Over the past two years, my family and I have spent more than 50 nights in hotels, visited dozens of states, and spent nearly a month in Europe at little to no out-of-pocket cost. What’s the secret? Award travel!

What is Award Travel?

Award travel is using rewards, mainly from credit card companies, to pay for travel expenses. You’ve probably heard of credit card points and airline miles, but wondered how to accumulate enough of them to make any meaningful travel purchase. The simple answer is credit card sign-up bonuses!

How does it work?

As a reward for signing up for a new credit card, banks will offer sign-up bonuses. These bonuses can range from a small token of appreciation to loyalty points worth thousands of dollars! Most sign-up bonuses require you to spend a certain amount of money on the card in a certain amount of time. For example, in order to earn a whopping 200,000 American Express Membership Rewards points recently, I was required to spend $15,000 within three months of opening the card. These 200,000 Membership Rewards points are enough to get us five round-trip plane tickets to Europe! Beyond the sign-up bonus, most credit cards offer points for making purchases on the card, sometimes with a multiplier. For example, when I use my Chase Ink Cash card at office supply stores, I earn 5x points on those purchases!

But wait…isn’t it bad for your credit to sign up for new cards all of the time?

The answer is both yes and no. When you apply for new credit, an inquiry is placed on your credit report, and your score typically drops a few points for a month or two. Too many inquires sends the message to creditors that you might be out looking for too much credit and thus overextending yourself financially. However, you have keep in mind that award travel is a marathon, not a sprint. Yes, if you go out tomorrow and apply for five new credit cards, your credit score is likey going to suffer. But opening 1-2 new cards every six months or so and using them responsibily will more than likely improve your credit score!

How can I use credit cards responsibly to maximize the points I can earn?

The first rule is never charge more on your credit cards than you can pay off each month. Never pay interest. Any rewards you earn will absolutely be overshadowed by the cost of the interest each month. If you are unable to do this, award travel is not the hobby for you.

If you are able to use credit cards without going into debt, keep reading! The second rule is that everything you can possibly put on a credit card, you do. Bills, groceries, gas, school fees, piano lessons, home repairs…everything! In our household, we’re spending $2k+ a month on normal expenses and earning points on those purchases. When I have a large expense, I often look for a credit card with an otherwise unattainable sign-up bonus to put the expense on. As I mentioned above, I recently earned 200k American Express Membership Rewards for spending $15k in three months. Normally, I would never have been able to put this much spend on a credit card in three months and pay it off without interest, but we needed a new roof and American Express was offering six months with no interest from the date of opening the card. So, my new roof and two months worth of normal expenses earned me enough points to pay for at least $4,000 worth of flights!

Sounds pretty great…where do I start?

Well, there’s no perfect answer, but for most people, starting with the Chase credit card ecosystem is the best bet. Chase’s reward points are called Ultimate Rewards, and these points can be incredibly valuable, mainly due the fact that Ultimate Rewards can be transferred to Hyatt’s loyalty program. Hyatt hotels are some of the nicest hotels out there, and the points required per night can be very low! In order to transfer Ultimate Rewards to another loyalty program (including Hyatt), you’ll need to have either the Chase Sapphire Preferred, Chase Sapphire Reserve, or Chase Ink Business Preferred card. Chase is also a little bit extra in the fact that they will NOT approve you for any of their credit cards if you’ve opened more than five new credit accounts in the past 24 months. This is known as the 5/24 rule, and it’s a good reason to start your award travel journey with Chase.