Travel hacking without manufactured spend

I was having lunch with a travel hacker in my area the other day and we got to talking about different approaches to the game.

My personal approach depends almost entirely on manufactured spend. I think it's fair to say that if every manufactured spend avenue died tomorrow, I'd close all my travel credit cards and put all my regular purchases on a 2% cash back card (or a 2.625% cash back card if I ever had $100,000 in assets). I don't have any reimbursed business travel, either to generate real credit card spend or to take advantage of the benefits of elite status. And I'm poor, so I don't have enough monthly expenses to meet even a "modest" minimum spend requirement of $3,000 or more. Remember, we're imagining a world without any manufactured spend opportunities, including whatever you're thinking of right now.

That's one extreme, but obviously it doesn't apply to most or all of my readers, especially the well-heeled ones! The fact is, travel hacking is and would be possible without any manufactured spend at all. But the benefits would still depend on the discipline you applied to it. With that in mind, here are a few approaches you could take.

Target individual expenses

The most intuitive way to travel hack without manufactured spend is to target individual expenses on upcoming trips. As I often say, at least for economy travel, your hotel expenses can quickly outstrip your flight expenses, so that's a natural place to start. Once you have a destination in mind, it's easy to find the credit card or cards with signup bonuses that will save you the most money on hotel stays — emphasis on you. I truly do not care what a point is "worth" in the abstract; I care what it's worth to you, and what it's worth to you depends on how much money it's going to save you.

If you are planning a trip with stays at Marriott properties, the Marriott Rewards Premier card can earn you 80,000 points after spending $3,000. That's a minimum of 2 nights at all but their top-tier Category 9 properties, and at least 3 nights at Category 5 properties and below. Category 5 properties are an endangered species these days, which is one reason I cancelled my card; the annual free night certificate is only redeemable at Category 1-5 properties. But if you have upcoming Marriott expenses it's easy to calculate the precise value to you of the 80,000-point signup bonus.

Likewise with the current 100,000-point Hilton Honors Surpass American Express signup offer (you can find my personal referral link on my Support the Site! page), and the Chase Hyatt Visa Signature offer of 40,000 points. If you don't have the ability to manufacture spend, then those one-time points hauls can save you a lot of money on trips involving stays at Hilton or Hyatt.

The point is that this exercise doesn't require figuring out how much points are worth in the abstract. Instead, you can ground the value you're getting from a signup bonus directly in your own experience: the amount of money you would otherwise spend on nights you're able to pay for with a credit card's signup bonus.

Targeting airfare is somewhat more difficult, and should be done cautiously. For example, there's a big difference between cards which only allow you to redeem points for the entire cost of a flight (like US Bank Flexpoints) and cards which allow you to redeem points against the partial cost of a flight (like Chase Sapphire and Ink cards, Barclaycard Arrival cards, BankAmericard Travel Rewards, and others).

Likewise, there's a difference between airlines that allow you to pay for your flights with miles (Delta), airlines that offer last-seat availability at much higher rates (Alaska and American), and airlines that offer last-seat availability only to certain customers (United). This difference matters less in a world with manufactured spend, since with plentiful points you are always free to use the right points for the right job. In a world without manufactured spend you have much less room for error in earning and redeeming precisely the points you need. United miles simply won't get you where you need to go, if where you need to go is served only by American.

Build trips around the signup bonuses you're eligible for

A totally different approach to travel hacking without manufactured spend is to build your travel around the signup bonuses you have available to you. It often feels like this is the approach implicitly endorsed by affiliate bloggers who, in promoting a given credit card, explain exactly how and where they think you should use the card's signup bonus.

The advantage of this strategy is that you may be able to reduce your out-of-pocket expenses much more than you would with the strategy of targeting individual expenses, since each part of the trip will be designed around a particular points balance.

The disadvantage is that you have much less control over where you go. While to a travel hacker this may sound like a commonsense trade-off, it's worth pointing out how unusual it would seem to a civilian who plans trips around places they actually want or need to visit.

Even reimbursed business travelers need to think carefully

I often hold up reimbursed business travelers as a sort of platonic ideal of a travel hacker, one who is able to spend her employer's money, accrue elite-qualifying miles with the airline of her choice, and earn top-tier hotel status on someone else's dime.

But that's no excuse for reimbursed business travelers to relax: they still have to make decisions about the cards they use to pay for their reimbursed travel, and to a lesser extent which airline and hotel programs to pursue loyalty with. I say "to a lesser extent" because the various loyalty programs have become extremely adept at making the value proposition of their programs closely track each other. In other words, for actual paid hotel stays and for actual paid flights, the rebate you receive will be similar regardless of the program you select, as long as you direct all your paid business to a single program.

When it comes to credit cards, however, slacking off can be expensive. For example, a reimbursed business traveler who spends $1,000 at a Marriott property could earn 5,000 Marriott Rewards points by paying with a Chase Marriott Rewards Premier card, or 2,000 Starpoints with an American Express Starwood Preferred Guest card — which can be instantly transferred to 6,000 Marriott Rewards points. If you aren't aware of that, you're simply leaving points on the table.

Likewise, a reimbursed business traveler who is able to pay for their own flights still has to decide whether to concentrate or diversify. Should a reimbursed Delta flight be paid for with a Delta American Express card in order to earn as many Delta SkyMiles as quickly as possible, or with another card that bonuses airline purchases in order to diversify their points balances, even if that means lower balances across multiple accounts?

Conclusion

At the end of the day, travel hacking means different things to different people. For some people it means manufacturing spend, for others it means earning points cheaply and redeeming them dearly, and for others it just means occasionally signing up for a new round of credit cards in order to chop off a chunk of the cost of their travel expenses.

The thing I think it can't mean, or rather the thing travel hacking is in contrast to, is applying, spending, and traveling without thinking. So: don't do that.