Over the last three years travel hacking has been an obsession of mine. You would think I would write more about it, right? Well, in this post I’d like to show you how to score inexpensive hotel rooms via travel hacking. What is travel hacking? In short, it’s the process of using credit card sign-up bonuses to reap maximum travel benefits from airline and hotel loyalty programs. We began travel hacking in April of 2014, and since that time, we have amassed over 3 million airline miles and hotel points. If valued at 1¢ per point, 3 million points represents a value of $30,000. (If you would like to learn how to travel hack for free, click here.)
Thus far, one of our favorite travel hacks has been with the Club Carlson Hotel Rewards Program. There are a number of hotel chains within this rewards program, but most of our room redemptions have been at Country Inn & Suites. We like them because their rooms are clean and comfortable, they provide a hot buffet breakfast with palatable coffee, and we actually NEED rooms when we travel to various parts of Georgia and Florida. Over the last three years we have stayed at a number of Club Carlson Hotels, and we have enjoyed all of our stays. In order to maximize our points with Club Carlson, we utilize two U.S. Bank credit cards:
Most travel hacks end with the cardholder canceling the card right before the annual fee comes due. However, this travel hack is unusual in that we do not cancel these cards and we actually pay the annual fee. The first year with the card is the most lucrative, but subsequent years will also provide you with plenty of discounted rooms. Let’s take a look:
Both cards reward 50,000 points for the first purchase with the card, and each card rewards 35,000 additional points after spending $2,500. Each card also rewards one free hotel stay a year after charging $10,000 and then renewing the card. For this travel hack, I recommend spending $10,000 on each card using a manufactured spending technique (see below #1). A $10k spend will insure that you earn the free hotel stay AND you will earn 50,000 additional hotel points since both cards reward 5 hotel points per dollar charged. ($10,000 * 5 = 50,000 Club Carlson hotel points)
By spending $10k on each card, the card holder can generate 270,000 total hotel points: 170,000 from the sign-up bonuses and 100,000 from the $20k of manufactured spending (2 cards * $10k). Of course, there are a few fees involved. First, there are annual fees of $135 to carry both cards. Second, the $20k of manufactured spending results in fees of $225.60. That was my cost for $20k of spending; your costs may vary (see below #2.) Here’s one of my helpful tables to speed you on your path to travel hacking enlightenment:
Okay, now we know how to earn 270,000 hotel points at a cost of $360.60, but what exactly does that mean? Nothing until you understand the Club Carlson redemption rate. There are seven redemption categories with the lowest one at 9,000 points per room and the highest one at 70,000 points per room. Obviously, I’m too frugal to waste my points on the higher-end redemptions. Instead, we find the 9k and 15k redemptions to be very reasonable. In a pinch, we might even consider a 28k point redemption. Here is a look at what 270,000 hotel points would represent:
Depending on the room rate, a Club Carlson room would cost you: $11, $18, or $31 using this hacking strategy. There’s your $11 room as promised in the title of this post…you’re welcome!
YEAR 2 & BEYOND
While in year two you won’t get the initial sign-up bonuses, you can still make these cards do major work for you. Each card rewards 40,000 hotel points when you pay the annual renewal fee. If you renew both cards, you would have 80,000 Club Carlson points. If you decide to spend $10,000 on each card to lock in the bonus rooms, here is what you could earn every year with the cards:
Once again, let’s take a look at the room redemption chart:
Not quite the deal as in the first year, but not bad either. In year 2 and beyond, a Club Carlson room would cost you: $16, $26, or $43 using this hacking strategy. In my mind, these rates are still good because they include a real breakfast. It would cost our family of three at least $10 to have breakfast at a fast food joint, so I subconsciously discount the rates above by $10. Maybe I’m lying to myself, but a $26 room with breakfast for three is a bargain to me.
Our Sweet Spot Redemptions
To me the key to travel hacking is to acquire points that you will actually use. In our case, we have a few redemptions that we enjoy. Here they are:
- Brunswick, GA * We regularly stay here for only 15k points during our beach trips to Jekyll Island and St. Simons Island. It has an indoor pool and is located near a great buffet.
- Jacksonville, FL * This hotel recently changed from a Radisson Inn to a Country Inn & Suites. It’s a good option to access some Florida beaches for only 15k points. There are also two other 15k point hotels in the Jacksonville area.
- Atlanta, GA * This location is convenient for anyone flying out of the Atlanta airport. Be aware that the surrounding area is a little sketchy, but the hotel itself is fine. This room can be yours for only 9k points!
- Columbus, GA * We used this hotel when we went to a wedding in the area. We got the rooms for only 15k points.
In 2016 my wife and I went a little crazy with our Club Carlson Visa cards. First, we decided to spend $10,000 on each of our cards; we have four of these cards in total. This helped us to generate 200,000 points and to earn four bonus nights at a total cost of $721.20 ($360.60 *2, see #2 below). At our most frequent redemption rate, we should be able to get at least 28 nights from our 2016 spending. (I don’t plan on doing this every year because it certainly wasn’t free.) We plan on using our four bonus nights at a higher-end hotel that we would normally consider too expensive. For example, we might use our bonus nights to visit St. Augustine, a destination that usually requires 38k point per night.
Well, what do you think? Did I just waste $721 bucks, or am I stealing Country Inn & Suites blind? If you have better travel hacks, please share them with us.
#1 What Is Manufactured Spending?
Manufactured spending is the travel hacker equivalent of selling your body for money…it feels dirty even after doing it for years. There are many ways to manufacture spending, but mine is pretty simple:
#1: Buy $500 Visa Vanilla gift card at pharmacy with credit card –>
#2: Buy $500 money order at grocery store with Visa Vanilla gift card –>
#3: Fill out money order and deposit it to online travel hacking checking account –>
#4: Use bill pay feature in travel hacking checking account to pay credit card bill.
You may have noticed that I didn’t specify which pharmacy or grocery store I frequent to manufacture my spends. First, I don’t want to shine too much light on the businesses that allow me to “work my magic.” After all I’ve got points to accrue, so I can’t ruin my “sure thing.” Second, wherever you live you are certain to have different stores with varying requirements. You’ll just have to visit a few pharmacies and grocery stores and craft your own manufactured spending plan. I’m certain that you’ll figure something out. As soon as you do, work it!
Before you go wild with your manufactured spending, keep two thoughts in minds. First, according to the travel hacking pros, you should never work a spend through your regular checking account. Why? Because any irregularities in your checking account, real or perceived, could lead to the freezing or closing of the account. You wouldn’t want to be locked out of your normal checking account, right? Second, you shouldn’t do too much manufactured spending because it might be interpreted as “structuring” by the IRS. We’re travel hackers here, not money launderers.
#2 How Much Does Manufactured Spending Cost?
My manufactured spending technique requires two costs. First, I have to pay $4.95 to purchase a Visa Vanilla gift card. Second, I have to spend 69¢ to buy a money order. That results in a total cost of $5.64 per $504.95 spent (cost of gift card is included in the spend). To hit a credit card spending requirement of $2,500 I would buy five gift cards over the course of a few days. My total cost to manufacture the spend would be: 5 * 5.64 = $28.20. A manufactured spend of $10,000 would cost: 20 * $5.64 = $112.80
|Health Savings Account: We use Elements Financial to access commission-free, low-cost Vanguard ETFs at TD Ameritrade.