younger” accounts. However, having more accounts open positively affects your score, as does having more credit in terms of total dollar amount.
As of this writing, my FICO score is 770. I’ve been checking in on it occasionally, and it’s been as low as 768 and as high as 778 since the experiment started. My takeaway from this is that, if you already have decent credit, new credit inquiries don’t have as large an effect as I thought.
We’ll just have to wait and see what happens once I start closing these newly opened accounts. I get the feeling that maybe that will drag the score down a little bit. Then again, what the hell do I know about the black magic that is the credit score? Don’t get me wrong, I know all the publicly available knowledge, but it’s still a mystery.
To recap, the experiment has been a wild success for me personally, but a little underwhelming as a blogger. Hopefully in the next couple of weeks I’ll actually get around to trying out manufactured spending. I’ll be sure to let you know if I do.
Are you surprised at how little my credit score changed? Have you ever tried travel hacking? Got any tips for a beginner?
Other posts in this series: